As filed with the Securities and Exchange Commission on August 13, 2001
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
VERIZON VERIZON
GLOBAL FUNDING CORP. COMMUNICATIONS INC.
(Exact Name of Registrants as Specified in Their Charters)
Delaware Delaware
(State or other jurisdiction of incorporation or (State or other jurisdiction of incorporation or
organization) organization)
51-0272912 23-2259884
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
3900 Washington Street, 2nd Floor 1095 Avenue of the Americas
Wilmington, Delaware 19802 New York, New York 10036
(302) 761-4200 (212) 395-2121
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(Address, including zip code, and telephone number, including area code, of
Registrants' principal executive offices)
Please address a copy of all communications to:
Janet M. Garrity David S. Kauffman
President and Treasurer Vice President and Associate General Counsel
VERIZON GLOBAL FUNDING CORP. VERIZON COMMUNICATIONS INC.
3900 Washington Street, 2nd Floor 1095 Avenue of the Americas
Wilmington, Delaware 19802 New York, New York 10036
(302) 761-4200 (212) 395-6174
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(Name, address, including zip code, and telephone number, including area code,
of agent for service of process)
CALCULATION OF REGISTRATION FEE
Proposed Maximum Proposed Maximum Amount of
Title of each Class of Amount to be Offering Price per Aggregate Offering Registration
Securities to be Registered Registered (1) Unit (2) Price (2) Fee
-------------------------------------------------------------------------------------------------
Zero-Coupon Convertible Notes
due 2021...................... $5,442,079,000 54.00% $2,938,722,660 $734,680.67
Support Agreement between
Verizon Communications Inc.
and Verizon Global
Funding Corp................. N/A (3) (3) (4)
Share Contribution Agreement
between Verizon Communication
Inc. and Verizon Global
Funding Corp.................. N/A (3) (3) (4)
Common Stock, par value $0.10
per share..................... (5) -- -- (5)
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(1) The notes were issued at an original price of $551.26 per $1,000 principal
amount at maturity, which represents an aggregate initial issue price of
$3,000,000,000 and an aggregate principal amount at maturity of
$5,442,079,000.
(2) Determined pursuant to Rule 457(c) under the Securities Act of 1933, solely
for the purpose of calculating the registration fee. The above calculation
is based on the average of the bid and ask prices for the notes in secondary
market transactions executed by one of the initial purchasers of the notes
on August 9, 2001, as reported to the Registrants by an initial purchaser.
(3) No separate consideration will be received for the Support Agreement or the
Share Contribution Agreement.
(4) Pursuant to Rule 457(n) under the Securities Act of 1933, no registration
fee is payable with respect to the Support Agreement or the Share
Contribution Agreement.
(5) Includes such indeterminate number of the common stock of Verizon
Communications as shall be issuable upon conversion and/or purchase by the
Registrants of the notes registered hereby, which is not subject to an
additional registration fee pursuant to Rule 457(i).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
Approximate Date of Commencement of Proposed Sale to the Public: From time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_]
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the effective registration statement for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [_]
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. The + +selling securityholders may not sell these securities until the registration + +statement filed with the Securities and Exchange Commission is effective. + +This prospectus is not an offer to sell these securities and it is not + +soliciting an offer to buy these securities in any state where the offer or + +sale is not permitted. + |
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Subject to Completion, dated August 13, 2001
PROSPECTUS
$5,442,079,000
[LOGO OF VERIZON]
Verizon Global Funding Corp.
Zero-Coupon Convertible Notes due 2021
Supported as to Payment of Principal and Interest by and Convertible into the Common Stock of Verizon Communications Inc.
We issued $5,442,079,000 aggregate principal amount at maturity of our Zero- Coupon Convertible Notes due 2021, referred to as the "notes", in a private transaction in May 2001 to persons reasonably believed to be "qualified institutional buyers" as defined in Rule 144A under the Securities Act of 1933, referred to as the Securities Act. The notes are our senior unsecured obligations and are supported as to payment of principal and interest by, and convertible into the common stock of, Verizon Communications Inc. This prospectus may be used by selling securityholders to resell their notes and the common stock of Verizon Communications issuable upon conversion or repurchase by us of their notes. Unless otherwise specified in this prospectus, the terms "we," "us", and "our" refer to Verizon Global Funding.
The issue price of the notes represents an initial accretion rate of 3% per annum, subject to an upward adjustment as described in this prospectus. See "Description of Notes and Support Obligations--Interest Adjustment" for a description of this adjustment. We will not pay cash interest on the notes prior to maturity unless an upward adjustment occurs or we elect to do so following a tax event. See "Description of Notes and Support Obligations--Tax Event" for the definition of the term "tax event".
You may convert each of your notes into 7.9318 shares of the common stock of Verizon Communications under the circumstances described in this prospectus. This conversion rate is equivalent to an initial conversion price of $69.50 per share of the common stock of Verizon Communications based on the issue price of the notes. The conversion rate may be adjusted as described in this prospectus. See "Description of Notes and Support Obligations--Conversion Rights" for a description of your conversion rights. The common stock of Verizon Communications is listed on the New York Stock Exchange under the symbol "VZ".
On or after May 15, 2006, we may redeem for cash all or part of the notes at a redemption price equal to the accreted principal amount plus any accrued and unpaid cash interest. On May 15, 2004, May 15, 2006, May 15, 2011 and May 15, 2016, you may require us to repurchase your notes. The repurchase prices are set forth in this prospectus, but will be higher if an increased accretion rate applies for one or more semi-annual periods. We may choose to pay the repurchase price in cash, the common stock of Verizon Communications or a combination of both. See "Description of Notes and Support Obligations-- Repurchase Right" for a description of your repurchase rights. Also, upon a change in control, you may require us to repurchase all or a portion of your notes in cash at a repurchase price equal to the accreted principal amount plus any accrued and unpaid cash interest. See "Description of Notes and Support Obligations--Change in Control" for the definition of the term "change in control".
Beginning on May 15, 2004, in some circumstances where the closing sales price of the common stock of Verizon Communications is equal to or less than 60% of the accreted conversion price of the notes for specified periods, the accretion rate on the notes for a semi-annual period may be subject to an increased accretion rate equal to the applicable per annum reset rate in effect at that time. See "Description of Notes and Support Obligations--Interest Adjustment" for a description of these circumstances and for the definition of the term "reset rate" and see "Summary--The Offering--Conversion Rights" for the definition of the term "accreted conversion price". If an increased accretion rate is in effect for a particular semi-annual period, we will pay a portion of the increased accretion rate as cash interest and the remaining increased accretion rate will be accrued and payable at maturity, redemption or repurchase.
This investment involves risks. See "Risk Factors" beginning on page 7.
Neither we nor Verizon Communications will receive any of the proceeds from the sale of the notes or the common stock of Verizon Communications by any of the selling securityholders. The notes and the common stock of Verizon Communications may be offered in negotiated transactions or otherwise, at market prices prevailing at the time of sale or at negotiated prices. In addition, the common stock of Verizon Communications may be offered from time to time through ordinary brokerage transactions on the New York Stock Exchange. See "Plan of Distribution". The selling securityholders may be considered to be "underwriters" as defined in the Securities Act. Any profits realized by the selling securityholders may be considered to be underwriting commissions. If the selling securityholders use any broker-dealers, any commissions paid to broker- dealers and, if broker-dealers purchase any notes or the common stock of Verizon Communications as principals, any profits received by the broker-dealers on the resale of the notes or the common stock of Verizon Communications, may be considered to be underwriting discounts or commissions under the Securities Act.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE NOTES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is , 2001.
[Inside Front Cover]
YOU SHOULD RELY ONLY ON THE INFORMATION PROVIDED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS. NEITHER WE NOR VERIZON COMMUNICATIONS HAS AUTHORIZED ANYONE ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THIS PROSPECTUS. THE DELIVERY OF THIS PROSPECTUS SHALL NOT UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THE INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT AS OF ANY SUBSEQUENT DATE.
TABLE OF CONTENTS
Page
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Where You Can Find More Information........................................ ii
Special Note Regarding Forward-Looking Statements.......................... iii
Summary.................................................................... 1
Verizon Communications Inc. ............................................. 1
Verizon Global Funding Corp. ............................................ 2
The Offering............................................................. 3
Risk Factors............................................................... 7
Ratios of Earnings to Fixed Charges........................................ 8
Use of Proceeds............................................................ 8
Description of Notes and Support Obligations............................... 9
Description of Verizon Communications Common Stock......................... 28
Certain United States Federal Income Tax Consequences...................... 29
Selling Securityholders.................................................... 34
Plan of Distribution....................................................... 36
Legal Matters.............................................................. 38
Experts.................................................................... 38
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WHERE YOU CAN FIND MORE INFORMATION
Verizon Communications files annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission. You may read and copy any of these documents at the Securities and Exchange Commission's public reference room in Washington, D.C. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information. Verizon Communications' Securities and Exchange Commission filings are also available to the public on the Securities and Exchange Commission's web site at http://www.sec.gov.
In this prospectus, we and Verizon Communications "incorporate by reference" some information Verizon Communications files or has filed with the Securities and Exchange Commission, which means that we and Verizon Communications disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and later information that Verizon Communications files with the Securities and Exchange Commission will automatically update and supersede this information. We and Verizon Communications incorporate by reference the documents listed below and any future filings made by Verizon Communications with the Securities and Exchange Commission under Section 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") until all of the notes have been sold:
. Verizon Communications' Annual Report on Form 10-K for the year ended December 31, 2000;
. Verizon Communications' Quarterly Report on Form 10-Q for the quarter ended March 31, 2001; and
. Verizon Communications' Current Reports on Form 8-K dated March 28, 2001, April 25, 2001, May 9, 2001, June 5, 2001, July 31, 2001 and August 2, 2001.
You may request a copy of these filings, at no cost, by writing or telephoning Verizon Communications at the following address or phone number:
Investor Relations Verizon Communications Inc. 1095 Avenue of the Americas, 36th Floor New York, New York 10036 Telephone: (212) 395-1525
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
In this prospectus and in the information incorporated in this prospectus by reference, we and Verizon Communications have made forward-looking statements. These statements are based on our and Verizon Communications' estimates and assumptions and are subject to risks and uncertainties. Forward-looking statements include the information concerning Verizon Communications' 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 and Verizon Communications 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 in the information incorporated by reference, could affect future results and could cause those results to differ materially from those expressed in the forward- looking statements:
. materially adverse changes in economic conditions in the markets served by Verizon Communications or by companies in which Verizon Communications has substantial investments;
. material changes in available technology;
. an adverse change in the ratings afforded Verizon Communications' debt securities by nationally accredited ratings organizations;
. the final outcome of federal, state and local regulatory initiatives and proceedings, including arbitration proceedings, and judicial review of those initiatives and proceedings, pertaining to, among other matters, the terms of interconnection, access charges, universal service, and unbundled network element and resale rates;
. the extent, timing, success and overall effects of competition from others in the local telephone and toll service markets;
. the timing and profitability of our entry into the in-region long- distance market;
. Verizon Communications' ability to combine former Bell Atlantic and GTE operations, satisfy regulatory conditions and obtain revenue enhancements and cost savings;
. the profitability of Verizon Communications' entry into the nationwide broadband access market;
. the ability of Verizon Wireless to combine operations, achieve revenue enhancements and cost savings, and obtain sufficient spectrum resources;
. Verizon Communications' ability to convert its ownership interest in Genuity Inc. into a controlling interest consistent with regulatory conditions, and Genuity's ensuing profitability; and
. changes in Verizon Communications' accounting assumptions that may be required by regulatory agencies, including the Securities and Exchange Commission, or that result from changes in the accounting rules or their application, which could result in an impact on earnings.
SUMMARY
The following summary contains basic information about us, our parent, Verizon Communications, and the offering. It may not contain all the information that is important to you in making an investment decision and the information contained in this summary is qualified in its entirety by the more detailed information appearing elsewhere in this prospectus or incorporated by reference in this prospectus. The "Description of Notes and Support Obligations", "Description of Verizon Communications Common Stock", "Certain United States Federal Income Tax Consequences", "Selling Securityholders" and "Plan of Distribution" sections of this prospectus contain more detailed information regarding the terms and conditions of the offering, the notes and the common stock of Verizon Communications. You should consider carefully the information set forth in this prospectus under the heading "Risk Factors".
VERIZON COMMUNICATIONS INC.
Verizon Communications is one of the world's leading providers of communications services. Verizon Communications was formerly known as Bell Atlantic Corporation. We began doing business as Verizon Communications on June 30, 2000, when Bell Atlantic merged with GTE Corporation in a transaction accounted for as a pooling-of-interests. Each of Bell Atlantic and GTE was a leader in the telecommunications and information industries. We are a Fortune 10 company with about 260,000 employees and approximately $65 billion of annual revenues. In this section of the prospectus, references to "we", "us" and "our" refer to Verizon Communications and its consolidated subsidiaries.
Our subsidiaries are, collectively, the largest providers of wireline and wireless communications in the United States, with 125 million access line equivalents and approximately 28 million wireless customers. Our global presence extends to more than 40 countries in the Americas, Europe, Asia and the Pacific.
We provide domestic telecommunications wireline services through our subsidiaries in 31 states and the District of Columbia. These services consist principally of advanced wireline voice and data services, including voice and data transport, enhanced and custom calling features, network access, directory assistance, private lines and public telephones. We also provide customer premises equipment distribution, data solutions and systems integration, billing and collections and Internet access services. We currently own more than 62 million access lines in the United States and serve over 33 million households. We also have approximately 6 million long distance customers nationwide. Verizon Online, our Internet service provider, has over 1 million subscribers, and we have approximately 840,000 Digital Subscriber Line customers.
We provide domestic wireless communications services through our 55%-owned subsidiary, Verizon Wireless. Verizon Wireless is the leading wireless communications provider in the United States in terms of the number of subscribers and network coverage. Verizon Wireless has the largest customer base of any U.S. wireless provider, with approximately 28 million wireless subscribers, and offers wireless voice and data services across the most extensive wireless network in the United States. Approximately 90% of the United States population reside in areas in which Verizon Wireless has Federal Communications Commission licenses to offer wireless services. Verizon Wireless provides digital coverage in almost every major U.S. city. Its broad network coverage, digital technology, widespread distribution channels and operating and financial strength position it to take advantage of the growing demand for wireless voice and data services.
We also hold a substantial investment portfolio in wireline and wireless partnerships and joint ventures in the Americas (including Puerto Rico), Europe, Asia and the Pacific. These investments represent a mix of mature and start-up businesses where in conjunction with local partners and management, we seek to capitalize on our core competencies and to enhance shareholder returns.
We are the world's largest publisher of telephone directories. Our directory publishing and electronic commerce operations consist of domestic and international publishing businesses, including print directories and Internet- based shopping guides, as well as website creation and other electronic commerce services. We have publishing and electronic commerce operations in the United States, Europe, Asia and Latin America and produce about nearly 150 million telephone directories annually.
Our principal executive offices are located at 1095 Avenue of the Americas, New York, New York 10036, and our telephone number is (212) 395-2121.
VERIZON GLOBAL FUNDING CORP.
Verizon Global Funding was established to provide financing to Verizon Communications and some of its subsidiaries, other than Verizon Communications' domestic telephone company subsidiaries. Verizon Global Funding does not engage in any separate business activities.
Verizon Global Funding is a wholly owned, indirect subsidiary of Verizon
Communications and was incorporated in Delaware in November 1983. The principal
executive offices of Verizon Global Funding are located at 3900 Washington
Street, 2nd floor, Wilmington, Delaware 19802, and its telephone number is
(302) 761-4200.
THE OFFERING
Notes....................... $5,442,079,000 aggregate principal amount at
maturity of Zero-Coupon Convertible Notes due
2021, subject to an upward adjustment in the
event there is an increased accretion rate.
Original Issue Price........ We issued each note at a price of $551.26 per
note and with a principal amount at maturity of
$1,000, subject to an upward adjustment in the
event there is an increased accretion rate.
Maturity.................... May 15, 2021.
Ranking..................... The notes are our senior unsecured obligations
and rank equally with all of our other unsecured
and unsubordinated debt. Except as described in
this prospectus, Verizon Communications' support
obligations rank equally with all of its other
unsecured and unsubordinated debt.
Accretion Rate.............. 3% annually, computed on a semi-annual bond
equivalent basis, subject to an upward adjustment
in the event there is an increased accretion
rate.
Cash Interest Payment....... We will not pay cash interest on the notes unless
an increased accretion rate is in effect or we
elect to do so following a tax event. If an
increased accretion rate is in effect for a semi-
annual period, we will pay a portion of the
increased accretion rate as cash interest at a
rate of 0.25% per annum, or 0.125% for each semi-
annual period, on the applicable principal amount
and the remaining portion of the increased
accretion rate will be accrued and payable at
maturity, redemption or repurchase. The
"applicable principal amount" means, for any semi-
annual period, the amount at the beginning of the
semi-annual period equal to the initial issue
price of the notes adjusted to reflect the
accretion of the notes at the applicable accretion
rate or rates. If we elect to pay cash interest
upon the occurrence of a tax event, the amount of
cash interest payable for each semi-annual period
will be determined based on the initial accretion
rate or the increased accretion rate, whichever is
in effect. Cash interest, if any, will be paid
semi-annually in arrears on each May 15 or
November 15 to the holders of record of the notes
as of the preceding May 1 or November 1.
Conversion Rights........... At your option, you may convert your notes into
the common stock of Verizon Communications at a
conversion rate of 7.9318 shares per note,
subject to adjustment in some events, under any
of the following circumstances:
. during any quarterly conversion period, if the
closing sales price of the common stock of
Verizon Communications for at least 20 trading
days in the 30 consecutive trading days ending
on the first day of the quarterly conversion
period is more than the applicable percentage
(the "applicable percentage" is initially 120%
and will decline by 0.25% at the end of each
semi-annual period over the life of the notes
to 110%) of the accreted conversion price, as
defined below, on the first day of that
quarterly conversion period; or
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. during the five business day period following
the ten business days after any nine
consecutive trading day period in which the
trading price for a note for each day of that
period, as determined by the trustee, was less
than 95% of the product of the closing sales
price of the common stock of Verizon
Communications multiplied by the number of
shares into which that note is convertible for
that period. However, if at conversion the
closing price of the common stock of Verizon
Communications is greater than 100% but equal
to or less than the applicable percentage of
the accreted conversion price, then you will
receive, instead of the common stock of
Verizon Communications based on the applicable
conversion rate, cash or the common stock of
Verizon Communications, or a combination of
both, at our option, with a value equal to the
accreted principal amount of the notes; or
. if the notes have been called for redemption;
or
. upon the occurrence of specified corporate
transactions described under "Description of
Notes and Support Obligations--Conversion
Rights".
The "accreted conversion price" as of any day
equals the accreted principal amount of a note
divided by the number of shares of the common
stock of Verizon Communications issuable upon
conversion of the note on that day.
Redemption of the Notes at On or after May 15, 2006, we may redeem for cash
Our Option................. all or part of the notes at any time, upon not
less than 30 nor more than 60 days notice by mail
to holders of notes, for a price equal to the
accreted principal amount plus any accrued and
unpaid cash interest to the redemption date.
Repurchase of Notes at Your You have the right to require us to repurchase
Option..................... your notes on May 15, 2004, May 15, 2006, May 15,
2011 and May 15, 2016. In each case, we will pay
a repurchase price equal to the accreted
principal amount plus any accrued and unpaid cash
interest to the repurchase date. We may choose to
pay the repurchase price in cash or the common
stock of Verizon Communications, or a combination
of both. If we elect to pay the repurchase price
in the common stock of Verizon Communications or
a combination of cash and the common stock of
Verizon Communications, we must notify holders of
notes not less than 20 business days prior to the
repurchase date. The common stock of Verizon
Communications will be valued at the average of
the closing sales price for five trading days
ending on the third trading day prior to the
repurchase date. We have the right to pay the
repurchase price of the notes at any time during
the five business days following the repurchase
date.
Change in Control........... If Verizon Communications undergoes a change in
control, you will have the option to require us
to repurchase your notes for cash. In the event
of a change in control, we will pay a repurchase
price equal to the accreted principal amount plus
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any accrued and unpaid cash interest to the
repurchase date.
Interest Adjustment......... Beginning on May 15, 2004, if the closing sales
price of the common stock of Verizon
Communications is equal to or less than 60% of
the accreted conversion price of the notes for
any 20 trading days out of the last 30
consecutive trading days ending three business
days prior to any May 15 or November 15, then the
accretion rate on the notes for the semi-annual
period commencing on that date will be subject to
an increased accretion rate equal to the
applicable per annum reset rate in effect at that
time. See "Description of Notes and Support
Obligations" for the definition of the term
"closing sales price". Any increased accretion
rate made pursuant to this provision will remain
in effect until the next succeeding May 15 or
November 15 when the closing sales price of the
common stock of Verizon Communications is not
equal to or less than 60% of the accreted
conversion price of the notes for any 20 trading
days out of the last 30 consecutive trading days
ending three business days prior to that date, at
which time the accretion rate will revert to 3%.
If the closing sales price of the common stock of
Verizon Communications is equal to or less than
60% of the accreted conversion price of the notes
for any 20 out of the last 30 trading days ending
three business days prior to any May 15 or
November 15 after the accretion rate has reverted
to 3%, then the accretion rate on the notes will
again be subject to an increased accretion rate
equivalent to the reset rate in effect from time
to time. The reset rate will be established by the
reset rate agent as of each reset rate
determination date. See "Description of Notes and
Support Obligations--Interest Adjustment" for the
definitions of the terms "reset rate agent" and
"reset rate determination date".
Tax Event................... We can elect to pay cash interest on the notes
upon the occurrence of a tax event from and after
the date a tax event occurs instead of accreting
the principal amount of the notes, including any
cash interest payable pursuant to an increased
accretion rate. If that happens, the principal
amount on which we pay interest will be restated
and will be equal to the accreted principal
amount on the date of restatement. See
"Description of Notes and Support Obligations--
Tax Event".
Events of Default........... If there is an event of default, the notes may be
declared immediately due and payable in an amount
equal to the accreted principal amount of the
notes plus any accrued and unpaid cash interest
up to the payment date. These amounts
automatically become due and payable in some
circumstances.
The following are events of default for the notes:
. our failure for 90 days to pay when due any
cash interest on the notes in the event there
is an increased accretion rate in effect or
after we elect to pay cash interest on the
notes following a tax event;
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. our failure to pay principal on the notes, or
after we elect to pay cash interest on the
notes following a tax event, the restated
principal amount, when due, whether at
maturity, by declaration, when called for
redemption, when required to be purchased by
you or otherwise;
. our failure to perform, or breach of, any
covenant or warranty in the notes or in the
indenture and applicable to the notes for 90
days after notice to us and Verizon
Communications by the trustee or by holders of
at least 25% in principal amount of the
outstanding notes; and
. some events involving bankruptcy, insolvency
or reorganization of Verizon Communications or
us.
Tax......................... You agree, for U.S. federal income tax purposes,
to treat your notes as "contingent payment debt
instruments" and to be bound by our application
of the Treasury Regulations that govern
contingent payment debt instruments, including
our determination that the rate at which interest
will be considered to accrue for federal income
tax purposes will be 7.51%, compounded semi-
annually, which is the rate comparable to the rate
at which we would borrow on a noncontingent,
nonconvertible borrowing with terms and conditions
otherwise comparable to the notes, including the
rank, term, and general market conditions.
Accordingly, you will be required to accrue
interest on a constant yield to maturity basis at
that rate, with the result that you will recognize
taxable income significantly in excess of any cash
received while the notes are outstanding. In
addition, you will recognize ordinary income upon
a conversion of a note into the common stock of
Verizon Communications equal to the excess, if
any, between the value of the common stock of
Verizon Communications received on the conversion
and your adjusted tax basis in the note. See
"Certain United States Federal Income Tax
Consequences -- U.S. Holders of Notes-- Sale,
Exchange, Conversion or Redemption".
YOU ARE URGED TO CONSULT YOUR TAX ADVISOR
REGARDING THE TAX TREATMENT OF THE NOTES AND
WHETHER A PURCHASE OF THE NOTES IS ADVISABLE IN
LIGHT OF THE AGREED UPON TAX TREATMENT AND YOUR
PARTICULAR TAX SITUATION.
Book-Entry Form............. The notes will be issued only in book-entry form
and will be represented by permanent global
certificates deposited with a custodian for and
registered in the name of a nominee of The
Depository Trust Company, commonly known as DTC,
in New York, New York. Beneficial interests in
any of the securities will be shown on, and
transfers will be effected only through, records
maintained by DTC and its direct and indirect
participants and any beneficial interest may not
be exchanged for certificated securities, except
in limited circumstances. See "Description of
Notes and Support Obligations--Book-Entry System".
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RISK FACTORS
You should carefully consider the following factors and other information in this prospectus before deciding to purchase any notes.
We may not have the ability to raise the funds necessary to repurchase the notes following a change in control or at your option.
On May 15, 2004, May 15, 2006, May 15, 2011 and May 15, 2016, and upon the occurrence of a change in control of Verizon Communications, you may require us to repurchase your notes. However, it is possible that we would not have sufficient funds available in the time period specified. See "Description of Notes and Support Obligations--Repurchase Right" and "--Change in Control".
The amount you must include in your income for United States federal income tax purposes will exceed the amount of cash interest you receive.
You have agreed with us to treat your notes as contingent payment debt instruments. As a result, despite some uncertainty as to the proper application of the applicable Treasury Regulations, you will be required to include in your gross income each year amounts of interest in excess of the cash yield to maturity of the notes. You will recognize gain or loss on the sale of a note, repurchase by us of a note at our option, conversion of a note or redemption of a note in an amount equal to the difference between the amount realized on the sale, repurchase by us at your option, conversion or redemption, including the fair market value of any common stock of Verizon Communications received upon conversion or otherwise and your adjusted tax basis in the note. Any gain recognized by you on the sale, repurchase by us at our option, conversion or redemption of a note generally will be ordinary interest income; any loss will be ordinary loss to the extent of the interest previously included in income and, thereafter, capital loss. See "Certain United States Federal Income Tax Considerations".
RATIOS OF EARNINGS TO FIXED CHARGES
The following table shows Verizon Communications' ratio of earnings to fixed charges for the periods indicated:
Years Ended
Six Months December 31
Ended June 30 -------------------------------------------------------------
2001 2000 1999 1998 1997
------------- ---- ----- ----- ----
3.49 4.47 4.98 3.81 3.74
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For all periods, the ratios reflect the merger of Bell Atlantic and GTE as if it occurred as of the beginning of the earliest period presented, in accordance with pooling-of-interests accounting rules.
For these ratios, "earnings" have been calculated by adding fixed charges to income before income taxes and extraordinary charges, and "fixed charges" include interest expense, preferred stock dividend requirements, capitalized interest and the portion of rent expense representing interest.
The ratio for the six months ended June 30, 2001 includes special items that resulted in a net pretax loss of $(4,503) million, and the ratios for the years ended December 31, 2000, 1999, 1998 and 1997 include net pretax gains (losses) of $6,116 million, $981 million, $(2,552) million and $(1,803) million, respectively. Excluding those special items, the ratio for the six months ended June 30, 2001 would have been 3.76, and the ratios for the years ended December 31, 2000, 1999, 1998 and 1997 would have been 3.68, 4.68, 4.43 and 4.29, respectively. The 2001 special items relate to the write-down of marketable securities, Bell Atlantic/GTE merger-related charges and a change in accounting for derivatives, creating mark-to-market adjustments. The 2000 and 1999 special items pertain to gains on sales of assets, net of asset impairments and other charges, Bell Atlantic/GTE merger-related charges, pension settlements and the gain on the mark-to-market of exchangeable notes. The 1998 and 1997 special items pertain to asset impairments and other charges, net of gains on sales of assets, Bell Atlantic/NYNEX Corporation merger-related charges, pension settlements and retirement incentive program costs. Sales of assets included wireline and wireless properties, GTE Government Systems and the gain associated with the merger of BC TELECOM Inc. and TELUS Corporation. Asset impairments included costs associated with exiting businesses.
USE OF PROCEEDS
Neither we nor Verizon Communications will receive any of the proceeds from the sale of the notes or the common stock of Verizon Communications by the selling securityholders.
DESCRIPTION OF NOTES AND SUPPORT OBLIGATIONS
We issued the notes under an indenture among Verizon Communications, First Union National Bank, as trustee, and us, referred to as the "original indenture", as supplemented by the supplemental indenture dated as of May 15, 2001, among Verizon Communication, the trustee and us, referred to as the "supplemental indenture," and together with the original indenture, the "indenture". The indenture provides for the issuance from time to time of debt securities in an unlimited dollar amount and an unlimited number of series.
Verizon Communications has agreed to make all payments required under the notes if we default on those payments under the indenture, as described under "--Description of the Support Agreement".
We have summarized selected provisions of the indenture, the support agreement, the share contribution agreement and the notes below. This is a summary, and it is not complete. It does not describe all exceptions and qualifications contained in the indenture, the support agreement or the share contribution agreement or all of the terms of the notes. You should read the indenture, the support agreement, the share contribution agreement and the notes for provisions that may be important to you. Copies of the indenture, the support agreement and the share contribution agreement and the form of notes are available for review at the corporate trust office of the trustee and may also be obtained from us upon request.
General
The notes are our senior unsecured obligations, are limited to an aggregate principal amount at maturity of $5,442,079,000, subject to an upward adjustment in the event there is an increased accretion rate, and rank equally with all of our other unsecured and unsubordinated indebtedness. The notes will mature on May 15, 2021.
We issued the notes at a price to investors of $551.26 per note. We will not pay cash interest on the notes unless an increased accretion rate is in effect or we elect to do so following a tax event. The maturity value of each note will exceed $1,000 in the event there is an increased accretion rate. The issue price represents an accretion rate of 3% per annum. However, the notes may become subject to an increased accretion rate. The notes are issued only in denominations of $1,000 principal amount at maturity.
You have the option to convert your notes into the common stock of Verizon Communications, par value $0.10 per share, at a conversion rate of 7.9318 shares of common stock of Verizon Communications per note. This is equivalent to an initial conversion price of $69.50 per share of common stock of Verizon Communications based on the price to the initial investors of the notes. The conversion rate is subject to adjustment if some events occur. Upon conversion, you will receive only whole shares of the common stock of Verizon Communications and a cash payment to account for any fractional share. Verizon Communications will include the potential dilutive effect of the shares of common stock of Verizon Communications issuable on conversion in its diluted earnings per share calculations only during the periods when all conditions are met for you to convert the notes.
You agree in the indenture, for U.S. federal income tax purposes, to treat your notes as contingent payment debt instruments and to be bound by our application of the Treasury Regulations that govern contingent payment debt instruments, including our determination that the rate at which interest will be considered to accrue for federal income tax purposes will be 7.51%, compounded semi-annually, which is the rate comparable to the rate at which we would borrow on a noncontingent, nonconvertible borrowing with terms and conditions otherwise comparable to the notes, including the rank, term and general market conditions. Accordingly, you are required to accrue interest on a constant yield to maturity basis at that rate, with the result that you will recognize taxable income significantly in excess of cash received while the notes are outstanding. In addition, you will recognize ordinary income upon a conversion of a note into the common stock of Verizon Communications equal to the excess, if any, between the value of the stock received on the conversion and your adjusted tax basis in the note. However, the proper application of the regulations that govern contingent payment debt instruments to you is uncertain in a number of respects, and if our treatment was successfully challenged by the Internal Revenue Service, it might be determined that, among other differences, you should have accrued interest income at a lower rate, should
not have recognized income or gain upon the conversion, or should not have recognized ordinary income upon a taxable disposition of your note.
YOU SHOULD CONSULT YOUR TAX ADVISOR REGARDING THE TAX TREATMENT OF THE NOTES AND WHETHER A PURCHASE OF THE NOTES IS ADVISABLE IN LIGHT OF THE AGREED UPON TAX TREATMENT AND YOUR PARTICULAR TAX SITUATION.
Ranking
The notes are our unsecured and unsubordinated obligations and will rank equally with all of our other unsecured and unsubordinated debt. Except as described below under "Description of Notes and Support Obligations," the obligations under the support agreement will be unsecured and unsubordinated obligations of Verizon Communications and will rank equally with all of its other unsecured and unsubordinated debt.
Interest
We will not pay cash interest on the notes unless an increased accretion rate is in effect or we elect to do so following a tax event. Interest will be based on a 360-day year comprised of twelve 30-day months, and will be payable semi-annually on May 15 and November 15. If an increased accretion rate is in effect for a semi-annual period, we will pay a portion of the increased accretion rate as cash interest at the rate of 0.25% per annum, or 0.125% per semi-annual period, of the applicable principal amount. Cash interest following a tax event and our election to pay the interest in cash will be paid at a rate equal to the accretion rate that would be in effect from time to time if we had not elected to pay cash. The record date for the payment of cash interest to registered holders of notes will be May 1 and November 1 of each year. We will give notice to the registered holders of the notes, no later than 15 days prior to each record date, of the amount of cash interest to be paid as of the next interest payment date.
Conversion Rights
Subject to the conditions described below, you may convert your notes into shares of the common stock of Verizon Communications at a conversion ratio of 7.9318 shares of the common stock of Verizon Communications per $1,000 principal amount at maturity of notes, a conversion ratio equivalent to an initial conversion price of $69.50 per share of common stock of Verizon Communications. The conversion ratio and the equivalent conversion price of a note in effect at any given time are referred to in this prospectus as the applicable conversion ratio and the accreted conversion price respectively, and will be subject to adjustment as described below. If a note has been called for redemption, you will be entitled to convert your note from the date of notice of the redemption until the close of business on the business day immediately preceding the date of redemption. You may convert fewer than all of your notes so long as your notes converted are an integral multiple of $1,000 principal amount at maturity, subject to an upward adjustment in the event there is an increased accretion rate.
You may surrender your notes for conversion into the common stock of Verizon Communications prior to maturity under the circumstances described below under "--Conversion Upon Satisfaction of Market Price Condition", "--Conversion Upon Satisfaction of Trading Price Condition", "--Conversion Upon Notice of Redemption" and "--Conversion Upon Specified Corporate Transactions".
Conversion Upon Satisfaction of Market Price Condition
During any quarterly conversion period, if the closing sales price of the common stock of Verizon Communications for at least 20 trading days in the 30 consecutive trading days ending on the first day of the quarterly conversion period is more than the applicable percentage of the accreted conversion price on the first day of that conversion period, then you may surrender your notes for conversion into the common stock of Verizon Communications prior to maturity. A "quarterly conversion period" will be the period from and including the 12th trading day in a fiscal quarter of Verizon Communications to but not including the 12th trading day in the immediately following fiscal quarter of Verizon Communications.
The conversion agent, First Union National Bank, will, on our behalf, determine if the notes are convertible and notify us and the trustee.
Conversion Upon Satisfaction of Trading Price Condition
During the five business day period following the ten business days after any nine consecutive trading day period in which the trading price for the notes for each day of that period was less than 95% of the product of the closing sales price of the common stock of Verizon Communications multiplied by the number of shares into which a note is convertible for that period, otherwise know as the "95% trading exception", then you may surrender your notes for conversion into the common stock of Verizon Communications prior to maturity. However, if at the time of conversion pursuant the 95% trading exception, the closing sales price of the common stock of Verizon Communications is greater than 100% of the accreted conversion price but equal to or less than the applicable percentage of the accreted conversion price, then you will receive, instead of the common stock of Verizon Communications based on the applicable conversion rate, cash or the common stock of Verizon Communications or a combination of both, at our option, with a value equal to the accreted principal amount of the notes on the conversion date, otherwise known as the "accreted value conversion".
In the event we choose to pay in the common stock of Verizon Communications or a combination of cash and the common stock of Verizon Communications in the case of an accreted value conversion, the common stock of Verizon Communications will be valued at the average closing sales price for the five trading days ending on the third trading day prior to the date of conversion. If we elect to pay all or a portion of the accreted principal amount upon an accreted value conversion in the common stock of Verizon Communications, we must notify you not less than nine trading days prior to the beginning of the five business day period in which you can convert pursuant to an accreted value conversion.
The "trading price" of the notes on any date of determination means the average of the secondary market bid quotations per note obtained by the conversion agent for $10,000,000 principal amount at maturity of the notes at approximately 3:30 p.m., New York City time, on that determination date from three independent nationally recognized securities dealers we select, provided that if at least three bids cannot reasonably be obtained by the conversion agent, but two bids are obtained, then the average of the two bids will be used, and if only one bid can reasonably be obtained by the conversion agent, this one bid will be used. If the conversion agent cannot reasonably obtain at least one bid for $10,000,000 principal amount at maturity of the notes from a nationally recognized securities dealer or, in our reasonable judgment, the bid quotations are not indicative of the secondary market value of the notes, then the trading price of the notes will be considered to equal (a) the then- applicable conversion rate of the notes multiplied by (b) the closing price on the New York Stock Exchange of the common stock of Verizon Communications on the determination date.
The conversion agent has no obligation to determine the trading prices of the notes unless requested by us. We have no obligation to make a request to determine the trading prices of the notes unless a holder of notes provides us with reasonable evidence that the trading price of the notes would be less than 95% of the product of the closing sales price of the common stock of Verizon Communications and the number of shares into which the notes are convertible; at which time, we will instruct the conversion agent to determine the trading price of the notes beginning on the next trading day and on each successive trading day until the trading price is greater than or equal to 95% of the product of the closing sales price of the common stock of Verizon Communications and the number of shares into which the notes are convertible.
Conversion Upon Notice of Redemption
You may surrender for conversion any of your notes called for redemption at
any time following receipt of a notice of redemption until the close of business
one business day prior to the redemption date, even if the notes are not
otherwise convertible at that time. If you have already delivered a purchase
notice or a change in control purchase notice for a note, however, you may not
surrender that note for conversion until you have withdrawn the notice in
accordance with the indenture.
Conversion Upon Specified Corporate Transactions
Even if the market price condition described above has not occurred, if Verizon Communications elects to:
. distribute to all holders of the common stock of Verizon Communications certain rights entitling them to purchase, for a period expiring within 60 days, the common stock of Verizon Communications at less than the quoted price at the time, or
. distribute to all holders of the common stock of Verizon Communications, Verizon Communications' assets, debt securities or certain rights to purchase its securities, which distribution has a per share value exceeding 15% of the closing price of the common stock of Verizon Communications on the day preceding the declaration date for that distribution,
we must notify holders of notes at least 20 days prior to the ex-dividend date for that distribution. Once we have given a notice, you may surrender your notes for conversion at any time until the earlier of close of business on the business day prior to the ex-dividend date or our announcement that the distribution will not take place. No adjustment to your ability to convert will be made if you will otherwise participate in the distribution without conversion.
In addition, if Verizon Communications is a party to a consolidation, merger or binding share exchange pursuant to which the common stock of Verizon Communications would be converted into cash, securities or other property, you may surrender notes for conversion at any time from and after the date which is 15 days prior to the anticipated effective date of the transaction until 15 days after the actual date of that transaction. If Verizon Communications is a party to a consolidation, merger or binding share exchange pursuant to which the common stock of Verizon Communications is converted into cash, securities or other property, then at the effective time of the transaction, the right to convert a note into Verizon Communications common stock will be changed into a right to convert it into the kind and amount of cash, securities and other property which you would have received if you had converted your notes immediately prior to the transaction. If the transaction also constitutes a change in control, you can require us to repurchase all or a portion of your notes as described under "--Change in Control".
Additional Conversion Information
The conversion rate is 7.9318 shares of common stock of Verizon Communications for each note and is subject to adjustment as described below. This is equivalent to an initial conversion price of $69.50 per share of common stock of Verizon Communications based on the issue price of the notes. You will not receive any cash payment representing any accrued interest upon conversion of a note, except any accrued and unpaid cash interest which is payable as a result of an increased accretion rate. Additionally, you will not receive fractional shares upon conversion of the notes. Instead, upon conversion we will deliver to you a fixed number of shares of common stock and a cash payment to account for fractional shares. The cash payment for fractional shares will be based on the closing price of common stock of Verizon Communications on the trading day immediately prior to the conversion date. Delivery of the common stock of Verizon Communications will be considered to satisfy our obligation to pay the principal amount of the notes, including accrued cash interest. Accrued cash interest will be considered paid in full rather than canceled, extinguished or forfeited. We will not adjust the conversion ratio to account for the accrued cash interest.
If you wish to exercise your conversion right, you must deliver an irrevocable conversion notice, together, if the notes have been issued in certificated form, with the note certificate, to the conversion agent. The first day on which the conversion agent receives all of the required documentation is the "conversion date". As soon as practicable after the conversion date, the conversion agent will deliver certificates to you for the whole shares of Verizon Communications common stock and cash for any fractional shares. The person in whose name the certificate is registered will be treated as the securityholder of record as of the close of business on the conversion date. You may obtain copies of the required form of the conversion notice from the conversion agent.
Upon a conversion, based on our treatment of the notes for U.S. federal income tax purposes, you would be required to recognize ordinary income upon a conversion of a note into the common stock of Verizon Communications equal to the excess, if any, between the value of the stock received on the conversion and your adjusted tax basis in the note. For a more detailed discussion, see "Certain United States Federal Income Tax Consequences".
If you submit a note for conversion after we have exercised our option to pay cash interest instead of accruing interest following a tax event or if we are required to make a cash payment pursuant to an interest adjustment between a record date and the opening of business on the next interest payment date, you must pay us an amount equal to the interest payable on the converted principal amount. You are not required to pay this amount on notes or portions of notes called for redemption on a redemption date occurring during the period from the close of business on a record date and ending on the opening of business on the first business day after the next interest payment date, or if this interest payment date is not a business day, the second business day after the interest payment date.
Adjustments to Conversion Rate
The conversion rate will be subject to adjustment only upon the following events:
. the payment of dividends and other distributions to all holders of the common stock of Verizon Communications on the common stock of Verizon Communications payable exclusively in the common stock of Verizon Communications;
. the issuance to all holders of the common stock of Verizon Communications of rights or warrants that allow the holders of the common stock of Verizon Communications to purchase the common stock of Verizon Communications at less than the current market price; provided that no adjustment will be made if you may participate in the transaction on a basis and with notice that Verizon Communications' board of directors determines to be fair and appropriate or in some other cases;
. subdivisions or combinations of the common stock of Verizon Communications;
. the payment of dividends and other distributions to all holders of the common stock of Verizon Communications consisting of evidences of Verizon Communications' indebtedness, securities, capital stock or assets, except for dividends and other distributions paid in cash and those rights or warrants referred to in the next paragraph relating to stockholders rights plans, provided that no adjustment will be made if you may participate in the transactions;
. the payment to holders of the common stock of Verizon Communications for a tender or exchange offer, other than an odd-lot offer, by Verizon Communications or any of its subsidiaries for the common stock of Verizon Communications to the extent that the offer involves aggregate consideration that, together with (1) any cash and the fair market value of any other consideration payable for any tender offer by Verizon Communications or any of its subsidiaries for shares of the common stock of Verizon Communications consummated within the preceding 12 months not triggering a conversion price adjustment and (2) all-cash distributions to all or substantially all stockholders made within the preceding 12 months not triggering a conversion price adjustment, exceeds an amount equal to 15% of the market capitalization of the common stock of Verizon Communications on the expiration date of the tender offer; and
. the distribution to all or substantially all stockholders of all-cash distributions in an aggregate amount that, together with (1) any cash and the fair market value of any other consideration payable for any tender offer by Verizon Communications or any of its subsidiaries for shares of the common stock of Verizon Communications consummated within the preceding 12 months not triggering a conversion price adjustment and (2) all other all-cash distributions to all or substantially all stockholders made within the preceding 12 months not
triggering a conversion price adjustment, exceeds an amount equal to 15% of the market capitalization of the common stock of Verizon Communications on the business day immediately preceding the day on which Verizon Communications declares the distribution.
If Verizon Communications were to adopt a stockholders rights plan under which it issued rights providing that each share of the common stock of Verizon Communications issued upon conversion of the notes at any time prior to the distribution of separate certificates representing the rights will be entitled to receive the rights, there shall not be any adjustment to the conversion rate as a result of:
. the issuance of the rights;
. the distribution of separate certificates representing the rights;
. the exercise or redemption of the rights in accordance with any rights agreement; or
. the termination or invalidation of the rights.
We may increase the conversion rate as permitted by law for at least 20 days, so long as the increase is irrevocable during the period. No adjustment in the accreted conversion price will be required unless the adjustment would require an increase or decrease of at least 1% of the accreted conversion price. If the adjustment is not made because the adjustment does not change the accreted conversion price by more than 1%, then the adjustment that is not made will be carried forward and taken into account in any future adjustment. Except as specifically described above, the accreted conversion price will not be subject to adjustment in the case of the issuance of any of the common stock of Verizon Communications, or securities convertible into or exchangeable for the common stock of Verizon Communications.
Redemption Rights
On or after May 15, 2006, we may redeem for cash all or part of the notes at any time, upon not less than 30 nor more than 60 days' notice by mail to holders of notes, for a price equal to the then accreted principal amount plus any accrued and unpaid cash interest to the redemption date.
The table below shows redemption prices of notes at May 15, 2006, at each following May 15 prior to maturity and the price at maturity on May 15, 2021, assuming that neither an increased accretion rate nor a tax event occurs. The prices reflect the accreted principal amount calculated through each date. The redemption price of a note redeemed between these dates would include an additional increase in the accreted principal amount accrued since the immediately preceding date in the table to the actual redemption date.
Redemption Date Interest Price --------------- -------- ---------- May 15, 2006........................................ $ 88.50 $ 639.76 May 15, 2007........................................ $107.84 $ 659.10 May 15, 2008........................................ $127.76 $ 679.02 May 15, 2009........................................ $148.28 $ 699.54 May 15, 2010........................................ $169.43 $ 720.69 May 15, 2011........................................ $191.21 $ 742.47 May 15, 2012........................................ $213.65 $ 764.91 May 15, 2013........................................ $236.77 $ 788.03 May 15, 2014........................................ $260.59 $ 811.85 May 15, 2015........................................ $285.13 $ 836.39 May 15, 2016........................................ $310.41 $ 861.67 May 15, 2017........................................ $336.45 $ 887.71 May 15, 2018........................................ $363.28 $ 914.54 May 15, 2019........................................ $390.92 $ 942.18 May 15, 2020........................................ $419.40 $ 970.66 May 15, 2021 (maturity)............................. $448.74 $1,000.00 |
If the trustee selects a portion of your notes for partial redemption and you convert a portion of the same notes, the converted portion will be considered to be from the portion selected for redemption. Each note will be redeemed in whole.
Repurchase Right
You have the right to require us to repurchase your notes on May 15, 2004, May 15, 2006, May 15, 2011 and May 15, 2016. We will be required to repurchase any outstanding notes for which you deliver a written purchase notice to the paying agent. This notice must be delivered during the period beginning at any time from the opening of business on the date that is 20 business days prior to the relevant repurchase date until one business day prior to the relevant repurchase date. Under the terms of the indenture, we will have the right to pay the repurchase price of the notes at any time during the five business days following the repurchase date. If the purchase notice is given and withdrawn during the period, we will not be obligated to repurchase the related notes. Our repurchase obligation will be subject to some additional conditions. Also, our ability to satisfy our repurchase obligations may be affected by the factors described in "Risk Factors" under the caption "We may not have the ability to raise funds necessary to repurchase the notes following a change in control or at your option."
The repurchase price payable will be equal to the accreted principal amount plus accrued and unpaid cash interest through the repurchase date. The repurchase prices of a note, assuming that an increase in the accretion rate does not occur, as of each of the repurchase dates will be:
. $602.77 per note on May 15, 2004;
. $639.76 per note on May 15, 2006;
. $742.47 per note on May 15, 2011; and
. $861.67 per note on May 15, 2016.
We may choose to pay the repurchase price in cash or the common stock of Verizon Communications, or a combination of both. For a discussion of your tax treatment if you receive cash, the common stock of Verizon Communications or any combination of the two, see "Certain United States Federal Income Tax Consequences--Sale, Exchange, Conversion or Redemption".
If we have previously exercised our option to pay cash interest instead of accreting the principal amount of the notes following a tax event, the repurchase price will be equal to the restated principal amount plus accrued and unpaid interest through the repurchase date. See "--Tax Event".
If we choose to pay the repurchase price in the common stock of Verizon Communications or a combination of cash and the common stock of Verizon Communications, we are required to give notice not less than 20 business days prior to each repurchase date to you, if you are a holder of notes, at your address shown in the register of the registrar, and to beneficial owners as required by applicable law, stating among other things:
. whether we will pay the repurchase price of the notes in the common stock of Verizon Communications, or any combination of cash and the common stock of Verizon Communications, specifying the percentages of each;
. the method of calculating the price of the common stock of Verizon Communications; and
. the procedures that you must follow to require us to repurchase your notes.
Simultaneously with our notice of repurchase, we will disseminate a press release through Reuters Economic Services or Bloomberg Business News containing this information or publish the information on our web site on the World Wide Web or through any other public medium as we may use at that time.
If no notice is given of our election to pay the repurchase price in the common stock of Verizon Communications or a combination of cash and the common stock of Verizon Communications, we will pay the repurchase price with cash.
Your notice electing to require us to repurchase your notes must state:
. if certificated notes have been issued, the notes certificate numbers, or if not certificated, the notice must comply with appropriate DTC procedures;
. the portion of the principal amount at maturity of the notes to be repurchased, in multiples of $1,000;
. that the notes are to be repurchased by us pursuant to the applicable provisions of the notes; and
. in the event we elect, pursuant to the notice that we are required to give, to pay the repurchase price in shares of the common stock of Verizon Communications, in whole or in part, but the repurchase price is ultimately to be paid to you entirely in cash because any of the conditions specified in the indenture to payment of the repurchase price or portion of the repurchase price in shares of the common stock of Verizon Communications is not satisfied prior to the close of business on the last day prior to the repurchase date, as described below, whether you elect:
. to withdraw the repurchase notice as to some or all of the notes to which it relates, or
. to receive cash for the entire repurchase price for all notes or portions of notes subject to the purchase notice.
If you fail to make the election described in the final bullet point above, you will be considered to have elected to receive cash for the entire repurchase price for all notes subject to the repurchase notice in these circumstances. For a discussion of your tax treatment if you receive cash instead of shares of common stock of Verizon Communications, see "Certain United States Federal Income Tax Consequences--Sale, Exchange, Conversion or Redemption".
You may withdraw any purchase notice by a written notice of withdrawal delivered to the paying agent prior to the close of business one business day prior to the repurchase date. The notice of withdrawal must state:
. the principal amount at maturity of the withdrawn notes;
. if certificated notes have been issued, the certificate numbers of the withdrawn notes, or if not certificated, your notice must comply with appropriate DTC procedures; and
. the principal amount at maturity, if any, which remains subject to the purchase notice.
If we elect to pay the repurchase price, in whole or in part, in shares of the common stock of Verizon Communications, the number of shares to be delivered by us will be equal to the portion of the repurchase price to be paid in the common stock of Verizon Communications divided by the market price, as defined below, of one share of the common stock of Verizon Communications as determined by us in our purchase notice. The cash payment for fractional shares will be based on the closing price of common stock of Verizon Communications on the trading day immediately prior to the repurchase date.
The "market price" means the average of the closing sales price of the common stock of Verizon Communications for the five trading day period ending on the third business day prior to the applicable repurchase date, if the third business day prior to the applicable repurchase date is a trading day, or if not, then on the last trading day prior to the third business day, appropriately adjusted to take into account the occurrence, during the period commencing on the first of the trading days during the five trading day period and ending on the repurchase date, of some events that would result in an adjustment of the conversion rate.
Because the market price of the common stock of Verizon Communications is determined prior to the applicable repurchase date, you bear the market risk relating to the value of the common stock of Verizon Communications to be received from the date the market price is determined to the repurchase date. We may pay the repurchase price or any portion of the repurchase price in shares of common stock of Verizon Communications only if the information necessary to calculate the market price is published in a daily newspaper of national circulation or other widely disseminated public source.
Upon determination of the actual number of shares of common stock of Verizon Communications to be paid upon repurchase of the notes, we will disseminate a press release through Reuters Economic Services or Bloomberg Business News containing this information or publish the information on our web site on the World Wide Web or through any other public medium as we may use at that time.
You must either effect book-entry transfer or deliver your notes, together with necessary endorsements, to the office of the paying agent after delivery of the repurchase notice to receive payment of the repurchase price. You will receive payment of the repurchase price no later than five business days after the repurchase date.
Change in Control
If a change in control, as defined below, occurs, you will have the right, at your option, to require us to repurchase all of your notes not previously called for redemption, or any portion of the principal amount of your notes that is equal to $1,000 or an integral multiple of $1,000. The price we are required to pay is equal to the accreted principal amount plus any accrued and unpaid cash interest.
Within 30 days after the occurrence of a change in control, we must give to holders of notes notice of the change in control and of the repurchase right arising as a result of the change in control. We must also deliver a copy of this notice to the trustee. To exercise the repurchase right, you must deliver on or before the 30th day after the date of our notice, irrevocable written notice to the trustee of the exercise by you of your repurchase right, together with your notes for which the right is being exercised. We are required to repurchase the notes on the date that is 45 days after the date of our notice.
A change in control will be considered to have occurred at the time after the notes are originally issued that any of the following occurs:
. any person, including any syndicate or group considered to be a "person" under Section 13(d)(3) of the Exchange Act, acquires beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of transactions, of the common stock of Verizon Communications entitling the person to exercise 50% or more of the total voting power of all common stock of Verizon Communications that is entitled to vote generally in elections of directors, other than an acquisition by Verizon Communications, any of its subsidiaries or any of its employee benefit plans; or
. Verizon Communications merges or consolidates with or into any other person, any merger of another person into Verizon Communications, or Verizon Communications conveys, sells, transfers or leases all or substantially all of its assets to another person, other than any transaction:
. that does not result in any reclassification, conversion, exchange or cancellation of outstanding common stock of Verizon Communications;
. pursuant to which the holders of the common stock of Verizon Communications immediately prior to the transaction have the entitlement to exercise, directly or indirectly, 50% or more of the total voting power of all the common stock of Verizon Communications entitled to vote generally in the election of directors of the continuing or surviving corporation immediately after the transaction; or
. which is effected solely to change the jurisdiction of incorporation of Verizon Communications and results in a reclassification, conversion or exchange of outstanding shares of the common stock of Verizon Communications solely into the common stock of the surviving corporation.
However, a change in control will not be considered to have occurred if either:
. the closing sales price per share of the common stock of Verizon Communications for any five trading days within the period of 10 consecutive trading days ending immediately after the later of the change in control or the public announcement of the change in control, in the case of a change in control relating to an acquisition of capital stock, or the period of 10 consecutive trading days ending immediately before the change in control, in the case of change in control relating to a merger, consolidation or asset sale, equals or exceeds 105% of the accreted conversion price of the notes in effect on each of those trading days or
. all of the consideration in a merger or consolidation otherwise constituting a change in control, other than cash payments not to exceed 5% of the total value of the merger or consolidation, excluding cash payments for fractional shares and cash payments made pursuant to dissenters' appraisal rights, consists of shares of common stock traded on a national securities exchange or quoted on the Nasdaq National Market, or shares of common stock which will be traded or quoted immediately following the merger or consolidation, and as a result of the merger or consolidation the notes become convertible into the common stock of the surviving corporation.
For purposes of these provisions:
. the conversion price is equal to the accreted principal amount divided by the applicable conversion rate;
. whether a person is a "beneficial owner" will be determined in accordance with Rule 13d-3 under the Exchange Act; and
. "person" includes any syndicate or group that would be considered to be a "person" under Section 13(d)(3) of the Exchange Act.
The foregoing provisions would not necessarily provide you with protection if Verizon Communications is involved in a highly leveraged or other transaction that may adversely affect you.
If a change in control occurred, we may not have sufficient funds available in the time period specified to repurchase the notes upon a change in control. See "Risk Factors" under the caption "We may not have the ability to raise the funds necessary to repurchase the notes following a change in control or at your option." In addition, Verizon Communications has, and may in the future incur, other indebtedness with similar change in control provisions permitting its holders to accelerate or to require us to repurchase our indebtedness upon the occurrence of similar events or on some specified dates. If we fail to repurchase the notes when required following a change in control, we will be in default under the indenture.
Interest Adjustment
Beginning on May 15, 2004, if the closing sales price of the common stock of Verizon Communications is equal to or less than 60% of the accreted conversion price of the notes for any 20 trading days out of the last 30 consecutive trading days ending three business days prior to any May 15 or November 15, then the accretion rate on the notes for the semi-annual period commencing on that date will be subject to an increased accretion rate equal to the applicable per annum reset rate in effect at that time. Any increased accretion rate made pursuant to this provision will remain in effect until the next succeeding May 15 or November 15 when the closing sales price of the common stock of Verizon Communications is not equal to or less than 60% of the accreted conversion price of the notes for any 20 trading days out of the last 30 consecutive trading days ending three business days prior to that date, at which time the accretion rate will revert to 3%. The reset rate will be established by the reset rate agent as of each reset rate determination date. The "reset rate determination date" shall be the date three business days preceding each of:
. May 15, 2004, in which case the reset rate will be the two-year reset rate;
. May 15, 2006, in which case the reset rate will be the five-year reset rate;
. May 15, 2008, in which case the reset rate will be the two-year reset rate;
. November 15, 2009, in which case the reset rate will be the one-year reset rate;
. May 15, 2011, in which case the reset rate will be the five-year reset rate;
. May 15, 2013, in which case the reset rate will be the two-year reset rate;
. November 15, 2014, in which case the reset rate will be the one-year reset rate;
. May 15, 2016, in which case the reset rate will be the five-year reset rate;
. May 15, 2018, in which case the reset rate will be the two-year reset rate; and
. November 15, 2019, in which case the reset rate will be the one-year reset rate.
The reset rate determined as of each reset rate determination date will be equal to the rate that would, in the sole judgment of the reset rate agent, result in a trading price of par of our hypothetical issue of senior, nonconvertible, noncontingent, fixed rate debt securities with:
. a final maturity equal to, in the case of the five-year reset rate, five years; in the case of the two-year reset rate, two years; and in the case of the one-year reset rate, one year;
. an aggregate principal amount equal to the accreted principal amount of the notes; and
. covenants and other provisions that are, insofar as would be practicable for an issue of senior, nonconvertible, fixed-rate debt securities, substantially identical to those of the notes.
In no case, however, will the reset rate ever be greater than 11% or less than 3%. Also, if the reset rate agent has not established the reset rate for the applicable semi-annual period, or if the reset rate agent determines in its sole judgment that there is no suitable reference rate from which the reset rate may be determined, the reset rate for that period will be the reset rate most recently determined (except if there is no reset rate most recently determined, in which case the reset rate shall be a rate mutually agreed upon by the reset rate agent and us reflecting current market conditions), that reset rate to remain in effect until the reset rate agent determines that there is a suitable reference rate at which time the reset rate agent shall determine a new reset rate for the period ending on the next reset rate determination date. The applicable per annum reset rate for a note that is subject to an increased accretion rate shall be determined as to any period for which that increase is applicable as follows in each case until a new reset rate is in effect:
. effective May 15, 2004, the applicable per annum reset rate on the note will be the two-year reset rate established on the reset rate determination date three business days preceding May 15, 2004;
. effective May 15, 2006, the applicable per annum reset rate on the note will be the five-year reset rate established on the reset rate determination date three business days preceding May 15, 2006;
. effective May 15, 2010 the applicable per annum reset rate on the note will be the one-year reset rate established on the reset rate determination date three business days preceding November 15, 2009;
. effective May 15, 2011 the applicable per annum reset rate on the note will be the five-year reset rate established on the reset rate determination date three business days preceding May 15, 2011;
. effective May 15, 2015, the applicable per annum reset rate on the note will be the one-year reset rate established on the reset rate determination date three business days preceding November 15, 2014;
. effective May 15, 2016, the applicable per annum reset rate on the note will be the five-year reset rate established on the reset rate determination date three business days preceding May 15, 2016; and
. effective May 15, 2020, the applicable per annum reset rate on the Note will be the one-year reset rate established on the reset rate determination date three business days preceding November 15, 2019.
Notwithstanding the foregoing:
. if a note first becomes subject to an increased accretion rate, or first becomes subject to an increased accretion rate following a reversion of the accretion rate to 3%, on or after May 15, 2008, but not later than November 15, 2009, the initial reset rate will be the two-year reset rate established on the reset rate determination date three business days preceding May 15, 2008 and thereafter the applicable reset rate will be determined in accordance with the prior sentence;
. if a note first becomes subject to an increased accretion rate, or first becomes subject to an increased accretion rate following a reversion of the accretion rate to 3%, on or after May 15, 2013, but not later than November 15, 2014, the initial reset rate will be the two-year reset rate established on the reset rate determination date three business days preceding May 15, 2013 and thereafter the applicable reset rate will be determined in accordance with the prior sentence; and
. if a note first becomes subject to an upward adjustment of accretion rate, or first becomes subject to an upward adjustment following a reversion of the accretion rate to 3%, on or after May 15, 2018, but not later than November 15, 2019, the initial reset rate will be the two- year reset rate established on the reset rate determination date three business days preceding May 15, 2018 and thereafter the applicable reset rate will be determined in accordance with the prior sentence.
If an increased accretion rate is in effect for a particular semi-annual period, we will pay a portion of the increased accretion rate as cash interest at an annualized rate of 0.25%, or 0.125% per semi-annual period, of the applicable principal amount.
In the event of an increased accretion rate, we will pay cash interest on each May 15 or November 15 to holders of record on the preceding May 1 or November 1, as the case may be. Cash interest will be determined on the basis of a 360-day year, consisting of twelve 30-day months.
In the event of an increased accretion rate, the accreted principal amount of the notes will increase at a rate greater than the initial accretion rate, and the maturity value of the notes will exceed their initial maturity value of $1,000. The redemption and repurchase prices set forth in the tables below will also increase.
The "closing sales price" of the common stock of Verizon Communications on any date means the closing per share sale price, or if no closing sales price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average asked prices, on that date as reported in composite transactions for the principal U.S. securities exchange on which the common stock of Verizon Communications is traded or, if the common stock of Verizon Communications is not listed on a U.S. national or regional securities exchange, as reported by the Nasdaq system.
In the event of an increased accretion rate, we will disseminate a press release through Reuters Economic Services or Bloomberg Business News containing this information or publish the information on our web site on the World Wide Web or through any other public medium as we may use at that time.
Reset Rate Agent; Determinations Conclusive
We will appoint a reset rate agent. For the determination of the reset rate, the reset rate agent shall seek indicative reference rates from three nationally recognized investment banks. The determination of any reset rate will be conclusive and binding upon the reset rate agent, Verizon Communications, us, the trustee and you, in the absence of manifest error.
The reset rate agent may be removed at any time by us giving at least sixty days' written notice to the reset rate agent. The reset rate agent may resign at any time upon giving at least thirty days' written notice.
Tax Event
We can elect to pay cash interest on the notes from and after the date a tax event, as defined below, occurs instead of accreting the principal amount of the notes. If that happens, the principal amount on which we pay interest will be restated and will be equal to the accreted principal amount as of the day of restatement. This restated principal amount will be the amount due at maturity. If we elect this option, interest will be based on a 360-day year comprised of twelve 30-day months. Interest will accrue from our option exercise date and will be payable semi-annually in arrears on May 15 and November 15, each, an "interest payment date"; provided in the event we exercise our option to commence paying cash interest as of a date less than 60 days prior to any interest payment date, the first payment of cash interest shall be made on the interest payment date next succeeding that interest payment date.
The term "tax event" means the receipt by us of an opinion of a nationally recognized independent tax counsel experienced in those matters to the effect that, as a result of:
. any amendment to or change, including any announced prospective change, which will not include a proposed change, in the laws, or any regulations under the laws, of the United States or any political subdivision or taxing authority of the United States or any political subdivision, provided that a tax event will not occur more than 90 days before the effective date of any prospective change in those laws or regulations; or
. any judicial decision or official administrative pronouncement, ruling, regulatory procedure, notice or announcement, including any notice or announcement of intent to adopt those procedures or regulations, an "administrative action"; or
. any amendment to or change in the administrative position or interpretation of any administrative action or judicial decision that differs from the previously generally accepted position, in each case, by any legislative body, court, governmental agency or regulatory body, irrespective of the manner in which that amendment or change is made known, which amendment or change is effective, or that administrative action or decision is announced, in each case, on or after the date of original issuance of the note;
there is more than an insubstantial risk that interest payable on the note, including original issue discount and any interest payable pursuant to an increased accretion rate, either:
. would not be deductible on a current accrual basis; or
. would not be deductible under any other method, in whole or in part, by us for United States federal income tax purposes.
Restrictions
Lien on assets
If we mortgage, pledge or otherwise subject to any lien the whole or any part of any property or assets which we now own or acquire in the future, then we will secure the notes and any of our other obligations which may then be outstanding and entitled to the benefits of a covenant similar in effect to this covenant to the same extent and in the same proportion as the debt or other obligation that is secured by the mortgage, pledge or other lien. The notes will remain secured for the same period as the other debt remains secured. Exceptions to this requirement include the following:
. purchase-money mortgages or liens;
. liens on any property or asset that existed at the time when we acquired the property or asset;
. any deposit or pledge to secure public or statutory obligations;
. any deposit or pledge with any governmental agency required to qualify us to conduct our business, or any part of our business, or to entitle us to maintain self-insurance or to obtain the benefits of any law relating to workmen's compensation, unemployment insurance, old age pensions or other social security;
. any deposit or pledge with any court, board, commission or governmental agency as security related to the proper conduct of any proceeding before it; or
. any mortgage, pledge or lien on any property or asset of any of our affiliates, including, without limitation, Verizon Communications, even if the affiliate may have acquired that property or asset from us.
Limitation on merger, consolidation and sales of assets
Neither we nor Verizon Communications may consolidate with or merge into any other entity or convey, transfer or lease substantially all of our or its properties and assets to any person, and neither we nor Verizon
Communications may permit any person to consolidate with or merge into us or it or convey, transfer or lease substantially all of our or its properties and assets to any person, unless:
. in the event we or Verizon Communications consolidate or merge into another person or convey, transfer or lease substantially all of our or its properties and assets to another person, the successor assumes by supplemental indenture the obligations of its predecessor;
. after giving effect to the transaction, there is no default under the indenture; and
. if, as a result of any consolidation or merger or conveyance, transfer or lease described in this covenant, our properties or assets would become subject to any lien which would not be permitted by the asset lien restriction described above without equally and ratably securing the notes as described above, we or that successor person, as the case may be, will take the steps as are necessary effectively to secure the notes equally and ratably with, or prior to, all indebtedness secured by those liens as described above.
In case we or Verizon Communications consolidate or merge into another person or convey, transfer or lease substantially all of our or its properties and assets to another person, that person will be our or Verizon Communications' successor, and we will be relieved of all obligations under the notes and the indenture or Verizon Communications will be relieved of all obligations under the support agreement and the indenture, as the case may be.
Events of Default
The following are events of default for the notes:
. our failure for 90 days to pay when due any cash interest on the notes in the event there is an increased accretion rate in effect or after we elect to pay cash interest on the notes following a tax event;
. our failure to pay principal on the notes, or after we elect to pay cash interest on the notes following a tax event, the restated principal amount, when due, whether at maturity, by declaration, when called for redemption, when required to be purchased by you or otherwise;
. our failure to perform, or breach of, any covenant or warranty in the notes or in the indenture and applicable to the notes for 90 days after notice to us and Verizon Communications by the trustee or by holders of at least 25% in principal amount of the outstanding notes; and
. some events involving bankruptcy, insolvency or reorganization of Verizon Communications or us.
If an event of default applicable to the notes occurs and is continuing, either the trustee or the holders of at least 25% in principal amount of the outstanding notes may declare the principal of all the notes, together with any accrued interest on the notes, to be immediately due and payable by notice in writing to us and Verizon Communications. If it is the holders of notes who give notice of that declaration of acceleration to us and Verizon Communications, then they must also give notice to the trustee.
In order for you to initiate proceedings for a remedy under the indenture, 25% in principal amount of the outstanding notes must first give notice to us and Verizon Communications as provided above, must request that the trustee initiate a proceeding in its own name and must offer the trustee a reasonable indemnity against costs and liabilities. If the trustee still refuses for 60 days to initiate the proceeding, and no inconsistent direction has been given to the trustee by holders of a majority of the outstanding notes, you may initiate a proceeding as long as you do not adversely affect the rights of any other holders of notes.
The holders of a majority in principal amount of the outstanding notes may rescind a declaration of acceleration relating to that series if we or Verizon Communications have paid or deposited with the trustee a sum sufficient to pay the amounts set forth in the applicable provisions of the indenture and all events of default, besides the failure to pay principal due solely because of the declaration of acceleration, have been cured or waived.
If we default on the payment of any installment of interest on the notes and fail to cure the default within 90 days, or if we default on the payment of principal of the notes when it becomes due, then the trustee may require us to pay all amounts due to the trustee on the notes, with interest on the overdue principal, interest or any premium payments, in addition to the expenses of collection.
Notices
The trustee is required to give notice to holders of the notes of a default, which remains uncured or has not been waived, that is known to the trustee within 90 days after the default has occurred. In the event of a default described in the third bullet point under "Events of Default," the trustee shall not give notice to holders of the notes until at least 60 days after the occurrence of that default. The trustee may withhold the notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or responsible officers of the trustee in good faith determine that the withholding of notice is in the interest of the holders of notes, except that the trustee may not withhold the notice in the case of a default in the payment of principal, interest or any premium on any of the notes.
Waiver
The holders of a majority in principal amount of the outstanding notes may waive any past default or event of default except a default in the payment of principal interest or premium on the notes or a default relating to a covenant or provision that cannot be modified or amended without the consent of each affected holder of notes.
Rights and duties of the trustee
The holders of a majority in principal amount of outstanding notes may direct the time, method and place of conducting any proceeding for any remedy available to the trustee for the notes or exercising any trust or other power conferred on the trustee for the notes. The trustee may decline to follow that direction if it would involve the trustee in personal liability or would be illegal. During a default, the trustee is required to exercise the standard of care and skill that a prudent man would exercise under the circumstances in the conduct of his own affairs. The trustee is not obligated to exercise any of its rights or powers under the indenture at your request or direction unless you have offered to the trustee reasonable security or indemnity.
The trustee is entitled, in the absence of bad faith on its part, to rely on an officer's certificate from us or Verizon Communications before taking action under the indenture.
Supplemental indentures
Supplemental indentures not requiring your consent
We may, without your consent, enter into supplemental indentures for other specified purposes, including to cure any ambiguity or inconsistency in the indenture or in the notes or make any other provisions for matters or questions arising under the indenture or the support agreement, as long as the interests of the holders of notes are not adversely affected in any material respect.
Supplemental indentures requiring your consent
With the consent of the holders of more than a majority in principal amount of the outstanding notes, the indenture permits us, Verizon Communications and the trustee to supplement or modify in any way the terms of the indenture for that series or your rights. However, without the consent of each holder of notes, we, Verizon Communications and the trustee may not:
. reduce the principal of or premium on or change the stated final maturity of any note;
. reduce the rate of or change the time for payment of interest in any note;
. reduce or alter the method of computation of any amount payable upon redemption, repayment or repurchase of any note by us (or the time when the redemption, repayment or purchase may be made);
. make the principal or interest on any note payable in a currency other than that stated in the note or change the place of payment;
. impair the right of any holder of notes to sue for payment of the principal, interest or premium on a note that would be due and payable at the maturity of that note or upon redemption;
. modify any provisions of the support agreement or share contribution agreement except as described under "Supplemental indentures not requiring your consent" above; or
. reduce the percentage of principal amount of the outstanding notes required to supplement the indenture or to waive any of its provisions.
Description of the Support Agreement
Under a support agreement, dated as of October 31, 2000, Verizon Communications has agreed to:
. own directly or indirectly all of our voting capital stock issued and outstanding at any time;
. make sure that we maintain at all times a positive tangible net worth, as determined in accordance with generally accepted accounting principles;
. provide us with any funds we need to make any timely payment of principal, interest or any premium on the notes, if we cannot obtain funds from other sources on commercially reasonable terms.
Neither we nor Verizon Communications can terminate the support agreement until all of the debt supported by the support agreement, including the notes, has been paid in full. Neither we nor Verizon Communications can amend the support agreement in any way that adversely affects your rights unless you consent in writing.
If we fail or refuse to take timely action to enforce our rights under the support agreement or if we default in the timely payment of principal, interest or any premium, you have the right to proceed directly against Verizon Communications to enforce the rights under the support agreement or to obtain payment of the defaulted principal, interest or premium owed to you. In no event will you have recourse under the terms of the support agreement to or against the stock or assets of Verizon Services Corp., Telecom Corporation of New Zealand Limited or any operating telephone company which may from time to time be owned directly or indirectly by Verizon Communications. Except for the exclusion of this stock and assets from recourse, Verizon Communications' obligations under the support agreement rank equally with its other unsecured and unsubordinated debt.
As of June 30, 2001, Verizon Communications' assets not subject to the exclusion described in the preceding paragraph had a book value of approximately $68.4 billion. Verizon Communications is a holding company, and therefore, its right and the right of its creditors (including you), to realize upon the assets of any subsidiary of Verizon Communications, whether following any liquidation or reorganization of that subsidiary, or otherwise, are subject to prior claims of creditors of that subsidiary, except to the extent that claims of Verizon Communications itself as a creditor of a subsidiary may be recognized.
Description of the Share Contribution Agreement
Under a share contribution agreement with Verizon Communications dated May 15, 2001, Verizon Communications has agreed to provide us with any shares of the common stock of Verizon Communications necessary to satisfy the conversion requirements under the notes.
Neither we nor Verizon Communications can terminate the share contribution agreement until all of the notes have been paid in full. Neither we nor Verizon Communications can amend the share contribution agreement in any way that adversely affects your rights unless you consent in writing.
If we fail or refuse to take timely action to enforce our rights under the share contribution agreement or if we default in the timely delivery of the common stock of Verizon Communications upon conversion of the notes into the common stock of Verizon Communications, you have the right to proceed directly against Verizon Communications to enforce the rights under the share contribution agreement in order to convert the notes into the common stock of Verizon Communications.
Concerning the Trustee
First Union National Bank is the trustee, registrar, paying agent and conversion agent.
We, Verizon Communications and affiliates of Verizon Communications maintain banking relationships in the ordinary course of business with the trustee. The trustee also serves as trustee or paying agent for various debt issues by us and other affiliates of Verizon Communications.
Limitations of Claims in Bankruptcy
If we or Verizon Communications is the subject of a bankruptcy proceeding, your claim is, under Title 11 of the United States Code, limited to the issue price of the notes plus accrued interest from the date of issue to the commencement of the proceeding.
Governing Law
The indenture and the notes are governed by, and construed in accordance with, the law of the State of New York.
Form, Exchange, Registration and Transfer
We have agreed to issue the notes only in book-entry form, without interest coupons. We will not charge a service charge for any registration of transfer or exchange of the notes. We may, however, require the payment of any tax or other governmental charge payable for that registration.
Notes will be exchangeable for other notes, for the same total principal amount and for the same terms but in different authorized denominations in accordance with the indenture. You may present notes for registration of transfer at the office of the security registrar or any transfer agent we designate. The security registrar or transfer agent will effect the transfer or exchange when it is satisfied with the documents of title and identity of the person making the request.
We have appointed the trustee as security registrar for the notes. We may at any time rescind that designation or approve a change in the location through which any registrar acts. We are required to maintain an office or agency for transfers and exchanges in each place of payment. We may at any time designate additional registrars for the notes.
In the case of any redemption, the security registrar will not be required to register the transfer or exchange of any notes either:
. during a period beginning 15 business days prior to the mailing of the relevant notice of redemption and ending on the close of business on the day of mailing of the notice, or
. if the notes have been called for redemption in whole or in part, except the unredeemed portion of any notes being redeemed in part.
Payment and Paying Agents
Payments on the notes will be made in U.S. dollars at the office of the trustee. At our option, however, we may make payments by check mailed to your registered address or, for global notes, by wire transfer. We will make interest payments to the person in whose name the notes is registered at the close of business on the record date for the interest payment.
The trustee is our paying agent for payments on notes. We may at any time designate additional paying agents or rescind the designation of any paying agent or approve a change in the office through which any paying agent acts.
Notices
Except as otherwise described herein, we will give notice to registered holders of the notes by mail to the addresses as they appear in the security register. Notices will be considered to have been given on the date of their mailing.
Replacement of Notes
We will replace any of your notes that become mutilated, destroyed, stolen or lost at your expense upon delivery to the trustee of your mutilated notes or evidence of the loss, theft or destruction satisfactory to us and the trustee. In the case of a lost, stolen or destroyed notes, indemnity satisfactory to the trustee and us may be required at your expense before a replacement note will be issued.
Book-Entry System
The notes will be represented by global securities. Each global security will be deposited with, or on behalf of, DTC and be registered in the name of a nominee of DTC. Except under circumstances described below, the notes will not be issued in definitive form.
Upon the issuance of a global security, DTC will credit on its book-entry registration and transfer system the accounts of persons designated by the underwriter with the respective principal amounts of the notes represented by the global security. Ownership of beneficial interests in a global security will be limited to persons that have accounts with DTC or its nominee, otherwise known as participants, or persons that may hold interests through participants. Ownership of beneficial interests in a global security will be shown on, and the transfer of that ownership will be effected only through, records maintained by DTC or its nominee (with respect to interests of persons other than participants). The laws of some states require that some purchasers of securities take physical delivery of the securities in definitive form. Those limits and laws may impair the ability to transfer beneficial interests in a global security.
So long as DTC or its nominee is the registered owner of a global security, DTC or its nominee, as the case may be, will be considered the sole owner or holder of notes represented by that global security for all purposes under the indenture. Except as provided below, owners of beneficial interests in a global security will not be entitled to have notes represented by that global security registered in their names, will not receive or be entitled to receive physical delivery of notes in definitive form and will not be considered the owners or holders of the notes under the indenture. Principal and interest payments, if any, on notes registered in the name of DTC or its nominee will be made to DTC or its nominee, as the case may be, as the registered owner of the relevant global security. Neither we, Verizon Communications, the trustee, any paying agent nor the registrar for the notes will have any responsibility or liability for any aspect of the records relating to the payments made on account of beneficial interests in a global security or for maintaining, supervising or reviewing any records relating to the beneficial interests.
We expect that DTC or its nominee, upon receipt of any payment of principal or interest, if any, will credit immediately participants' accounts with payments in amounts proportionate to their respective beneficial interests in
interest in the principal amount of the relevant global security as shown on the records of DTC or its nominee. We also expect that payments by participants to owners of beneficial interests in a global security held through these participants will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of the participants.
If DTC is at any time unwilling or unable to continue as a depositary and a successor depositary is not appointed by us within 90 days, we will issue notes in definitive form in exchange for the entire global security for the notes. In addition, we may at any time and in our sole discretion determine not to have notes represented by a global security and, in that event, will issue notes in definitive form in exchange for the entire global security relating to the notes. In that instance, an owner of a beneficial interest in a global security will be entitled to physical delivery in definitive form of notes represented by the global security equal in principal amount to the beneficial interest and to have the notes registered in its name. Notes so issued in definitive form will be issued as registered notes in denominations of $1,000 and multiples of $1,000, unless otherwise specified by us.
DESCRIPTION OF VERIZON COMMUNICATIONS COMMON STOCK
Authorized Capital Stock
Verizon Communications' certificate of incorporation provides authority to issue up to 4,500,000,000 shares of stock of all classes, of which 4,250,000,000 are shares of common stock, $0.10 par value per share, and 250,000,000 are shares of series preferred stock, $0.10 par value per share.
Common Stock
Subject to any preferential rights of the series preferred stock, holders of shares of common stock of Verizon Communications are entitled to receive dividends on that stock out of assets legally available for distribution when, as and if authorized and declared by the board of directors and to share ratably in the assets of Verizon Communications legally available for distribution to its shareholders in the event of its liquidation, dissolution or winding-up. Verizon Communications may pay any dividend or make any distribution of assets on shares of common stock until cumulative dividends on shares of series preferred stock then outstanding, if any, having dividend or distribution rights senior to the common stock have been paid.
Holders of common stock are entitled to one vote per share on all matters voted on generally by the shareholders, including the election of directors. In addition, the holders of common stock possess all voting power except as otherwise required by law or except as provided for any series of series preferred stock. Verizon Communications' certificate of incorporation does not provide for cumulative voting for the election of directors.
Series Preferred Stock
Verizon Communications' board of directors is authorized at any time to provide for the issuance of all or any shares of the series preferred stock in one or more classes or series, and to fix for each class or series voting powers, full or limited, or no voting powers, and distinctive designations, preferences and relative, participating, optional or other special rights and any qualifications, limitations or restrictions, as shall be stated and expressed in the resolution or resolutions adopted by the board of directors providing for the issuance of the class or series and to the fullest extent as may be permitted by Delaware law. This authority includes, but is not limited to, the authority to provide that any class or series be:
. subject to redemption at a specified time or times and at a specified price or prices;
. entitled to receive dividends (which may be cumulative or non- cumulative) at rates, on conditions, and at times, and payable in preference to, or in relation to, the dividends payable on any other class or classes or any other series;
. entitled to rights upon the dissolution of, or upon any distribution of the assets of, Verizon Communications; or
. convertible into, or exchangeable for, shares of any class or classes of stock, or other securities or property, of Verizon Communications at a specified price or prices or at specified rates of exchange and with any adjustments; all as the board of directors determines by resolution.
As of the date of this prospectus, no shares of preferred stock are outstanding.
Preemptive Rights
No holder of any shares of any class of stock of Verizon Communications has any preemptive or preferential right to acquire or subscribe for any unissued shares of any class of stock or any authorized securities convertible into or carrying any right, option or warrant to subscribe for or acquire shares of any class of stock.
Transfer Agent and Registrar
The principal transfer agent and registrar for the common stock of Verizon Communications is Fleet National Bank.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
This discussion describes the material United States federal income tax consequences to you of owning the notes and has been reviewed by Weil, Gotshal & Manges LLP, special tax counsel to Verizon Communications. It applies to you only if you hold your notes as capital assets for United States federal income tax purposes. This section does not apply to you if you are a member of a class of holders subject to special rules, such as:
. a dealer in securities or currencies,
. a trader in securities that elects to use a mark-to-market method of accounting for your securities holdings,
. a bank, an insurance company or other financial institution,
. a tax-exempt organization,
. a person treated as a partnership for United States federal income tax purposes or a partner thereof,
. a person that owns notes that are a hedge or that are hedged against interest rate risks,
. a person that owns notes as part of a straddle, conversion or other risk reduction transaction for United States federal income tax purposes, or
. a person whose functional currency for United States federal income tax purposes is not the U.S. dollar.
The summary below does not address all of the tax consequences that may be relevant to you. In particular, it does not address:
. the U.S. federal estate, gift or alternative minimum tax consequences of the purchase, ownership or disposition of the notes,
. state, local or foreign tax consequences of the purchase, ownership or disposition of the notes, or
. federal, state, local or foreign tax consequences of owning or disposing of the common stock of Verizon Communications.
This discussion is based on the Internal Revenue Code of 1986, as amended, the Treasury Regulations promulgated under the Internal Revenue Code of 1986 and administrative and judicial interpretation of the Internal Revenue Code of 1986 and the Treasury Regulations, all as of the date of this prospectus, and all of which are subject to differing interpretations and to change, possibly on a retroactive basis.
No statutory, administrative or judicial authority directly addresses the treatment of the notes or instruments similar to the notes for United States federal income tax purposes. No rulings have been sought or are expected to be sought from the Internal Revenue Service, commonly known as the IRS, with respect to any of the United States federal income tax consequences discussed below, and no assurance can be given that the IRS will not take contrary positions. As a result, no assurance can be given that the IRS will agree with the tax characterizations and the tax consequences described below.
We urge you to consult your tax advisors with respect to the tax consequences to you of the purchase, ownership and disposition of the notes and shares of the common stock of Verizon Communications in light of your own particular circumstances, including the tax consequences under state, local, foreign and other tax laws and the possible effects of changes in United States federal or other tax laws.
Classification of the Notes
Pursuant to the terms of the indenture, you agree, for United States federal income tax purposes, to treat your notes as indebtedness for United States federal income tax purposes subject to the regulations governing contingent payment debt instruments and to be bound by our application of those regulations to the notes, including our determination of the rate at which interest will be deemed to accrue on the notes for United States federal income tax purposes. The remainder of this discussion assumes that the notes will be treated in accordance with that agreement and our determinations. However, there is some uncertainty as to the proper application of the Treasury Regulations governing contingent payment debt instruments to you, and no assurance can be given that the IRS will not assert that the notes should be treated differently or that such an assertion would not prevail. Such treatment could affect the amount, timing and character of income, gain or loss in respect of an investment in the notes. In particular, it might be determined that you should have accrued interest income at a lower rate, should not have recognized ordinary income upon the conversion, and should have recognized capital gain or loss upon a taxable disposition of its notes.
U.S. Holders of Notes
This discussion applies to U.S. holders of notes.
You are a U.S. holder of notes if you are a beneficial owner of a note and you are, for United States federal income tax purposes:
. a citizen or resident of the United States,
. a domestic corporation,
. an estate whose income is subject to United States federal income tax regardless of its source, or
. a trust if a United States court can exercise primary supervision over the trust's administration and one or more United States persons are authorized to control all substantial decisions of the trust.
You are a non-U.S. holder of notes, and should see "Treatment of Non-U.S. Holders of Notes" below, if you are a beneficial owner of a note and you are, for United States federal income tax purposes:
. a nonresident alien individual (other than an expatriate),
. a foreign corporation, or
. a foreign estate or trust that is not subject to United States federal income taxation on its worldwide income.
Accrual of Interest on the Notes
Under the rules governing contingent payment debt obligations, a U.S. holder of notes generally will be required to accrue interest income on the notes, in the amounts described below, regardless of whether the U.S. holder of notes uses the cash or accrual method of tax accounting. Accordingly, U.S. holders of notes will likely be required to include interest in taxable income in each year in excess of the stated yield to maturity of the notes and in excess of any contingent interest payments actually received in that year.
A U.S. holder of notes must accrue an amount of original issue discount as ordinary income for United States federal income tax purposes, for each accrual period prior to and including the maturity date of the notes that equals:
. the product of (i) the adjusted issue price (as defined below) of the notes as of the beginning of the accrual period, and (ii) the comparable yield (as defined below) of the notes, adjusted for the length of the accrual period;
. divided by the number of days in the accrual period; and
. multiplied by the number of days during the accrual period that the U.S. holder of notes held the notes.
The issue price of a note is the first price at which a substantial amount of the notes was sold to the public, excluding bond houses, brokers or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers. The adjusted issue price of a note is its issue price increased by any interest income previously accrued, determined without regard to any adjustments to interest accruals described below, and decreased by the amount of any projected payments actually made with respect to the notes.
Under the rules governing contingent payment debt obligations, we were required to establish the "comparable yield" for the notes. We determined that the comparable yield for the notes is the annual yield we would incur, as of the initial issue date, on a fixed rate nonconvertible debt security with no contingent payments, but with terms and conditions otherwise comparable to those of the notes including the rank, term and general market conditions, but excluding any adjustments for liquidity or the riskiness of the contingencies with respect to the notes. Accordingly, we determined the comparable yield to be 7.51% compounded semi-annually.
We are required to provide to U.S. holders of notes, solely for United Stated federal income tax purposes, a schedule of the projected amounts of payments on the notes. This schedule must produce the comparable yield. Our determination of the projected payment schedule for the notes includes estimates for payments of contingent interest and an estimate for a payment at maturity taking into account the conversion feature. U.S. holders of notes may obtain the projected payment schedule by submitting a written request for it to Verizon Communications at the address set forth in "Where You Can Find More Information".
THE COMPARABLE YIELD AND THE SCHEDULE OF PROJECTED PAYMENTS ARE NOT DETERMINED FOR ANY PURPOSE OTHER THAN FOR THE DETERMINATION OF INTEREST ACCRUALS AND ADJUSTMENTS THEREOF IN RESPECT OF THE NOTES OF A U.S. HOLDER OF NOTES FOR UNITED STATES FEDERAL INCOME TAX PURPOSES AND DO NOT CONSTITUTE A PROJECTION OR REPRESENTATION REGARDING THE ACTUAL AMOUNTS PAYABLE TO U.S. HOLDERS OF NOTES.
Adjustments to Interest Accruals on the Notes
If a U.S. holder of notes receives actual payments with respect to the notes in a taxable year that in the aggregate exceed the total amount of projected payments for that taxable year, the U.S. holder of notes would incur a "net positive adjustment" equal to the amount of such excess. The U.S. holder of notes would treat the "net positive adjustment" as additional interest income for the taxable year. For this purpose, the payments in a taxable year include the fair market value of property received in that year.
If a U.S. holder of notes receives actual payments with respect to the notes in a taxable year that in the aggregate are less than the amount of the projected payments for that taxable year, the U.S. holder of notes would incur a "net negative adjustment" equal to the amount of such deficit. This adjustment would (a) reduce the interest income on the notes of the U.S. holder of notes for that taxable year, and (b) to the extent of any excess after the application of (a), give rise to an ordinary loss to the extent of the interest income on the notes of the U.S. holder of notes during prior taxable years, reduced to the extent such interest was offset by prior net negative adjustments.
Discount or Premium
A U.S. holder of notes that acquires a note after its initial issuance is required to accrue original issue discount for United States federal income tax purposes based upon the original projected payment schedule as if the note had been acquired directly from us. However, except to the extent described in the third paragraph below as to notes that are deemed to be "exchange listed", a U.S. holder of notes must allocate any difference between the holder's cost basis and the then adjusted issue price of the note to the projected payments over the remaining term of the note on some reasonable basis, taking into account then applicable interest rates and changes in the projected value of the common stock of Verizon Communications. Such allocation is not done on a daily basis, as generally would be the case, at least for premium, on non-contingent original issue discount obligations.
Thus, if a U.S. holder of notes acquired a note after its initial issuance at an amount that was less than the note's then adjusted issue price, a U.S. holder of notes would be required to allocate the "discount" among the projected payments to be made on the note. The portion of the discount allocated to a projected payment would be treated as a positive adjustment on the date the projected payment was scheduled to be made. Likewise, a U.S. holder's adjusted basis in the note would be increased by the amount of the positive adjustment.
On the other hand, if a U.S. holder of notes acquired a note after its initial issuance at an amount that exceeded the note's then adjusted issue price, the amount of the "premium" allocated to a projected payment is treated as a negative adjustment on the date the payment was scheduled to be made and, correspondingly, a U.S holder's adjusted basis in the note is reduced by the amount of the negative adjustment.
Finally, if the note at the time of a U.S. holder's acquisition is deemed to be "exchange listed property" then, instead of allocating the discount or premium to projected payments, a U.S. holder of notes generally would be permitted, but not required, unless any other method was unreasonable, to allocate the discount or premium pro-rata to the accrual of original issue discount. Notes will be considered exchange listed if they are listed on either a national securities exchange or an interdealer quotation system sponsored by a national securities association.
Sale, Exchange, Conversion or Redemption
Generally, the sale or exchange of a note, or the redemption of a note for cash, will result in taxable gain or loss to a U.S. holder of notes. In addition, as described above, our calculation of the comparable yield and the schedule of projected payments for the notes includes the receipt of stock upon conversion of a note into the common stock of Verizon Communications as a contingent payment with respect to the notes. Accordingly, we intend to treat the receipt of the common stock of Verizon Communications by a U.S. holder of notes upon the conversion of a note, or upon the redemption of a note where we elect to pay in the common stock of Verizon Communications, as a contingent payment. As described above, you are generally bound by our determination of the comparable yield and the schedule of projected payments. Under this treatment, a sale or exchange, or such a conversion or redemption, also will result in taxable gain or loss to the U.S. holder of notes. The amount of gain or loss on a taxable sale, exchange, conversion or redemption will equal the difference between (a) the amount of cash plus the fair market value of any other property received by the U.S. holder of notes, including the fair market value of the common stock of Verizon Communications received, and (b) the adjusted tax basis in the notes of the U.S. holder of notes. The adjusted tax basis in a note of a U.S. holder of notes generally will equal the original purchase price for the note of the U.S. holder of notes, increased by any original issue discount previously accrued by the U.S. holder of notes (determined without regard to any positive or negative adjustments to interest accruals described above), and decreased by the amount of any projected payments actually made on the note. Gain recognized upon a sale, exchange, conversion or redemption of a note generally will be treated as ordinary interest income; any loss will be ordinary loss to the extent of interest previously included in income and, thereafter, capital loss (which will be long-term if the note is held for more than one year). The deductibility of net capital losses is subject to limitations.
The tax basis of a U.S. holder of notes in the common stock of Verizon Communications received upon a conversion of a note or upon your exercise of a right to require us to purchase your notes that we elect to pay in the common stock of Verizon Communications will equal the then current fair market value of the common stock of Verizon Communications. The holding period of the U.S. holder of notes for such common stock received will commence on the day after the date of conversion or redemption.
Constructive Dividends
If at any time Verizon Communications makes a distribution of property to its stockholders that would be taxable to the stockholders as a dividend for United States federal income tax purposes and, in accordance with the anti- dilution provisions of the notes, the conversion rate of the notes is increased, such increase may be deemed to be the payment of a taxable dividend to you.
Treatment of Non-U.S. Holders of Notes
The rules governing United States federal income taxation of non-U.S. holders of notes are complex and no attempt will be made in this prospectus to provide more than a summary of such rules. We urge non-U.S. holders of notes to consult with their tax advisors to determine the effect of United States federal, state, local and foreign income tax laws, as well as treaties, with regard to an investment in the notes and the common stock of Verizon Communications, including any reporting requirements.
Payments Made With Respect to the Notes
The 30% United States federal withholding tax will not apply to any payment to a non-U.S. holder of notes of principal or interest (including amounts taken into income as interest under the accrual rules described above under "--U.S.
Holders of Notes" and amounts attributable to the common stock of Verizon Communications received upon a conversion of the notes) on, or of any gain realized on a sale or exchange of notes, provided that: (i) the non-U.S. holder of notes does not own, actually or constructively, 10% or more of the total combined voting power of all classes of stock of Verizon Communications entitled to vote, (ii) the non-U.S. holder of notes is not a controlled foreign corporation related, directly, indirectly or constructively, to us through stock ownership; (iii) the non-U.S. holder of notes is not a bank which acquired the notes in consideration for an extension of credit made pursuant to a loan agreement entered into in the ordinary course of business; (iv) the common stock of Verizon Communications continues to be actively traded within the meaning of Section 871(h)(4)(C)(v)(l) of the Internal Revenue Code; and (v) either (a) the beneficial owner of notes certifies to us or its paying agent on IRS Form W-8BEN, under penalties or perjury, that it is not a United States person and provides its name, address and certain other information or (b) the beneficial owner holds its notes through certain foreign intermediaries or certain foreign partnerships and such holder of notes satisfies certain certification requirements.
If the non-U.S. holder of notes cannot satisfy the requirements described above, payments of interest (including amounts taken into income under the accrual rules described above under "-U.S. Holders of Notes" and amounts attributable to the common stock of Verizon Communications received upon a conversion of the notes) will be subject to the 30% United States federal withholding tax unless the non-U.S. holder of notes provides us with a properly executed (1) IRS Form W-8BEN (or successor form) claiming an exemption from or reduction in withholding under an applicable tax treaty or (2) IRS Form W-8ECI (or successor form) stating that interest paid on the notes is not subject to withholding tax because it is effectively connected with the conduct of a trade or business by the non-U.S. holder of notes in the United States.
If a non-U.S. holder of notes is engaged in a trade or business in the United States, and if interest on the notes is effectively connected with the conduct of such trade or business, the non-U.S. holder of notes, although exempt from the withholding tax discussed in the preceding paragraphs, will generally be subject to regular United States federal income tax on interest and on any gain realized on the sale or exchange of the notes in the same manner as if it were a U.S. holder of notes. Such a non-U.S. holder of notes will be required to provide to the withholding agent a properly executed IRS Form W-8ECI (or successor form) in order to claim an exemption from withholding tax. In addition, if such a non-U.S. holder of notes is a foreign corporation, such non-U.S. holder of notes may be subject to a branch profits tax equal to 30% (or such lower tax rate provided by an applicable treaty) of its effectively connected earnings and profits for the taxable year, subject to certain adjustments.
Back-Up Withholding and Information Reporting
U.S. Holders of Notes
Payments of interest (including original issue discount) on the notes, or dividends made by Verizon Communications on its common stock, or the proceeds of the sale or other disposition of the notes (including upon maturity or conversion) or shares of the common stock of Verizon Communications, may be subject to information reporting and United States federal backup withholding tax if the recipient of such payment fails to supply an accurate taxpayer identification number or otherwise fails to comply with applicable United States information reporting or certification requirements. Any amount withheld from a payment to a U.S. holder of notes under the backup withholding rules is allowable as a credit against the holder's United States federal income tax, provided that the required information is furnished to the IRS.
Non-exempt U.S. holders of notes may be subject to information reporting with respect to certain reportable payments, including payments of principal and interest on the notes and the proceeds of the sale or other disposition of the notes. we will report to the U.S. holders of notes and to the IRS the amount of any reportable payments for each calendar year.
Non-U.S. Holders of Notes
A non-U.S. holder of notes may be required to comply with certification procedures to establish that the holder is not a U.S. person in order to avoid backup withholding tax requirements with respect to our payments of principal and interest, including cash payments in respect of original issue discount on the notes, or the proceeds of the sale or other disposition of the notes.
Tax Event
The modification of the terms of the notes by us upon a tax event could possibly alter the timing of income recognition by you with respect to the payments of interest due after any such modification occurs.
THE PROPER TAX TREATMENT OF A HOLDER OF NOTES IS UNCERTAIN. AS A RESULT, YOU ARE URGED TO CONSULT YOUR TAX ADVISORS REGARDING THE UNITED STATES FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF AN INVESTMENT IN THE NOTES AND WHETHER AN INVESTMENT IN THE NOTES IS ADVISABLE IN LIGHT OF THE AGREED UPON TAX TREATMENT AND YOUR PARTICULAR TAX SITUATION.
SELLING SECURITYHOLDERS
The notes were originally issued by us, supported as to payment of principal and interest by Verizon Communications and sold by Goldman, Sachs & Co. and Credit Suisse First Boston Corporation, the "initial purchasers", in a transaction exempt from the registration requirements of the Securities Act to persons reasonably believed by the initial purchasers to be "qualified institutional buyers" as defined by Rule 144A under the Securities Act. The selling securityholders may from time to time offer and sell pursuant to this prospectus any or all of the notes listed below and the common stock of Verizon Communications issued upon purchase by us or conversion, of the notes. When we refer to the "selling securityholders" in this prospectus, we mean those persons listed in the table below or in any prospectus supplement, as well as the pledgees, donees, assignees, transferees, successors and others who later hold any of the selling securityholders' interests.
The table below sets forth the name of each selling securityholder, the principal amount at maturity of notes that each selling securityholder may offer pursuant to this prospectus and the number of shares of the common stock of Verizon Communications into which the notes are convertible. Unless set forth below, none of the selling securityholders has, or within the past three years has had, any material relationship with us or any of our predecessors or affiliates.
We have prepared the table below based on information given to us by the selling securityholders on or prior to August 9, 2001. However, any or all of the notes or the common stock of Verizon Communications listed below may be offered for sale pursuant to this prospectus by the selling securityholders from time to time. Accordingly, no estimate can be given as to the amounts of notes or the common stock of Verizon Communications that will be held by the selling securityholders upon consummation of any sales. In addition, the selling securityholders listed in the table below may have acquired, sold or transferred, in transactions exempt from the registration requirements of the Securities Act, some or all of their notes since the date as of which the information in the table is presented.
Information about the selling securityholders may change over time. Any changed information will be set forth in prospectus supplements. From time to time, additional information concerning ownership of the notes and the common stock of Verizon Communications may rest with holders of notes or the common stock of Verizon Communications not named in the table below and of whom we are unaware.
Shares of
Verizon Percentage of
Aggregate Principal Communications Verizon
Amount at Maturity Percentage Common Communications
of Notes that May of Notes Stock that May Common Stock
Name be Sold Outstanding be Sold(1) Outstanding(2)
---- ------------------- ----------- -------------- --------------
AIG SoundShore Holdings Ltd. $ 11,004,000 * 87,281 *
AIG SoundShore Opportunity Holding Fund Ltd............... 13,836,000 * 109,744 *
AIG SoundShore Strategic Holding Fund Ltd................. 8,910,000 * 70,672 *
Alpha U.S. Sub Fund VIII, LLC............................. 4,300,000 * 34,106 *
Aristeia International Limited............................ 47,200,000 * 374,380 *
Aristeia Partners, L.P.................................... 17,800,000 * 141,186 *
Bank of America NA........................................ 144,500,000 2.7 1,445,645 *
Bear Stearns & Co. Inc.................................... 54,000,000 1.0 428,317 *
Black Diamond Capital 1, Ltd.............................. 500,000 * 3,965 *
Black Diamond Offshore Ltd................................ 1,627,000 * 12,905 *
Blue Cross Blue Shield of Florida......................... 9,300,000 * 73,765 *
CapitalCare, Inc.......................................... 175,000 * 1,388 *
CareFirst of Maryland, Inc................................ 500,000 * 3,965 *
CF FX, LLC................................................ 30,000,000 * 237,954 *
City of Birmingham Retirement & Relief System............. 1,500,000 * 11,897 *
Chrysler Corporation Master Retirement Trust.............. 11,835,000 * 93,872 *
Deephaven Domestic Convertible Trading Ltd................ 148,700,000 2.7 1,179,458 *
Delta Air Lines Master Trust.............................. 3,090,000 * 24,509 *
Delta Pilots D & S Trust.................................. 1,605,000 * 12,730 *
Double Black Diamond Offshore LDC......................... 7,498,000 * 59,472 *
First Union National Bank................................. 208,000,000 3.8 1,649,814 *
FreeState Health Plan, Inc................................ 125,000 * 991 *
Gaia Offshore Master Fund Ltd............................. 19,000,000 * 150,704 *
GLG Market Neutral Fund................................... 500,000 * 3,965 *
Goldman Sachs and Company................................. 60,000,000 1.1 475,908 *
Granville Capital Corporation............................. 10,500,000 * 83,283 *
Group Hospitalization and Medical Services, Inc........... 525,000 * 4,164 *
Jackson County Employees' Retirement System............... 275,000 * 2,181 *
JMG Triton Offshore FD LTD................................ 13,750,000 * 109,062 *
Knight Securities LP...................................... 15,000,000 * 118,977 *
LibertyView Funds L.P..................................... 4,500,000 * 35,693 *
LibertyView Fund LLC...................................... 1,000,000 * 7,931 *
LibertyView Global Volatility Fund L.P.................... 4,500,000 * 35,693 *
Lincoln National Convertible Securities Fund.............. 4,500,000 * 35,693 *
Lydian Overseas Partners Master Fund...................... 28,000,000 * 222,090 *
Lyxor Master Fund......................................... 4,000,000 * 31,727 *
Motion Picture Industry Health Plan - Active Member Fund.. 1,090,000 * 8,645 *
Motion Picture Industry Health Plan - Retiree Member Fund. 465,000 * 3,688 *
Partner Reinsurance Company............................... 1,830,000 * 14,515 *
Physicians' Reciprocal Insurers Account #7................ 2,500,000 * 19,829 *
Pilgrim Convertible Fund.................................. 3,500,000 * 27,761 *
RAM Trading Ltd........................................... 20,000,000 * 158,636 *
SAM Investments LDC....................................... 100,000,000 1.8 793,180 *
Salomon Smith Barney Inc.................................. 34,950,000 * 277,216 *
State Employees' Retirement Fund of the State of Delaware. 4,695,000 * 37,239 *
State of Connecticut Combined Investment Funds............ 10,040,000 * 79,635 *
State of Florida, Office of the Treasurer................. 3,300,000 * 26,174 *
TD Securities (USA) Inc................................... 98,000,000 1.8 777,316 *
Teachers Insurance and Annuity Association................ 20,000,000 * 158,636 *
UBS AG London Branch...................................... 735,665,000 13.5 5,835,147 *
UBS Warburg LLC........................................... 2,256,000 * 1,165,551 *
White River Securities L.L.C.............................. 54,000,000 1.0 428,317 *
Worldwide Transactions Ltd................................ 4,435,000 * 35,177 *
All other holders of notes or future transferees,
pledgees, donees, assignees or successors of any
of those holders (3),(4).................................. 3,453,298,000 63.5 27,390,869 1.0
--------------- ------ ---------- ----
Total....................................................$ 5,442,079,000 100.0% 43,165,482 1.6%
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(3) Information about other selling securityholders will be set forth in
prospectus supplements, if required.
(4) Assumes that any other selling securityholders, or any future pledgees,
donees, assignees, transferees or successors of or from any other
selling securityholders, do not beneficially own any common stock of
Verizon Communications other than the common stock of Verizon
Communications issuable upon conversion of the notes at the initial
conversion rate.
PLAN OF DISTRIBUTION
We and Verizon Communications are registering the notes and the common stock of Verizon Communications covered by this prospectus to permit the selling securityholders to conduct public secondary trading of these securities from time to time after the date of this prospectus. We have agreed, among other things, to bear all expenses, other than underwriting discounts and selling commissions, in connection with the registration and sale of the notes and the common stock of Verizon Communications covered by this prospectus.
Neither we nor Verizon Communications will receive any of the proceeds from the offering of notes or the common stock of Verizon Communications by the selling securityholders. We have been advised by the selling securityholders that the selling securityholders may sell all or a portion of the notes and the common stock of Verizon Communications beneficially owned by them and offered hereby from time to time:
. directly; or
. through underwriters, broker-dealers or agents, who may receive compensation in the form of discounts, commissions or concessions from the selling securityholders or from the purchasers of the notes and the common stock of Verizon Communications for whom they may act as agent.
The notes and the common stock of Verizon Communications may be sold from time to time in one or more transactions at:
. fixed prices, which may be changed;
. prevailing market prices at the time of sale;
. prices related the prevailing market prices;
. varying prices determined at the time of sale; or
. negotiated prices.
These prices will be determined by the holders of the securities or by agreement between these holders and underwriters or dealers who may receive fees or commissions in connection with the sale. The aggregate proceeds to the selling securityholders from the sale of the notes or the common stock of Verizon Communications offered by them hereby will be the purchase price of the notes or the common stock of Verizon Communications less discounts and commissions, if any.
The sales described in the preceding paragraph may be effected in transactions:
. on any national securities exchange or quotation service on which the notes and the common stock of Verizon Communications may be listed or quoted at the time of sale, including the New York, Philadelphia, Boston, Chicago and Pacific Stock Exchanges in the case of the common stock of Verizon Communications;
. in the over-the-counter market;
. in transactions otherwise than on those exchanges or services or in the over-the-counter market; or
. through the writing of options.
These transactions may include block transactions or crosses. Crosses are transactions in which the same broker acts as an agent on both sides of the trade.
In connection with sales of the notes and the common stock of Verizon Communications or otherwise, the selling securityholders may enter into hedging transactions with broker-dealers. These broker-dealers may in turn engage in short sales of the notes and the common stock of Verizon Communications in the course of hedging their positions. The selling securityholders may also sell the notes and the common stock of Verizon Communications short and deliver notes and the common stock of Verizon Communications to close out short positions, or loan or pledge notes and the common stock of Verizon Communications to broker-dealers that in turn may sell the notes and the common stock of Verizon Communications.
To our knowledge, there are currently no plans, arrangements or understandings between any selling securityholders and any underwriter, broker- dealer or agent regarding the sale of the notes and the common stock of Verizon Communications by the selling securityholders. Selling securityholders may sell any, or may sell all, of the notes and the common stock of Verizon Communications offered by them pursuant to this prospectus. In addition, we cannot assure you that a selling securityholder will not transfer, devise or gift the notes and the common stock of Verizon Communications by other means not described in this prospectus. In addition, any securities covered by this prospectus which qualify for sale pursuant to Rule 144 or Rule 144A of the Securities Act may be sold under Rule 144 or Rule 144A rather than pursuant to this prospectus.
The outstanding shares of the common stock of Verizon Communications are listed for trading on the New York, Philadelphia, Boston, Chicago and Pacific Stock Exchanges.
The selling securityholders and any broker and any broker-dealers, agents or underwriters that participate with the selling securityholders in the distribution of the notes or the common stock of Verizon Communications may be considered to be "underwriters" within the meaning of the Securities Act. In this case, any commissions received by these broker-dealers, agents or underwriters and any profit on the resale of the notes or the common stock of Verizon Communications purchased by them may be considered to be underwriting commissions or discounts under the Securities Act. In addition, any profits realized by the selling securityholders may be considered to be underwriting commissions.
The notes were issued and sold in May 2001 in transactions exempt from the registration requirements of the Securities Act to persons reasonably believed by the initial purchasers to be "qualified institutional buyers," as defined in Rule 144A under the Securities Act. We have agreed to indemnify the initial purchasers and each selling securityholder, and each selling securityholder has agreed to indemnify us, the initial purchasers and each other selling securityholder, against specified liabilities arising under the Securities Act.
The selling securityholders and any other person participating in a distribution of the notes or the common stock of Verizon Communications will be subject to the Exchange Act. The Exchange Act rules include, without limitation, Regulation M, which may limit the timing of purchases and sales of any of the notes and the underlying common stock of Verizon Communications by the selling securityholders and any other person participating in the distribution. In addition, Regulation M of the Exchange Act may restrict the ability of any person engaged in the distribution of the notes and the underlying common stock of Verizon Communications to engage in market-making activities relating to the particular notes and the underlying common stock of Verizon Communications being distributed for a period of up to five business days prior to the commencement of the distribution. This may affect the marketability of the notes and the underlying common stock of Verizon Communications and the ability of any person or entity to engage in market- making activities relating to the notes and the underlying common stock of Verizon Communications.
We will use our reasonable efforts to keep the registration statement of which this prospectus is a part effective until the earlier of:
. the sale, pursuant to the registration statement to which this prospectus relates, of all the securities registered under the registration statement;
. the expiration of the holding period applicable to the securities held by persons that are not our affiliates under Rule 144(k) under the Securities Act or any successor provision; and
. sale to the public under Rule 144 of all the securities registered under the registration statement.
Our obligation to keep the registration statement to which this prospectus relates effective is subject to specified, permitted exceptions. In these cases, we may prohibit offers and sales of notes and the common stock of Verizon Communications pursuant to the registration statement to which this prospectus relates.
LEGAL MATTERS
The validity of the notes, the common stock of Verizon Communications, the support agreement and the share contribution agreement have been passed upon for us and Verizon Communications by William P. Barr, Executive Vice President and General Counsel of Verizon Communications. As of April 30, 2001, Mr. Barr beneficially owned approximately 11,825 shares of Verizon Communications common stock and had options to purchase an aggregate of 994,800 shares of Verizon Communications common stock. Certain tax matters for the notes have been passed upon for Verizon Communications by Weil, Gotshal & Manges LLP, New York, New York, special tax counsel to us and Verizon Communications.
EXPERTS
The consolidated financial statements and financial statement schedule of Verizon Communications Inc. as of December 31, 2000 and for the year then ended, included in Verizon Communications' Annual Report on Form 10-K filed on March 23, 2001, and incorporated by reference in this prospectus, have been audited by Ernst & Young LLP, independent auditors, as set forth in their report which is also included therein and incorporated by reference herein. Such consolidated financial statements are incorporated by reference herein in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
The consolidated financial statements and financial statement schedule of Verizon Communications Inc. as of December 31, 1999 and for the two years in the period ended December 31, 1999, included in Verizon Communications' Annual Report on Form 10-K filed on March 23, 2001, and incorporated by reference in this prospectus, have been audited by PricewaterhouseCoopers LLP, independent accountants, other than the financial statements of GTE Corporation (a wholly owned subsidiary of Verizon Communications) which were audited by Arthur Andersen LLP, independent public accountants, as set forth in their reports which are also included therein and incorporated by reference herein. Such consolidated financial statements are incorporated by reference herein in reliance on such reports given on the authority of such firms as experts in accounting and auditing.
$5,442,079,000
Zero-Coupon Convertible Notes due 2021
of
Verizon Global Funding Corp.
Supported as to Payment of Principal and Interest by and Convertible into the Common Stock of
Verizon Communications Inc.
[LOGO OF VERIZON]
PROSPECTUS
, 2001
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
We are paying all of the selling securityholders' expenses related to this offering, except the selling securityholders will pay any applicable broker's commissions and expenses. The following table sets forth the approximate amount of fees and expenses payable by us in connection with this registration statement and the distribution of the notes and the common stock of Verizon Communications registered hereby. All of the amounts shown are estimates except the SEC registration fee.
1. Registration fee.............................................$ 734,680
2. Trustee's fees............................................... 70,000
3. Cost of printing............................................. 25,000
4. Accounting fees.............................................. 5,000
5. Legal fees................................................... 50,000
6. Rating agency fees........................................... 100,000
7. Miscellaneous................................................ 15,320
----------
$1,000,000
==========
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ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law ("DGCL") permits a corporation to indemnify any of its directors or officers who was or is a party or is threatened to be made a party to any third party proceeding by reason of the fact that such person is or was a director or officer of the corporation, against expenses (including attorney's fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action or proceeding, if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reason to believe that such person's conduct was unlawful. In a derivative action, i.e., one by or in the right of the corporation, the corporation is permitted to indemnify directors and officers against expenses (including attorney's fees) actually and reasonably incurred by them in connection with the defense or settlement of an action or suit if they acted in good faith and in a manner that they reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made if such person shall have been adjudged liable to the corporation, unless and only to the extent that the court in which the action or suit was brought shall determine upon application that the defendant directors or officers are fairly and reasonably entitled to indemnity for such expenses despite such adjudication of liability.
Article 7 of the Verizon Communications Restated Certificate of Incorporation, and Article 8 of the Verizon Global Funding Restated Certificate of Incorporation, makes mandatory the indemnification expressly authorized under the DGCL, except that the Verizon Communications Restated Certificate of Incorporation only provides for indemnification in derivative actions, suits or proceedings initiated by a director or officer if the initiation of such action, suit or proceeding was authorized by the Board of Directors.
Pursuant to Section 7.8 of the Amended and Restated Agreement and Plan of Merger dated as of April 21, 1996 by and between NYNEX Corporation ("NYNEX") and Bell Atlantic Corporation ("Bell Atlantic"), Bell Atlantic agreed for a period of six years following the effective time of the merger to (a) cause NYNEX to maintain in effect the provisions regarding indemnification of officers and directors contained in the NYNEX Certificate of Incorporation and Bylaws and the certificates of incorporation and bylaws of each of its subsidiaries or in director, officer or employee indemnification agreements of NYNEX and its subsidiaries, (b) maintain in effect and cause NYNEX to maintain in effect current policies of directors' and officers' liability insurance and fiduciary liability insurance with respect to claims arising prior to the effective time of the merger, and (c) indemnify, and cause NYNEX to indemnify, the directors and officers of Bell Atlantic and NYNEX, respectively, to the fullest extent permitted under their respective certificates of incorporation and bylaws and applicable law. In addition, Bell Atlantic agreed to
II-1
unconditionally and irrevocably guarantee for the benefit of such directors, officers and employees the obligations of NYNEX under its indemnification arrangements.
Pursuant to Section 7.8 of the Amended and Restated Agreement and Plan of Merger dated as of July 27, 1998, by and among GTE Corporation ("GTE"), Bell Atlantic, and a wholly owned subsidiary of Bell Atlantic, Bell Atlantic agreed for a period of six years following the effective time of the merger to (a) cause GTE to maintain in effect the provisions regarding indemnification of officers and directors contained in the GTE charter and bylaws and the charters and bylaws of each of its subsidiaries or in director, officer or employee indemnification agreements of GTE and its subsidiaries, (b) maintain in effect and cause GTE to maintain in effect current policies of directors' and officers' liability insurance and fiduciary liability insurance with respect to claims arising prior to the Effective Time, and (c) indemnify, and cause GTE to indemnify, the directors and officers of Bell Atlantic and GTE, respectively, to the fullest extent permitted under their respective charters and bylaws and applicable law. In addition, Bell Atlantic agreed to unconditionally and irrevocably guarantee for the benefit of such directors, officers and employees the obligations of GTE under its indemnification arrangements.
Verizon Communications has succeeded to the obligations of Bell Atlantic described in the two immediately preceding paragraphs.
The Certificate of Incorporation of each of Verizon Communications and Verizon Global Funding limits the personal liability of directors to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director to the fullest extent permitted by the Delaware General Corporation Law.
The directors and officers of Verizon Communications and Verizon Global Funding are insured against certain liabilities, including certain liabilities, arising under the Securities Act, which might be incurred by them in such capacities and against which they cannot be indemnified by Verizon.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
See Exhibit Index on Page II-7
ITEM 17. UNDERTAKINGS
(a) The undersigned registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b), if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement; provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
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not apply if the registration statement is on Form S-3, Form S-8 or Form F-3, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrants pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.
(2) That, for the purposes of determining any liability under the Securities Act of 1933, as amended, each such post-effective amendment shall be deemed to be a new registration statement relating to the II-2 securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(b) The undersigned Registrants hereby undertake that, for purposes of determining any liability under the Securities Act of 1933, as amended, each filing of the Registrants' annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of either Registrant, pursuant to the foregoing provisions, or otherwise, the Registrants have been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act of 1933, as amended, and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrants of expenses incurred or paid by a director, officer or controlling person of either Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, such Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933, as amended, and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, Verizon Communications Inc. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of New York, State of New York, on the 13th day of August, 2001.
Verizon Communications Inc.
/s/ Frederic V. Salerno
By: _______________________________________
(Senior Executive Vice President and
Chief Financial Officer/Strategy and
Business Development)
|
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
* Director August 13, 2001
___________________________________________
James R. Barker
* Director August 13, 2001
___________________________________________
Edward H. Budd
* Director August 13, 2001
___________________________________________
Richard L. Carrion
* Director August 13, 2001
___________________________________________
Robert F. Daniell
* Director August 13, 2001
___________________________________________
Helene L. Kaplan
* Director, Chairman and August 13, 2001
___________________________________________ Co-Chief Executive
Charles R. Lee Officer (co-principal
executive officer)
* Director August 13, 2001
___________________________________________
Sandra O. Moose
* Director August 13, 2001
___________________________________________
Joseph Neubauer
* Director August 13, 2001
___________________________________________
Thomas H. O'Brien
|
II-4
Signature Title Date
--------- ----- ----
* Director August 13, 2001
___________________________________________
Russell E. Palmer
* Director August 13, 2001
___________________________________________
Hugh B. Price
* Director, President and August 13, 2001
___________________________________________ Co-Chief Executive
Ivan G. Seidenberg Officer (co-principal
executive officer)
* Director August 13, 2001
___________________________________________
Walter V. Shipley
* Director August 13, 2001
___________________________________________
John W. Snow
* Director August 13, 2001
___________________________________________
John R. Stafford
* Director August 13, 2001
___________________________________________
Robert D. Storey
* Senior Vice President and August 13, 2001
___________________________________________ Controller (principal
Lawrence R. Whitman accounting officer)
/s/ Frederic V. Salerno
*By: _______________________________________
Individually and as attorney-in-fact
(principal financial officer)
|
II-5
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, Verizon Global Funding Corp. has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Wilmington, State of Delaware, on the 13th day of August, 2001.
Verizon Global Funding Corp.
/s/ Janet M. Garrity
By: _________________________________
Janet M. Garrity
(President and Treasurer)
|
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated:
Signature Title Date
--------- ----- ----
* Chief Financial Officer August 13, 2001
___________________________________________ (principal financial
Robert S. Fitzmire officer and principal
accounting officer)
* Director, President and August 13, 2001
___________________________________________ Treasurer (principal
Janet M. Garrity executive officer)
* Director August 13, 2001
___________________________________________
William F. Heitmann
* Director August 13, 2001
___________________________________________
David S. Kauffman
|
/s/ Janet M. Garrity
*By: _________________________________
Janet M. Garrity
Individually and as attorney-in-fact
|
II-6
EXHIBIT INDEX
Exhibit
No. Description
------- ----------------------------------------------------------------------
3.1 Certificate of Incorporation of Verizon Global Funding Corp.
(previously filed as an Exhibit to Verizon Global Funding Corp.'s Form
S-4 Registration Statement filed on July 9, 2001, Registration No.
333-64792)
3.2 Restated Certificate of Incorporation of Verizon Communications Inc.,
as amended (previously filed as an Exhibit to Verizon Communication
Inc.'s Annual Report on Form 10-K for the year ended December 31, 2000)
3.3 By-laws of Verizon Global Funding Corp. (previously filed as an
Exhibit to Verizon Global Funding Corp.'s Form S-4 Registration
Statement filed on July 9, 2001, Registration No. 333-64792)
3.4 By-laws of Verizon Communications Inc. (previously filed as an Exhibit
to Verizon Communication Inc.'s Annual Report on Form 10-K for the
year ended December 31, 2000)
4.1 Indenture among Verizon Global Funding Corp., Verizon Communications
Inc. and First Union National Bank, as Trustee, dated as of December
1, 2000 (previously filed as an Exhibit to Verizon Global Funding
Corp's Form S-4 Registration Statement filed July 9, 2001,
Registration No. 333-64792)
4.2 Supplemental Indenture among Verizon Global Funding Corp., Verizon
Communications Inc. and First Union National Bank, as Trustee, dated
as of May 15, 2001, including form of Zero-Coupon Convertible Note due
2021*
4.3 Registration Rights Agreement, by and among Verizon Global Funding
Corp., Verizon Communications Inc., Goldman, Sachs & Co. and Credit
Suisse First Boston Corporation dated May 15, 2001*
4.4 Support Agreement between Verizon Communications Inc. and Verizon
Global Funding Corp., dated as of October 31, 2000*
4.5 Share Contribution Agreement between Verizon Communications Inc. and
Verizon Global Funding Corp., dated as of May 15, 2001*
5 Opinion and Consent of William P. Barr, Esq.*
12 Statement of Verizon Communications Inc. Consolidated Computation of
Ratio of Earnings to Fixed Charges (previously filed as an Exhibit to
Verizon Communication Inc.'s Annual Report on Form 10-K for the year
ended December 31, 2000 and as an Exhibit to Verizon Communication
Inc.'s Current Report on Form 8-K dated July 31, 2001)
23.1 Consent of Ernst & Young LLP*
23.2 Consent of PricewaterhouseCoopers LLP*
23.3 Consent of Arthur Andersen LLP*
23.4 Consent of William P. Barr, Esq. (contained in opinion filed as
Exhibit 5).
24.1 Powers of Attorney of Verizon Global Funding Corp.*
24.2 Powers of Attorney of Verizon Communications Inc.*
25 Statement of Eligibility of Trustee on Form T-1 (previously filed as an
Exhibit to Verizon Global Funding Corp.'s Form S-4 Registration
Statement filed on July 9, 2001, Registration No. 333-64792)
|
* Filed herewith.
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EXECUTION COPY
VERIZON GLOBAL FUNDING CORP.,
Issuer
VERIZON COMMUNICATIONS INC.,
Parent
and
FIRST UNION NATIONAL BANK,
Trustee
FIRST SUPPLEMENTAL INDENTURE
Dated as of May 15, 2001
TO
INDENTURE
FIRST SUPPLEMENTAL INDENTURE, dated as of May 15, 2001 (herein called the "Supplemental Indenture"), among VERIZON GLOBAL FUNDING CORP., a corporation duly organized and existing under the laws of Delaware and having its principal executive office at 3900 Washington Street, 2nd Floor, Wilmington, Delaware 19802 (hereinafter referred to as the "Company"), VERIZON COMMUNICATIONS INC., a corporation duly organized and existing under the laws of Delaware and having its principal executive office at 1095 Avenue of the Americas, New York, New York 10036 (hereinafter referred to as the "Parent"), and FIRST UNION NATIONAL BANK, a banking association organized and existing under the laws of the United States of America (hereinafter referred to as the "Trustee"), under the Indenture dated as of December 1, 2000, among the Company, the Parent and the Trustee (hereinafter referred to as the "Original Indenture").
RECITALS
WHEREAS, the Company has duly authorized the issuance from time to time of its securities, in one or more series, evidencing its unsecured indebtedness (the "Securities") pursuant to the Original Indenture;
WHEREAS, the Parent has entered into a Support Agreement, dated as of October 31, 2000 (the "Support Agreement"), pursuant to which the Parent has agreed with the Company, subject to the terms thereof, to assure the timely payment of principal of and interest and premium, if any, on the Securities;
WHEREAS, in accordance with Section 901 of the Original Indenture, the Company, the Parent and the Trustee may enter into supplemental indentures to the Original Indenture without the consent of the Holders of Securities to, among other things, (i) issue and establish the form and terms of any series of Securities and (ii) cure any ambiguity or correct or supplement any provision which may be defective or inconsistent with the Original Indenture, or to make such other provisions in regard to matters or questions arising under the Original Indenture as shall not be inconsistent with the provisions of the Original Indenture and not adversely affect the interests of the Holders of the Securities of any series;
WHEREAS, the Company desires to issue and establish the form and terms of a series of Securities under the Original Indenture to be designated as the "Zero- Coupon Convertible Notes due 2021" (hereinafter referred to as the "Notes") and to otherwise amend and supplement the Original Indenture in accordance with the terms thereof; and
WHEREAS, the Company and the Parent have determined that the requirements of the Original Indenture have been satisfied and have requested the Trustee to join with them in the execution and delivery of this Supplemental Indenture; all requirements necessary to make this Supplemental Indenture a valid instrument in accordance with its terms have been met; and the execution and delivery hereof have been in all respects duly authorized;
NOW, THEREFORE, for good and valuable consideration the sufficiency of which is hereby acknowledged, the Company and the Parent covenant and agree with the Trustee as follows:
ARTICLE ONE
TERMS AND ISSUANCE OF THE NOTES
SECTION 1.01. Issuance and Designation.
A series of Securities which shall be designated as the Company's "Zero- Coupon Convertible Notes due 2021" is hereby duly established and shall be executed, authenticated and delivered in accordance with the provisions of, and shall in all respects be subject to, the terms, conditions and covenants of, the Original Indenture and this Supplemental Indenture. The aggregate principal amount at maturity of the Notes which may be authenticated and delivered under this Supplemental Indenture shall not, except as permitted by the provisions of the Original Indenture, exceed $6,258,390,000, as the same may be increased from time to time in connection with an increased accretion rate pursuant to paragraph 1 of the Securities.
The Notes are "OID Securities" within the meaning of the Original Indenture. If an Event of Default with respect to the Notes occurs and is continuing, then, upon a declaration of acceleration pursuant to Section 502 of the Original Indenture, the amount of principal that shall become due and payable shall equal the Accreted Principal Amount; provided, however, that if the Company exercises its option to pay cash interest instead of accreting the principal amount of the Notes following a Tax Event, the Notes shall no longer be considered "OID Securities" within the meaning of the Original Indenture and the principal amount of the Notes, commencing on the date on which the principal of the Notes is restated in accordance with the terms of the Notes, shall equal the Restated Principal Amount.
SECTION 1.02. Form and Other Terms of Notes; Incorporation of Terms.
The Notes shall be substantially in the form attached hereto as Exhibit A. The terms of such Notes are herein incorporated by reference and form a part of this Supplemental Indenture.
ARTICLE TWO
AMENDMENTS TO TERMS OF THE ORIGINAL INDENTURE
SECTION 2.01. Certain Definitions.
(a) Section 101 of the Original Indenture is hereby amended with respect to the Notes only to add the following definitions in alphabetical order :
"Accreted Conversion Price" has the meaning specified in the Securities.
"Accreted Principal Amount" has the meaning specified in the Securities.
"Accreted Value Conversion" has the meaning specified in the Securities.
"Administrative Action" has the meaning specified in the Securities.
"Applicable Percentage" has the meaning specified in the Securities.
"Average Sale Price" has the meaning specified in Section 1407.
"Capital Stock" for any corporation means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) stock issued by that corporation.
"cash" has the meaning specified in Section 1107(b).
"Change in Control" has the meaning specified in Section 1108(a).
"Change in Control Purchase Date" has the meaning specified in Section 1108(a).
"Change in Control Purchase Notice" has the meaning specified in
Section 1108(c).
"Change in Control Purchase Price" has the meaning specified in
Section 1108(a).
"Closing Sales Price" has the meaning specified in Section 1107(d).
"Company Notice" has the meaning specified in Section 1107(e).
"Company Notice Date" has the meaning specified in Section 1107(c).
"Conversion Agent" means the office or agency where Securities may be presented for conversion, and shall initially be First Union National Bank.
"Conversion Date" has the meaning specified in Section 1402.
"Conversion Rate" has the meaning specified in Section 1401.
"Ex-Dividend Time" has the meaning specified in Section 1407.
"Extraordinary Cash Dividends" has the meaning specified in Section 1408.
"Five-Year Reset Rate" has the meaning specified in the Securities.
"Interest Payment Date" has the meaning specified in the Securities.
"Issue Price" of any Security means, in connection with the original issuance of such Security, the initial issue price at which the Security is issued as set forth on the face of the Security.
"Market Price" has the meaning specified in Section 1107(d).
"Notes" means any of the Company's Zero-Coupon Convertible Notes due 2021, as amended or supplemented from time to time, issued under this Indenture.
"NYSE" means The New York Stock Exchange, Inc.
"One-Year Reset Rate" has the meaning specified in the Securities.
"Parent Common Stock" shall mean the shares of common stock, $0.10 par value per share, of the Parent existing on the date of the issuance of the Securities or any other shares of Capital Stock of the Parent into which such common stock shall be reclassified or changed.
"Purchase Date" has the meaning specified in Section 1107(a).
"Purchase Notice" has the meaning specified in Section 1107(a).
"Purchase Price" has the meaning specified in Section 1107(a).
"quarterly conversion period" has the meaning specified in the Securities.
"Redemption Price" has the meaning specified in the Securities.
"Reset Rate" has the meaning specified in the Securities.
"Reset Rate Agent" has the meaning specified in the Securities.
"Reset Rate Determination Date" has the meaning specified in the Securities.
"Restated Principal Amount" means, if a Tax Event occurs and the Company thereafter elects to pay cash interest on the Securities, the amount equal to the Accreted Principal Amount on the date of restatement of the principal amount of the Securities in connection therewith.
"Share Contribution Agreement" means the Share Contribution Agreement dated as of the date hereof between the Parent and the Company.
"Spin-off" has the meaning specified in Section 1408.
"Subsidiary" means any person of which at least a majority of the outstanding Voting Stock shall at the time directly or indirectly be owned or controlled by the Parent or by one or more Subsidiaries or by the Parent and one or more Subsidiaries.
"Tax Event" has the meaning specified in the Securities.
"Time of Determination" has the meaning specified in Section 1407.
"trading day" means a day during which trading in securities generally occurs on the NYSE or, if the Parent Common Stock is not listed on the NYSE, on the principal other national or regional securities exchange on which the Parent Common Stock then is listed or, if the Parent Common Stock is not listed on a national or regional securities exchange, on the National Association of Securities Dealers Automated Quotation System or, if the Parent Common Stock is not quoted on the National Association of Securities Dealers Automated Quotation System, on the principal other market on which the Parent Common Stock is then traded.
"trading price" has the meaning specified in the Securities.
"Two-Year Reset Rate" has the meaning specified in the Securities.
"Voting Stock" of a person means Capital Stock of such person of the class or classes pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees of such person (irrespective of whether or not at the time Capital Stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).
(b) For all purposes of this Supplemental Indenture:
(i) capitalized terms used herein without definition shall have the meanings specified in the Original Indenture;
(ii) all references herein to Articles and Sections, unless otherwise specified, refer to the corresponding Articles and Sections of the Original Indenture;
(iii) the terms "herein", "hereof", "hereunder" and other words of similar import refer to this Supplemental Indenture; and
(iv) in the event of a conflict between any definition set forth in the Original Indenture and any definition set forth in this Supplemental Indenture, the definition set forth in this Supplemental Indenture shall control.
SECTION 2.02. Amendments.
Section 902 of the Original Indenture is hereby amended in its entirety, with respect to the Notes only, to read as follows:
SECTION 902. With Consent of Holders.
The Company, the Parent and the Trustee, with the written consent of the Holders of at least a majority in aggregate principal amount of the Securities at the time outstanding, may amend this Indenture or the Securities. However, without the consent of each Holder affected, an amendment or supplement to this Indenture or the Securities may not:
(1) reduce the principal of or premium on or change the Stated Maturity of any Security;
(2) reduce the rate of or change the time for payment of cash interest on, or reduce the accretion rate of, any Security;
(3) reduce or alter the method of computation of the Redemption Price, Purchase Price or Change in Control Purchase Price of any Security or the time when such Redemption Price, Purchase Price or
Change in Control Purchase Price is payable;
(4) make the principal of, or cash interest on, any Security payable in money or securities other than that stated in the Security or change the place of payment;
(5) make any change that would impair any of the rights granted in Section 508 in any material respect;
(6) modify any provisions of the Support Agreement or the Share Contribution Agreement, except for such modifications which do not adversely affect the interests of Holders in any material respect; or
(7) reduce the percentage of principal amount of the outstanding Securities of a series required to amend or supplement the Indenture or waive any of its provisions.
It shall not be necessary for the consent of the Holders under this
Section 902 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 902 becomes effective, the Trustee shall mail to each Holder a notice briefly describing the amendment.
SECTION 2.03. Redemption and Purchases.
Article Eleven of the Original Indenture is hereby amended in its entirety, with respect to the Notes only, to read as follows:
ARTICLE XI
REDEMPTION AND PURCHASES
SECTION 1101. Company's Right to Redeem; Notices to Trustee.
The Company, at its option, may redeem the Securities in accordance with the provisions of Paragraph 5 of the Securities. If the Company elects to redeem Securities pursuant to Paragraph 5 of the Securities, it shall notify the Trustee in writing of the Redemption Date, the principal amount of Securities to be redeemed and the Redemption Price.
The Company shall give the notice to the Trustee provided for in this
Section 1101 by a Company Order at least 35 days before the Redemption Date
(unless a shorter notice shall be satisfactory to the Trustee).
SECTION 1102. Selection of Securities to Be Redeemed.
If less than all the Securities are to be redeemed, unless the procedures of the Depositary provide otherwise, the Trustee shall select the Securities to be redeemed by lot, on a pro rata basis or by another method the Trustee considers fair and appropriate (so long as such method is not prohibited by the rules of any stock exchange on which the Securities are then listed). The Trustee shall make the selection at least 15 days but not more than 60 days before the Redemption Date from outstanding Securities not previously called for redemption. The Trustee may select for redemption portions of the principal amount at maturity of Securities that have denominations larger than $1,000.
Securities and portions of Securities that the Trustee selects shall be in principal amounts at maturity of $1,000 or an integral multiple of $1,000. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. The Trustee shall notify the Company promptly of the Securities or portions of the Securities to be redeemed.
If any Security selected for partial redemption is converted in part before termination of the conversion right with respect to the portion of the Security so selected, the converted portion of such Security shall be deemed (so far as may be) to be the portion selected for redemption. Securities which have been converted during a selection of Securities to be redeemed may be treated by the Trustee as outstanding for the purpose of such selection.
SECTION 1103. Notice of Redemption.
At least 30 days but not more than 60 days before a Redemption Date, the Company shall mail a notice of redemption by first-class mail, postage prepaid, to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the Conversion Rate;
(4) the name and address of the Paying Agent and Conversion Agent;
(5) that Securities called for redemption may be converted at any time before the close of business one Business Day prior to the Redemption Date;
(6) that Holders who want to convert their Securities must satisfy the requirements set forth in Paragraph 7 of the Securities;
(7) that Securities called for redemption must be surrendered to the Paying Agent to collect the Redemption Price;
(8) if fewer than all of the outstanding Securities are to be redeemed, the certificate numbers, if any, and principal amounts of the particular Securities to be redeemed;
(9) that, unless the Company defaults in making payment of such Redemption Price, cash interest, if any, on Securities called for redemption will cease to accrue and the Securities will not accrete in value on and after the Redemption Date; and
(10) the CUSIP number(s) of the Securities.
At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at the Company's expense, provided that the Company makes such request at least three Business Days prior to the date by which such notice of redemption must be given to Holders in accordance with this Section 1103.
SECTION 1104. Effect of Notice of Redemption.
Once notice of redemption is given, Securities called for redemption become due and payable on the Redemption Date and at the Redemption Price stated in the notice except for Securities which are converted in accordance with the terms of this Indenture. Upon surrender to the Paying Agent, such Securities shall be paid on the Redemption Date at the Redemption Price stated in the notice.
SECTION 1105. Deposit of Redemption Price.
Prior to 10:00 a.m. (New York City time), on the Redemption Date, the Company shall deposit with the Paying Agent (or if the Company or a Subsidiary or an Affiliate of either of them is the Paying Agent, shall segregate and hold in trust as provided in Section 606) money sufficient to pay the Redemption Price of all Securities to be redeemed on that date other than Securities or portions of Securities called for redemption which on or prior thereto have been delivered by the Company to the Trustee for cancellation or have been converted. The Paying Agent shall as promptly as practicable return to the Company any money not required for that purpose because of conversion of Securities pursuant to Article Fourteen. If such money is then held by the Company in trust and is not required for such purpose it shall be discharged from such trust.
SECTION 1106. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Company shall execute and the Trustee shall authenticate and deliver to the Holder a new Security in an authorized denomination equal in principal amount to the unredeemed portion of the Security surrendered.
SECTION 1107. Purchase of Securities by the Company at Option of the Holder.
(a) Securities shall be purchased by the Company pursuant to Paragraph 6 of the Securities at the option of the Holder on May 15, 2004, May 15, 2006, May 15, 2011 and May 15, 2016 (each, a "Purchase Date"), at a purchase price equal to the Accreted Principal Amount plus accrued and unpaid cash interest through the Purchase Date or, if the Company has previously exercised its option to pay cash interest instead of accreting the principal amount of the Securities following a Tax Event, at a purchase price equal to the Restated Principal Amount plus any accrued and unpaid cash interest through the Purchase Date (the "Purchase Price"). Purchases of Securities hereunder shall be made, at the option of the Holder thereof, upon:
(1) delivery to the Paying Agent by the Holder of a written notice of purchase (a "Purchase Notice") during the period beginning at any time from the opening of business on the date that is 20 Business Days prior to the relevant Purchase Date until one Business Day prior to such Purchase Date stating:
(A) if Definitive Securities have been issued, the certificate number of the Security which the Holder will deliver to be purchased or, if Definitive Securities have not been issued, such Purchase Notice must comply with appropriate Depositary procedures,
(B) the portion of the principal amount at maturity of the Security which the Holder will deliver to be purchased, which portion must be in principal amounts at maturity of $1,000 or an integral multiple thereof,
(C) that such Security shall be purchased by the Company as of the Purchase Date pursuant to the terms and conditions specified in Paragraph 6 of the Securities and in this Indenture, and
(D) in the event the Company elects, pursuant to Section 1107(b), to pay the Purchase Price in shares of Parent Common Stock, in whole or in part, but such portion of the Purchase Price is ultimately to be paid to such Holder entirely in cash because any of the conditions specified in this Indenture to payment of the Purchase Price or portion of the Purchase Price in shares of Parent Common Stock is not satisfied prior to the close of business on the last day prior to the Purchase Date, as set forth in Section 1107(d), whether such Holder elects (i) to withdraw such Purchase Notice as to some or all of the Securities to which such Purchase Notice relates (stating the principal amount and certificate numbers, if any, of the Securities as to which such withdrawal shall relate), or (ii) to receive cash in respect of the entire Purchase Price for all Securities or portions of Securities subject to the Purchase Notice to which such Purchase Notice relates; and
(2) delivery of such Security to the Paying Agent prior to, on or
after the Purchase Date (together with all necessary endorsements) at
the offices of the Paying Agent, such delivery being a condition to
receipt by the Holder of the Purchase Price therefor; provided,
however, that such Purchase Price shall be so paid pursuant to this
Section 1107 only if the Security so delivered to the Paying Agent
shall conform in all respects to the description thereof in the
related Purchase Notice, as determined by the Company.
If a Holder, in such Holder's Purchase Notice and in any written
notice of withdrawal delivered by such Holder pursuant to the terms of
Section 1109, fails to indicate such Holder's choice with respect to the
election set forth in clause (D) of Section 1107(a)(1), such Holder shall
be deemed to have elected to receive cash in respect of the entire Purchase
Price for all Securities subject to such Purchase Notice in the
circumstances set forth in such clause (D).
The Company shall purchase from the Holder thereof, pursuant to this
Section 1107, a portion of a Security, if the principal amount at maturity
of such portion is $1,000 or an integral multiple of $1,000. Provisions of
this Indenture that apply to the purchase of all of a Security also apply
to the purchase of such portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions of this Section 1107 shall be consummated by the delivery of the consideration to be received by the Holder promptly following, but in no event more than five Business Days after, the later of the Purchase Date and the time of delivery of the Security. Unless the Company defaults in making payment on Securities for which a Purchase Notice has been submitted when due, cash interest, if any, on such Securities will cease to accrue and the Securities will cease to accrete in value on the Purchase Date.
Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the Purchase Notice contemplated by this Section 1107(a) shall have the right to withdraw such Purchase Notice at any time prior to the close of business one Business Day prior to the Purchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 1109.
The Paying Agent shall promptly notify the Company of the receipt by it of any Purchase Notice or written notice of withdrawal thereof.
(b) Company's Right to Elect Manner of Payment of Purchase Price for
Payment. The Securities to be purchased on any Purchase Date pursuant to
Section 1107(a) may be paid for, in whole or in part, at the election of
the Company, in U.S. legal tender ("cash") or, subject to the conditions
set forth in Section 1107(d), shares of Parent Common Stock, or in any
combination of cash and shares of Parent Common Stock; provided that the
Company will pay cash for fractional interests in shares of Parent Common
Stock. The cash payment for fractional shares will be based on the Closing
Sales Price of the Parent Common Stock on the trading day immediately prior
to the Purchase Date. For purposes of determining the existence of
potential fractional interests, all Securities subject to purchase by the
Company held by a Holder shall be considered together (no matter how many
separate certificates are to be presented). Each Holder whose Securities are purchased pursuant to this Section 1107 shall receive the same percentage of cash or shares of Parent Common Stock in payment of the Purchase Price for such Securities, except (i) as provided in Section 1107(d) with regard to the payment of cash in lieu of fractional shares of Parent Common Stock and (ii) in the event that the Company is unable to purchase the Securities of a Holder or Holders for shares of Parent Common Stock because any necessary qualifications or registrations of the shares of Parent Common Stock under applicable federal or state securities laws cannot be obtained, the Company shall purchase the Securities of such Holder or Holders for cash. If the Company elects to pay the Purchase Price of the Securities with shares of Parent Common Stock or a combination of cash and shares of Parent Common Stock, the Company will deliver the Company Notice required by Section 1107(e) by the Company Notice Date. The Company may not change its election with respect to the consideration (or components or percentages of components thereof) to be paid once the Company has given its Company Notice to Holders, except pursuant to Section 1107(d) in the event of a failure to satisfy, prior to the close of business on the last day prior to the Purchase Date, any condition to the payment of the Purchase Price, in whole or in part, in shares of Parent Common Stock.
At least three Business Days before each Company Notice Date, the Company shall deliver an Officers' Certificate to the Trustee specifying:
(i) the manner of payment selected by the Company,
(ii) the information required by Section 1107(e) in the Company Notice,
(iii) if the Company elects to pay the Purchase Price, or a specified percentage thereof, in shares of Parent Common Stock, that the conditions to such manner of payment set forth in Section 1107(d) have been or will be complied with and
(iv) whether the Company desires the Trustee to give the Company Notice required by Section 1107(e).
(c) Purchase with Cash. At the option of the Company, the Purchase
Price of Securities in respect of which a Purchase Notice pursuant to
Section 1107(a) has been given may be paid by the Company with cash equal
to the aggregate Purchase Price of such Securities.
(d) Payment by Delivery of Shares of Parent Common Stock. At the option of the Company, the Purchase Price of Securities in respect of which a Purchase Notice pursuant to Section 1107(a) has been given, or a specified percentage thereof, may be paid by the Company by the delivery of a number of shares of Parent Common Stock equal to the quotient obtained by dividing (i) the portion of the Purchase Price to be paid in shares of Parent Common Stock by (ii) the Market Price of one share of Parent Common Stock as determined by the Company in the Company Notice; provided that the
Company will pay cash for fractional shares of Parent Common Stock as provided in Section 1107(b).
If the Company elects to purchase the Securities by the issuance of shares of Parent Common Stock, the Company Notice, as provided in Section 1107(e), shall be sent to the Holders (and to beneficial owners as required by applicable law) not later than the Company Notice Date.
The Company's right to exercise its election to purchase Securities through the issuance of shares of Parent Common Stock shall be conditioned upon:
(i) the Company's timely giving of the Company Notice of an election to purchase all or a specified percentage of the Securities with shares of Parent Common Stock as provided herein;
(ii) the registration of such shares of Parent Common Stock under the Securities Act, or the Exchange Act, in each case, if required;
(iii) the listing of such shares of Parent Common Stock on the principal national securities exchange on which the shares of Parent Common Stock are listed;
(iv) any necessary qualification or registration under applicable state securities laws or the availability of an exemption from such qualification and registration; and
(v) the receipt by the Trustee of an Officers' Certificate and an Opinion of Counsel each stating that the shares of Parent Common Stock to be delivered by the Company in payment of the Purchase Price in respect of Securities are validly issued, fully paid and non- assessable and, to the best of such counsel's knowledge, free from preemptive rights, and, in the case of such Officers' Certificate, stating that the conditions above and the condition set forth in the second succeeding sentence have been satisfied and, in the case of such Opinion of Counsel, stating that the conditions in clauses (i) through (iv) above have been satisfied.
Such Officers' Certificate shall also set forth the number of shares of Parent Common Stock to be issued for each $1,000 principal amount at maturity of the Securities. The Company may pay the Purchase Price (or any portion thereof) in shares of Parent Common Stock only if the information necessary to calculate the Market Price is published in a daily newspaper of national circulation or other widely disseminated public source. If the foregoing conditions are not satisfied with respect to a Holder or Holders prior to the close of business on the Business Day prior to the Purchase Date, and the Company has elected to purchase the Securities pursuant to this Section 1107 through the issuance of shares of Parent Common Stock, the Company shall pay the entire Purchase Price of the Securities of such Holder or Holders in cash.
The "Market Price" means the average of the Closing Sales Prices of the Parent Common Stock for the five trading day period ending on the third Business Day prior to the applicable Purchase Date (if the third Business Day prior to the applicable Purchase Date is a trading day, or if not, then on the last trading day prior to the third Business Day), appropriately adjusted to take into account the occurrence, during the period commencing on the first of the trading days during the five trading day period and ending on the Purchase Date, of any event described in Sections 1406, 1407, 1408 or 1409 that would require adjustment of the Conversion Rate in respect of the Parent Common Stock; subject, however, to the conditions set forth in Sections 1410 and 1411.
The "Closing Sales Price" of Parent Common Stock on any date means the closing per share sale price (or, if no closing sales price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and the average asked prices) on such date as reported in composite transactions for the principal U.S. securities exchange on which Parent Common Stock is traded or, if Parent Common Stock is not listed on a U.S. national or regional securities exchange, as reported by the Nasdaq system. In the absence of such quotations, the Company shall be entitled to determine the Closing Sales Price on the basis of such quotations as it considers appropriate.
Upon determination of the actual number of shares of Parent Common Stock to be issued upon repurchase of Securities, the Company will disseminate a press release through Reuters Economic Services or Bloomberg Business News containing this information or publish the information on the Parent's web site or through such other public medium as the Parent may use at that time.
(e) Notice of Election. If the Company elects to pay the Purchase Price of Securities to be purchased pursuant to Section 1107(a) with shares of Parent Common Stock or a combination of cash and shares of Parent Common Stock, the Company shall give notice to Holders setting forth information specified in this Section 1107(e) (the "Company Notice"). The Company Notice shall:
(1) state that each Holder will receive shares of Parent Common Stock with a Market Price determined as of a specified date prior to the Purchase Date equal to the Purchase Price of the Securities held by such Holder or a specified percentage thereof (except any cash amount to be paid in lieu of fractional shares);
(2) set forth the method of calculating the Market Price of the shares of Parent Common Stock;
(3) state that because the Market Price of shares of Parent Common Stock will be determined prior to the Purchase Date, Holders of the Securities will bear the market risk with respect to the value of the shares of Parent Common Stock to be received from the date such Market Price is determined to the Purchase Date; and
(4) set forth the procedures that a Holder must follow to exercise its put rights under this Section 1107 and the procedures for withdrawing a Purchase Notice (including, without limitation, a conditional withdrawal pursuant to the terms of Section 1107(a)(1)(D) or Section 1109).
The Company Notice shall be sent to Holders (and to beneficial owners as required by applicable law) not less than 20 Business Days prior to the Purchase Date (the "Company Notice Date").
At the Company's request, the Trustee shall give such Company Notice in the Company's name and at the Company's expense; provided, however, that, in all cases, the text of such Company Notice shall be prepared by the Company.
Simultaneously with such Company Notice, the Company shall disseminate a press release through Reuters Economic Services or Bloomberg Business News containing this information or publish the information on the Parent's web site or through such other public medium as the Parent may use at that time.
(f) Covenants of the Company. All shares of Parent Common Stock delivered upon purchase of the Securities shall be newly issued shares or treasury shares, shall be duly authorized, validly issued, fully paid and nonassessable, and shall be free from preemptive rights and free of any lien or adverse claim.
(g) Procedure upon Purchase. The Company shall deposit cash (in respect of a cash purchases under this Section 1107 or for fractional interests, as applicable) or shares of Parent Common Stock, or a combination thereof, as applicable, at the time and in the manner as provided in Section 1110, sufficient to pay the aggregate Purchase Price of all Securities to be purchased pursuant to this Section 1107. As soon as practicable after the Purchase Date, the Company shall deliver to each Holder entitled to receive shares of Parent Common Stock through the Paying Agent, a certificate for the number of full shares of Parent Common Stock issuable in payment of the Purchase Price and cash in lieu of any fractional interests. The person in whose name the certificate for the shares of Parent Common Stock is registered shall be treated as a holder of record of Parent Common Stock on the Business Day following the Purchase Date. Subject to Section 1107(d), no payment or adjustment will be made for dividends on the shares of Parent Common Stock the record date for which occurred on or prior to the Purchase Date.
(h) Taxes. If a Holder of a purchased Security is paid in shares of Parent Common Stock, the Company shall pay any documentary, stamp or similar issue or transfer tax due on such issue of Parent Common Stock. However, the Holder shall pay any such tax which is due because the Holder requests the Parent Common Stock to be issued in a name other than the Holder's name. The Paying Agent may refuse to deliver the certificates representing the shares of Parent Common Stock being issued in a name other than the Holder's name until the Paying Agent receives a sum sufficient to pay any tax which will be due because the shares of Parent Common Stock are to be issued in a name other than the Holder's name. Nothing herein shall preclude any income tax withholding required by law or regulations.
SECTION 1108. Purchase of Securities at Option of the Holder upon Change in Control.
(a) If a Change in Control occurs, the Securities not previously purchased by the Company or any portion of the principal amount thereof shall be purchased by the Company, at the option of the Holder thereof, at a purchase price equal to the Accreted Principal Amount plus any accrued and unpaid cash interest to the date that is 45 days after the date the Company shall have mailed notice of the occurrence of a Change in Control pursuant to Section 1108(b) (the "Change in Control Purchase Date") or, if the Company has previously exercised its option to pay cash interest instead of accreting the principal amount of the Securities following a Tax Event, at a purchase price equal to the Restated Principal Amount plus any accrued and unpaid cash interest to the Change in Control Purchase Date (the "Change in Control Purchase Price"), subject to satisfaction by or on behalf of the Holder of the requirements set forth in Section 1108(c).
A "Change in Control" shall be deemed to have occurred at such time after the Securities are originally issued as either of the following events shall occur:
(i) any person, including any syndicate or group deemed to be a "person" under Section 13(d)(3) of the Exchange Act, acquires beneficial ownership, directly or indirectly, through a purchase, merger or other acquisition transaction or series of transactions, of shares of Parent Common Stock entitling the person to exercise 50% or more of the total voting power of all shares of the Parent Common Stock that is entitled to vote generally in elections of directors, other than an acquisition by the Parent, any of its Subsidiaries or any of its employee benefit plans; or
(ii) the Parent merges or consolidates with or into any other person, any merger of another person into the Parent, or the Parent conveys, sells, transfers or leases all or substantially all of its assets to another person, other than any transaction: (A) that does not result in any reclassification, conversion, exchange or cancellation of outstanding shares of the Parent's Capital Stock, (B) pursuant to which the holders of Parent Common Stock immediately prior to the transaction have the entitlement to exercise, directly or indirectly, 50% or more of the total voting power of all shares of Parent Common Stock entitled to vote generally in the election of directors of the continuing or surviving corporation immediately after the transaction or (C) which is effected solely to change the Parent's jurisdiction of incorporation and results in a reclassification, conversion or exchange of outstanding shares of Parent Common Stock solely into shares of common stock of the surviving corporation.
Notwithstanding the foregoing provisions of this Section 1108, a Change in Control shall not be deemed to have occurred if (A) the Closing Sales Price of Parent Common Stock for any five trading days within the period of 10 consecutive trading days ending immediately after the later of the Change in Control or the public announcement of the Change in Control, in the case of a Change in Control relating to an acquisition of Capital Stock, or the period of 10 consecutive trading days ending immediately before the Change
in Control, in the case of a Change in Control relating to a merger, consolidation or asset sale, equals or exceeds 105% of the Accreted Conversion Price of the Securities in effect on each of those trading days or (B) all of the consideration in a merger or consolidation otherwise constituting a Change in Control under clause (i) and/or clause (ii) above (other than cash payments not to exceed 5% of the total value of such merger or consolidation (excluding cash payments for fractional shares and cash payments made pursuant to dissenters' appraisal rights)) consists of shares of common stock traded on a national securities exchange or quoted on the Nasdaq National Market (or will be so traded or quoted immediately following the merger or consolidation) and as a result of the merger or consolidation the Securities become convertible into common stock of the surviving corporation.
For purposes of this Section 1108, whether a person is a "beneficial owner" shall be determined in accordance with Rule 13d-3 under the Exchange Act and "person" includes any syndicate or group that would be deemed to be a "person" under Section 13(d)(3) of the Exchange Act.
(b) No later than 30 days after the occurrence of a Change in Control, the Company shall mail a written notice of the Change in Control by first- class mail to the Trustee and to each Holder (and to beneficial owners as required by applicable law). The notice shall include a form of Change in Control Purchase Notice to be completed by the Holder and shall state:
(1) briefly, the events causing a Change in Control and the date of such Change in Control;
(2) the date by which the Change in Control Purchase Notice pursuant to this Section 1108 must be given;
(3) the Change in Control Purchase Date;
(4) the Change in Control Purchase Price;
(5) the name and address of the Paying Agent;
(6) that the Securities as to which a Change in Control Purchase Notice has been given may be converted if they are otherwise convertible pursuant to Article Fourteen hereof only if the Change in Control Purchase Notice has been withdrawn in accordance with the terms of this Indenture;
(7) the procedures for withdrawing a Change in Control Purchase Notice;
(8) that the Securities must be surrendered to the Paying Agent to collect payment;
(9) that the Change in Control Purchase Price for any Security as to which a Change in Control Purchase Notice has been duly given and not withdrawn will be paid promptly following the later of the Change in Control Purchase Date and the time of surrender of such Security;
(10) that, unless the Company defaults in making payment of such Change in Control Purchase Price when due, cash interest, if any, on Securities surrendered for purchase by the Company will cease to accrue and the Securities will cease to accrete in value on and after the Change in Control Purchase Date; and
(11) the CUSIP number(s) of the Securities.
(c) In order to exercise its rights specified in Section 1108(a), a Holder must deliver a written notice requesting purchase of all or a portion of its Securities (a "Change in Control Purchase Notice") to the Paying Agent at any time on or prior to the 30th day after the date the Company delivers its written notice of the occurrence of a Change in Control, stating:
(1) the certificate number(s) of the Securities which the Holder will deliver to be purchased or, if Definitive Securities have not been issued, such information as shall be provided pursuant to appropriate Depositary procedures;
(2) the portion of the principal amount of the Security which the Holder will deliver to be purchased, which portion must be $1,000 or an integral multiple thereof; and
(3) that such Security shall be purchased pursuant to the terms and conditions specified in Paragraph 6 of the Securities.
The timely delivery to the Paying Agent of the Change in Control Purchase Notice and the delivery of such Security (together with all necessary endorsements) at the offices of the Paying Agent shall be a condition to the receipt by the Holder of the Change in Control Purchase Price therefor; provided, however, that, in the case of delivery of such Security to the Paying Agent, such Change in Control Purchase Price shall be so paid pursuant to this Section 1108 only if the Security so delivered to the Paying Agent shall conform in all respects to the description thereof set forth in the related Change in Control Purchase Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 1108, a portion of a Security if the principal amount at maturity
of such portion is $1,000 or an integral multiple of $1,000. Provisions of
this Indenture that apply to the purchase of all of a Security also apply
to the purchase of such portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions of this Section 1108 shall be consummated by the delivery of the consideration to be received by the Holder on the Change of Control Purchase Date.
Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the Change in Control Purchase Notice contemplated by this Section 1108(c) shall have the right to withdraw such Change in Control Purchase Notice at any time prior to the close of business one Business Day prior to the Change in Control Purchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 1109.
The Paying Agent shall promptly notify the Company of the receipt by it of any Change in Control Purchase Notice or written withdrawal thereof.
SECTION 1109. Effect of Purchase Notice or Change in Control Purchase Notice.
Upon receipt by the Paying Agent of the Purchase Notice or Change in Control Purchase Notice specified in Section 1107(a) or Section 1108(c), as applicable, the Holder of the Security in respect of which such Purchase Notice or Change in Control Purchase Notice, as the case may be, was given shall (unless such Purchase Notice or Change in Control Purchase Notice, as the case may be, is withdrawn as specified in the following two paragraphs) thereafter be entitled to receive solely the Purchase Price or Change in Control Purchase Price, as the case may be, with respect to such Security. Such Purchase Price shall be paid to such Holder, subject to receipts of funds and/or securities by the Paying Agent, promptly following, but in no event more than five Business Days after, the later of (x) the Purchase Date with respect to such Security (provided that the conditions in Section 1107(a) have been satisfied) and (y) the time of delivery of such Security to the Paying Agent by the Holder thereof in the manner required by Section 1107(a), and such Change in Control Purchase Price shall be paid to such Holder, subject to receipts of funds and/or securities by the Paying Agent, on the later of (x) the Change in Control Purchase Date with respect to such Security (provided that the conditions in Section 1108(c) have been satisfied) and (y) the time of delivery of such Security to the Paying Agent by the Holder thereof in the manner required by Section 1108(c). Securities in respect of which a Purchase Notice or Change in Control Purchase Notice has been given by the Holder thereof may not be converted pursuant to Article Fourteen hereof on or after the date of the delivery of such Purchase Notice or Change in Control Purchase Notice unless such Purchase Notice or Change in Control Purchase Notice has first been validly withdrawn as specified in the following paragraph.
A Purchase Notice or Change in Control Purchase Notice may be withdrawn by the Holder by means of a written notice of withdrawal delivered to the office of the Paying Agent at any time prior to the close of business one Business Day prior to the Purchase Date or the Change in Control Purchase Date, as the case may be, specifying:
(1) the certificate number, if any, of the Security in respect of which such notice of withdrawal is being submitted or, if Definitive Securities have not been issued, such information
as shall be provided pursuant to appropriate Depositary procedures,
(2) the principal amount at maturity of the Security with respect to which such notice of withdrawal is being submitted, and
(3) the principal amount at maturity, if any, of such Security which remains subject to the original Purchase Notice or Change in Control Purchase Notice, as the case may be, and which has been or will be delivered for purchase by the Company.
There shall be no purchase of any Securities pursuant to Section 1107 or 1108 if there has occurred (prior to, on or after, as the case may be, the giving, by the Holders of such Securities, of the required Purchase Notice or Change in Control Purchase Notice, as the case may be) and is continuing an Event of Default (other than a default in the payment of the Purchase Price or Change in Control Purchase Price, as the case may be, with respect to such Securities). The Paying Agent will promptly return to the respective Holders thereof any Securities (x) with respect to which a Purchase Notice or Change in Control Purchase Notice, as the case may be, has been withdrawn in compliance with this Indenture, or (y) held by it during the continuance of an Event of Default (other than a default in the payment of the Purchase Price or Change in Control Purchase Price, as the case may be, with respect to such Securities) in which case, upon such return, the Purchase Notice or Change in Control Purchase Notice with respect thereto shall be deemed to have been withdrawn.
SECTION 1110. Deposit of Purchase Price or Change in Control Purchase Price.
Prior to 10:00 a.m. (local time in the City of New York) on the fifth Business Day following the Purchase Date or prior to 10:00 a.m. (local time in the City of New York) on the Change in Control Purchase Date, as the case may be, the Company shall deposit with the Paying Agent (or, if the Company or a Subsidiary or an Affiliate of either of them is acting as the Paying Agent, shall segregate and hold in trust as provided in Section 606) an amount of cash (in immediately available funds if deposited on such Business Day) or Parent Common Stock, if permitted hereunder, or both, sufficient to pay the aggregate Purchase Price or Change in Control Purchase Price, as the case may be, of all the Securities or portions thereof which are to be purchased as of the Purchase Date or Change in Control Purchase Date, as the case may be.
SECTION 1111. Securities Purchased in Part.
Any Security which is to be purchased only in part shall be surrendered at the office of the Paying Agent (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holder's attorney duly authorized in writing) and the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Security, without service charge, a new Security or Securities, of any authorized denomination as requested by such Holder in aggregate principal amount equal to, and in exchange for, the
portion of the
principal amount of the Security so surrendered which is not purchased.
SECTION 1112. Repayment to the Company.
The Paying Agent and the Trustee shall return to the Company any cash
or shares of Parent Common Stock that remain unclaimed for two years,
subject to applicable unclaimed property laws, held by them for the payment
of the Purchase Price or Change in Control Purchase Price, as the case may
be; provided, however, that to the extent that the aggregate amount of cash
or shares of Parent Common Stock deposited by the Company pursuant to
Section 1110 exceeds the aggregate Purchase Price or Change in Control
Purchase Price, as the case may be, of the Securities or portions thereof
which the Company is obligated to purchase as of the Purchase Date or
Change in Control Purchase Date, as the case may be, then, unless otherwise
agreed in writing with the Company, promptly after the Business Day
following the Purchase Date or Change in Control Purchase Date, as the case
may be, the Paying Agent and the Trustee shall return any such excess to
the Company.
SECTION 2.04. Conversion.
The Original Indenture is hereby amended, with respect to the Notes only, by adding a new Article Fourteen immediately following Article Thirteen of the Original Indenture, to read as follows:
ARTICLE XIV
CONVERSION
SECTION 1401. Conversion Privilege.
A Holder of a Security may convert such Security into shares of Parent Common Stock at any time during the periods stated in paragraph 7 of the Securities. The number of shares of Parent Common Stock issuable upon conversion of a Security per $1,000 of principal amount at maturity thereof (the "Conversion Rate") shall be that set forth in paragraph 7 in the Securities, subject to adjustment as herein set forth.
A Holder may convert a portion of the principal amount at maturity of a Security if the portion is $1,000 or an integral multiple of $1,000. Provisions of this Indenture that apply to conversion of all of a Security also apply to conversion of a portion of the Security.
SECTION 1402. Conversion Procedure.
To convert a Security, a Holder must satisfy the requirements in paragraph 7 of the Securities. The first Business Day on which the Holder satisfies all those requirements is the conversion date (the "Conversion Date"). As soon as practicable after the Conversion Date, the Company shall deliver to the Holder, through the Conversion Agent, a certificate for the number of whole shares of Parent Common Stock issuable upon the
conversion and cash in lieu of any fractional share determined pursuant to
Section 1403. The Person in whose name the certificate is registered shall
be treated as the stockholder of record as of the close of business on the
Conversion Date. Upon conversion of a Security, such Person shall no longer
be a Holder of such Security.
No payment or adjustment will be made for dividends on, or other distributions with respect to, any Parent Common Stock except as provided in this Article Fourteen. On conversion of a Security, no accrued and unpaid cash interest, if any, or amounts reflecting accretion of the Securities included in the Accreted Principal Amount or the Restated Principal Amount (as the case may be), in each case through the Conversion Date, will be payable with respect to the converted Security and no such cash interest or amounts reflecting accretion of the Securities shall be deemed to be canceled, extinguished or forfeited, but rather shall be deemed to be paid in full to the Holder thereof through delivery of the shares of Parent Common Stock (together with the cash payment, if any, in lieu of fractional shares) in exchange for the Security being converted pursuant to the provisions hereof; and the fair market value of such shares of Parent Common Stock (together with any such cash payment in lieu of fractional shares) shall be treated as issued, to the extent thereof, first in exchange for accrued and unpaid cash interest, if any, through the Conversion Date, and the balance, if any, of such fair market value of such shares of Parent Common Stock (and any such cash payment) shall be treated as issued for the Accreted Principal Amount or the Restated Principal Amount (as the case may be) of the Security being converted pursuant to the provisions hereof. The Company will not adjust the conversion ratio to account for accrued and unpaid cash interest, if any, or for amounts reflecting accretion of the Securities included in the Accreted Principal Amount or the Restated Principal Amount (as the case may be). If a Holder converts more than one Security at the same time, the number of shares of Parent Common Stock issuable upon the conversion shall be based on the total principal amount of the Securities converted.
If the last day on which a Security may be converted is a not a Business Day in a place where a Conversion Agent is located, the Security may be surrendered on the next succeeding day that is a Business Day.
Upon surrender of a Security that is converted in part, the Company shall execute, and the Trustee shall authenticate and deliver to the Holder, a new Security in an authorized denomination equal in principal amount to the unconverted portion of the Security surrendered.
If a Holder submits a Security for conversion after the Company has elected to exercise its option to pay cash interest instead of accreting the principal amount of the Securities following a Tax Event, or if the Company is required to make a cash payment pursuant to an increased accretion rate, in either case between a record date and the opening of business on the next Interest Payment Date (except for Securities or portions of Securities called for redemption on a Purchase Date occurring during the period from the close of business on a record date and ending on the close of business on the next Interest Payment Date, or if such Interest Payment Date is not a Business Day, the next Business Day after
the Interest Payment Date), such Holder shall pay to the Company an amount equal to cash interest payable on the converted principal amount.
SECTION 1403. Fractional Shares.
Holders will not receive fractional shares upon conversion of a Security. Instead, the Holder will receive a cash payment for fractional shares based on the Closing Sales Price of the Parent Common Stock on the trading day immediately preceding the Conversion Date.
SECTION 1404. Taxes on Conversion.
If a Holder submits a Security for conversion, the Company shall pay any documentary, stamp or similar issue or transfer tax due on the delivery of shares of Parent Common Stock upon the conversion. However, the Holder shall pay any such tax which is due because the Holder requests the shares to be registered in a name other than the Holder's name. The Conversion Agent may refuse to deliver the certificates representing the shares of Parent Common Stock being registered in a name other than the Holder's name until the Conversion Agent receives a sum sufficient to pay any tax which will be due because the shares are to be registered in a name other than the Holder's name. Nothing herein shall preclude any tax withholding required by law or regulations.
SECTION 1405. Parent Common Stock.
All shares of Parent Common Stock delivered by the Conversion Agent on behalf of the Company upon conversion of the Securities shall be duly and validly issued and fully paid and nonassessable, and shall be free from preemptive rights and free of any lien or adverse claim. Each of the Company and the Parent will endeavor promptly to comply with all federal and state securities laws regulating the offer and delivery of shares of Parent Common Stock upon conversion of Securities, if any, and the Parent will list or cause to have quoted such shares of Parent Common Stock on each national securities exchange or in the over-the-counter market or such other market on which the shares of Parent Common Stock are then listed or quoted.
SECTION 1406. Adjustment for Change in Capital Stock.
If, after the Issue Date of the Securities, the Parent:
(1) pays a dividend or makes another distribution to all holders of the Parent Common Stock on the Parent Common Stock payable exclusively in shares of Parent Common Stock;
(2) subdivides the outstanding shares of Parent Common Stock into a greater number of shares of Parent Common Stock;
(3) combines the outstanding shares of Parent Common Stock into a smaller number of shares Parent Common Stock; or
(4) pays a dividend or makes other distributions to all holders of the Parent Common Stock consisting of Capital Stock of the Parent (other than those rights and warrants referred to in Section 1411 relating to stockholders rights plans),
then the Conversion Rate in effect immediately prior to such action shall be adjusted so that the Holder of a Security thereafter converted will receive the number of shares of Capital Stock of the Parent which such Holder would have owned immediately following such action if such Holder had converted the Security immediately prior to such action.
The adjustment shall become effective immediately after the record date in the case of a dividend or distribution and immediately after the effective date in the case of a subdivision, combination or reclassification.
If after an adjustment a Holder of a Security upon conversion of such Security may receive shares of two or more classes of Capital Stock of the Parent, the Conversion Rate shall thereafter be subject to adjustment upon the occurrence of an action taken with respect to any such class of Capital Stock as is contemplated by this Article Fourteen with respect to the shares of Parent Common Stock, on terms comparable to those applicable to shares of Parent Common Stock in this Article Fourteen.
SECTION 1407. Adjustment for Rights Issue.
If after the Issue Date of the Securities, the Parent distributes any rights or warrants to all holders of shares of its Parent Common Stock entitling them to purchase shares of Parent Common Stock at a price per share less than the Average Sale Price as of the Time of Determination, the Conversion Rate shall be adjusted in accordance with the formula:
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
O = the number of shares of Parent Common Stock outstanding on the
record date for the distribution to which this Section 1407 is
being applied.
N = the number of additional shares of Parent Common Stock offered
pursuant to the distribution.
P = the offering price per share of the additional shares.
M = the Average Sale Price, minus, in the case of (i) a
distribution to which Section 1406(4) applies or (ii) a
distribution to which Section 1408 applies, for which, in each
23
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case, (x) the record date shall occur on or before the record
date for the distribution to which this Section 1407 applies
and (y) the Ex-Dividend Time shall occur on or after the date
of the Time of Determination for the distribution to which this
Section 1407 applies, the fair market value (on the record date
for the distribution to which this Section 1407 applies) of:
(1) the Capital Stock of the Parent distributed in respect of
each share of Parent Common Stock in such Section 1406(4)
distribution; and
(2) the assets of the Parent or debt securities or any rights,
warrants or options to purchase securities of the Parent
distributed in respect of each share of Parent Common Stock in
such Section 1408 distribution.
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The Board of Directors shall determine fair market values for the purposes of this Section 1407, except as Section 1408 otherwise provides in the case of a Spin-off.
"Average Sale Price" means the average of the Closing Sales Prices of the shares of Parent Common Stock for the shorter of:
(i) 30 consecutive trading days ending on the last full trading day prior to the Time of Determination with respect to the rights, warrants or options or distribution in respect of which the Average Sale Price is being calculated;
(ii) the period (x) commencing on the date next succeeding the first public announcement of (a) the issuance of rights, warrants or options or (b) the distribution, in each case, in respect of which the Average Sale Price is being calculated and (y) proceeding through the last full trading day prior to the Time of Determination with respect to the rights, warrants or options or distribution in respect of which the Average Sale Price is being calculated (excluding days within such period, if any, which are not trading days); or
(iii) the period, if any, (x) commencing on the date next succeeding the Ex-Dividend Time with respect to the next preceding (a) issuance of rights, warrants or options or (b) distribution, in each case, for which an adjustment is required by the provisions of Section 1406(4), 1407, 1408 or 1409 and (y) proceeding through the last full trading day prior to the Time of Determination with respect to the rights, warrants or options or distribution in respect of which the Average Sale Price is being calculated (excluding days within such period, if any, which are not trading days).
In the event that the Ex-Dividend Time (or in the case of a subdivision, combination or reclassification, the effective date with respect thereto) with respect to a dividend, subdivision, combination or reclassification to which Section 1406(1), (2) or (3) applies occurs during the period applicable for calculating "Average Sale Price" pursuant to the definition in the preceding sentence, "Average Sale Price" shall be calculated for such period in a manner determined by the Board of Directors to reflect the impact of such dividend, subdivision, combination or
reclassification on the Closing Sales Price of the shares of Parent Common Stock during such period.
"Time of Determination" means the time and date of the earlier of (i) the determination of shareholders entitled to receive rights, warrants or options or a distribution, in each case, to which Section 1407 or 1408 applies and (ii) the Ex-Dividend Time.
"Ex-Dividend Time" means the time immediately prior to the commencement of "ex-dividend" trading for such rights, warrants or options or distribution on a national or regional exchange or market on which the shares of Parent Common Stock are then listed or quoted.
The adjustment shall become effective immediately after the record date for the determination of shareholders entitled to receive the rights, warrants or options to which this Section 1407 applies. If all of the shares of Parent Common Stock subject to such rights, warrants or options have not been issued when such rights, warrants or options expire, then the Conversion Rate shall promptly be readjusted to the Conversion Rate which would then be in effect had the adjustment upon the issuance of such rights, warrants or options been made on the basis of the actual number of shares of Parent Common Stock issued upon the exercise of such rights, warrants or options.
No adjustment shall be made under this Section 1407 if the application of the formula stated above in this Section 1407 would result in a value of R' that is equal to or less than the value of R.
SECTION 1408. Adjustment for Other Distributions.
If, after the Issue Date of the Securities, the Parent distributes to all holders of its shares of Parent Common Stock any of its debt, securities or assets or any rights, warrants or options to purchase securities of the Parent (including securities or cash, but excluding (x) distributions of Capital Stock referred to in Section 1406 and distributions of rights, warrants or options referred to in Section 1407 and (y) cash dividends or other cash distributions unless such cash dividends or other cash distributions are Extraordinary Cash Dividends) the Conversion Rate shall be adjusted, subject to the provisions of the last paragraph of this Section 1408, in accordance with the formula:
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
M = the Average Sale Price, minus, in the case of a distribution to which Section 1406(4) applies, for which (i) the record date shall occur on or before the record date for the distribution
to which this Section 1408 applies and (ii) the Ex-Dividend Time shall occur on or after the date of the Time of Determination for the distribution to which this Section 1408 applies, the fair market value (on the record date for the distribution to which this Section 1408 applies) of any Capital Stock of the Parent distributed in respect of each share of Parent Common Stock in such Section 1406(4) distribution.
F = the fair market value (on the record date for the distribution to
which this Section 1408 applies) of the assets, securities,
rights, warrants or options to be distributed in respect of each
share of Parent Common Stock in the distribution to which this
Section 1408 is being applied (including, in the case of cash
dividends or other cash distributions giving rise to an
adjustment, all such cash distributed concurrently).
In the event the Parent distributes shares of Capital Stock of a
Subsidiary, the Conversion Rate will be adjusted, if at all, based on the
market value of the Subsidiary stock so distributed relative to the market
value of the Parent Common Stock, as discussed below. The Board of
Directors shall determine fair market values for the purposes of this
Section 1408, except that in respect of a dividend or other distribution of
shares of Capital Stock of any class or series, or similar equity
interests, of or relating to a Subsidiary or other business unit of the
Parent (a "Spin-off"), the fair market value of the securities to be
distributed shall equal the average of the daily Closing Sales Prices of
those securities for the five consecutive trading days commencing on and
including the sixth day of trading of those securities after the
effectiveness of the Spin-off and the average of the Closing Sales Prices
shall mean the average Closing Sales Prices for the Parent Common Stock for
the same five trading days. In the event, however, that an underwritten
initial public offering of the securities in the Spin-off occurs
simultaneously with the Spin-off, fair market value of the securities
distributed in the Spin-off shall mean the initial public offering price of
such securities and the Average Sale Price, for purposes of this sentence,
shall mean the Closing Sales Price for the Parent Common Stock on the same
trading day.
Assuming that a distribution referred to in this Section 1408 shall have occurred, the adjustment referred to in this Section 1408 shall become effective as of a date and time immediately after the record date for the determination of shareholders entitled to receive the distribution to which this Section 1408 applies, except that an adjustment related to a Spin-off shall become effective at the earlier to occur of (i) 10 trading days after the effective date of the Spin-off and (ii) the initial public offering of the securities distributed in the Spin-off.
For purposes of this Section 1408, the term "Extraordinary Cash
Dividend" shall mean any all-cash distributions in an aggregate amount
that, together with (i) any cash and the fair market value of any other
consideration payable in respect of any tender offer by the Parent or any
of its Subsidiaries for shares of Parent Common Stock consummated within
the preceding 12 months not triggering a Conversion Rate adjustment and
(ii) all other all-cash distributions to all or substantially all holders
of Parent Common Stock made within the preceding 12 months not triggering a
Conversion Rate adjustment, exceeds an amount equal to 15% of the market
capitalization of Parent Common Stock on the Business Day immediately preceding the day on which the Parent declares the distribution.
If, upon the date prior to the Ex-Dividend Time with respect to a cash dividend on the shares of Parent Common Stock, the aggregate amount of such cash dividend together with the amounts of all other cash dividends or cash distributions gives rise to an adjustment of the Conversion Rate pursuant to Section 1406, then such cash dividend together with all such other cash dividends or cash distributions shall, for purposes of applying the formula set forth above in this Section 1408, cause the value of "F" to equal (y) the aggregate amount of such cash dividend together with the amounts of such other cash dividends or cash distributions, minus (z) the aggregate amount of all cash dividends or cash distributions for which a prior adjustment in the Conversion Rate was previously made.
In the event that, with respect to any distribution to which this
Section 1408 would otherwise apply, the difference "M-F" as defined in the
above formula is less than $1.00 or "F" is equal to or greater than "M",
then the adjustment provided by this Section 1408 shall not be made and in
lieu thereof the provisions of Section 1415 shall apply to such
distribution.
SECTION 1409. Adjustment for Self-Tender Offer.
If, after the Issue Date of the Securities, the Parent or any Subsidiary of the Parent pays holders of the Parent Common Stock in respect of a tender or exchange offer, other than an odd-lot offer, by the Parent or any of its Subsidiaries for Parent Common Stock to the extent that the offer involves aggregate consideration that, together with (i) any cash and the fair market value of any other consideration payable in respect of any tender offer by the Parent or any of its Subsidiaries for shares of Parent Common Stock consummated within the preceding 12 months not triggering a Conversion Rate adjustment and (ii) all-cash distributions to all or substantially all holders of Parent Common Stock made within the preceding 12 months not triggering a Conversion Rate adjustment, exceeds an amount equal to 15% of the market capitalization of Parent Common Stock on the expiration date of the tender offer, the Conversion Rate shall be adjusted in an equitable manner, as determined by the Parent's Board of Directors in consultation with Goldman, Sachs & Co. or such other nationally recognized investment banking institution satisfactory to the Parent.
SECTION 1410. When Adjustment May Be Deferred.
No adjustment in the Conversion Rate need be made unless the adjustment would require an increase or decrease of at least 1% in the Conversion Rate. Any adjustments that are not made shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Article Fourteen shall be made to the nearest cent or to the nearest 1/1,000th of a share, as the case may be.
SECTION 1411. When No Adjustment Is Required.
If the Parent adopts a stockholders rights plan under which the Parent issues rights providing that each share of Parent Common Stock issued upon conversion of the Security at any time prior to the distribution of separate certificates representing the rights will be entitled to receive the rights, no adjustment need be made as a result of: (i) the issuance of the rights; (ii) the distribution of separate certificates representing the rights; (iii) the exercise or redemption of the rights in accordance with any rights agreement; or (iv) the termination or invalidation of the rights.
No adjustment need be made for a transaction referred to in Section 1407 if Holders of the Securities may participate in the transaction on a basis and with notice that the Board of Directors determines to be fair and appropriate in light of the basis and notice on which holders of shares of Parent Common Stock participate in the transaction. No adjustment need be made for a transaction referred to in Section 1408 if all Holders of the Securities may participate in the transaction.
No adjustment need be made for a change in the par value or no par value of the shares of Parent Common Stock.
To the extent the Securities become convertible pursuant to this Article Fourteen in whole or in part into cash, no adjustment need be made thereafter as to the cash. Interest will not accrue on the cash.
SECTION 1412. Notice of Adjustment.
Whenever the Conversion Rate is adjusted, the Company shall promptly mail to Holders a notice of the adjustment. The Company shall file with the Trustee and the Conversion Agent such notice and a certificate from the Company's independent public accountants briefly stating the facts requiring the adjustment and the manner of computing it. The certificate shall be conclusive evidence that the adjustment is correct. Neither the Trustee nor any Conversion Agent shall be under any duty or responsibility with respect to any such certificate except to exhibit the same to any Holder desiring inspection thereof.
SECTION 1413. Voluntary Increase.
The Company from time to time may increase the Conversion Rate by any
amount at any time for at least 20 days, so long as the increase is
irrevocable during such period. Whenever the Conversion Rate is increased,
the Company shall mail to Holders and file with the Trustee and the
Conversion Agent a notice of the increase. The Company shall mail the
notice at least 15 days before the date the increased Conversion Rate takes
effect. The notice shall state the increased Conversion Rate and the period
it will be in effect. A voluntary increase of the Conversion Rate does not
change or adjust the Conversion Rate otherwise in effect for purposes of
Section 1406, 1407, 1408 or 1409.
SECTION 1414. Notice of Certain Transactions.
If:
(1) the Parent takes any action that would require an adjustment in the Conversion Rate pursuant to Section 1406, 1407, 1408 or 1409 (unless no adjustment is to occur pursuant to Section 1411); or
(2) the Parent takes any action that would require a supplemental indenture pursuant to Section 1415; or
(3) there is a liquidation or dissolution of the Parent;
then the Company shall mail to Holders and file with the Trustee and the Conversion Agent a notice stating the proposed record date for a dividend or distribution or the proposed effective date of a subdivision, combination, reclassification, consolidation, merger, binding share exchange, transfer, liquidation or dissolution. The Company shall file and mail the notice at least 15 days before such date. Failure to file or mail the notice or any defect in it shall not affect the validity of the transaction.
SECTION 1415. Reorganization of the Parent.
If the Parent is a party to a transaction subject to Section 801 (other than a sale of all or substantially all of the assets of the Parent in a transaction in which the holders of shares of Parent Common Stock immediately prior to such transaction do not receive securities, cash or other assets of the Parent or any other person) or a merger or binding share exchange which reclassifies or changes its outstanding shares of Parent Common Stock, the person obligated to deliver securities, cash or other assets upon conversion of Securities shall enter into a supplemental indenture. If the issuer of securities deliverable upon conversion of Securities is an Affiliate of the successor company, that issuer shall join in the supplemental indenture.
The supplemental indenture shall provide that the Holder of a Security may convert it into the kind and amount of securities, cash or other assets which such Holder would have received immediately after the consolidation, merger, binding share exchange or transfer if such Holder had converted the Security immediately before the effective date of the transaction, assuming (to the extent applicable) that such Holder (i) was not a constituent person or an Affiliate of a constituent person to such transaction; (ii) made no election with respect thereto; and (iii) was treated alike with the plurality of non-electing Holders. The supplemental indenture shall provide for adjustments which shall be as nearly equivalent as may be practical to the adjustments provided for in this Article Fourteen. The successor company shall mail to Holders a notice briefly describing the supplemental indenture.
If this Section applies, neither Section 1406 nor Section 1407 applies.
If the Parent makes a distribution to all holders of its shares of Parent Common Stock of any of its assets, or debt securities or any rights, warrants or options to purchase securities of the Parent that, but for the provisions of the last paragraph of Section 1408, would otherwise result in an adjustment in the Conversion Rate pursuant to the provisions of Section 1408, then, from and after the record date for determining the holders of shares of Parent Common Stock entitled to receive the distribution, a Holder of a Security that converts such Security in accordance with the provisions of this Indenture shall upon such conversion be entitled to receive, in addition to the shares of shares of Parent Common Stock into which the Security is convertible, the kind and amount of securities, cash or other assets comprising the distribution that such Holder would have received if such Holder had converted the Security immediately prior to the record date for determining the holders of shares of Parent Common Stock entitled to receive the distribution.
SECTION 1416. Company Determination Final.
Any determination that the Company, the Parent or the Board of Directors must make pursuant to Section 1405, 1406, 1407, 1408, 1409, 1410, 1411, 1415 or 1417 is conclusive, absent manifest error.
SECTION 1417. Simultaneous Adjustments.
In the event that this Article Fourteen requires adjustments to the Conversion Rate under more than one of Sections 1406(4), 1407, 1408 or 1409, and the record dates for the distributions giving rise to such adjustments shall occur on the same date, then such adjustments shall be made by applying, first, the provisions of Section 1406(4), second, the provisions of Section 1408, third, the provisions of Section 1407, and fourth, the provisions of Section 1409.
SECTION 1418. Successive Adjustments.
After an adjustment to the Conversion Rate under this Article Fourteen, any subsequent event requiring an adjustment under this Article Fourteen shall cause an adjustment to the Conversion Rate as so adjusted.
ARTICLE THREE
MISCELLANEOUS
SECTION 3.01. Execution of Supplemental Indenture.
This Supplemental Indenture is executed and shall be construed as an indenture supplemental to the Original Indenture and, as provided in the Original Indenture, this Supplemental Indenture forms a part thereof. The Original Indenture, as supplemented and amended by this Supplemental Indenture, is in all respects hereby adopted, ratified and confirmed.
SECTION 3.02. Conflict with Trust Indenture Act.
If and to the extent that any provision hereof limits, qualifies or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act of 1939, as amended, such imposed duties shall control.
SECTION 3.03. Successors and Assigns.
All covenants and agreements in this Supplemental Indenture by the Company and the Parent shall bind their respective successors and assigns, whether so expressed or not.
SECTION 3.04. Separability Clause.
In case any one or more of the provisions contained in this Supplemental Indenture, the Original Indenture or in the Securities of any series shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Supplemental Indenture, the Original Indenture or of such Securities, but this Supplemental Indenture, the Original Indenture and such Securities shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.
SECTION 3.05. Benefits of Supplemental Indenture.
Nothing in this Supplemental Indenture or in the Original Indenture, express or implied, shall give to any person, other than the parties hereto and their successors hereunder and the Holders (to the extent specified herein or therein), any benefit or any legal or equitable right, remedy or claim under this Supplemental Indenture.
SECTION 3.06. Governing Law.
This Supplemental Indenture shall be deemed to be a contract made under the laws of the State of New York, and for all purposes shall be construed in accordance with the laws of said State.
SECTION 3.07. Execution and Counterparts.
This Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original; but such counterparts shall together constitute but one and the same instrument.
SECTION 3.08. Notices.
Any request, demand, authorization, notice, waiver, consent or communication shall be in writing and delivered in person or mailed by first- class mail, postage prepaid, addressed as follows:
if to the Company:
Verizon Global Funding Corp.
3900 Washington Street, 2nd Floor
Wilmington, Delaware 19802
Attention: President and Treasurer
if to the Parent:
Verizon Communications Inc.
1095 Avenue of the Americas
New York, New York 10036
Attention: Senior Vice President and Treasurer
if to the Trustee:
First Union National Bank
123 South Broad Street
Philadelphia, Pennsylvania 19109
Attention: Corporate Trust Services
The Company, the Parent or the Trustee by notice given to the other in the manner provided above may designate additional or different addresses for subsequent notices or communications.
Any notice or communication given to a Holder shall be mailed to the Holder, by first-class mail, postage prepaid, at the Holder's address as it appears on the registration books of the Security Registrar and shall be sufficiently given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above, it is duly given, whether or not received by the addressee.
If the Company mails a notice or communication to the Holders, it shall mail a copy to the Trustee and each Security Registrar, Paying Agent, Conversion Agent or co-registrar.
IN WITNESS WHEREOF, the undersigned, being duly authorized, have executed this First Supplemental Indenture on behalf of the respective parties hereto as of the date first above written.
VERIZON GLOBAL FUNDING CORP.
By: /s/ Janet M. Garrity
______________________________
Name: Janet M. Garrity
Title: President and Treasurer
Attest:
/s/ Robert W. Erb
___________________________
Name: Robert W. Erb
Title: Secretary
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VERIZON COMMUNICATIONS INC.
By: /s/ William F. Heitmann
_______________________________
Name: William F. Heitmann
Title: Senior Vice President and
Treasurer
Attest:
/s/ Robert W. Erb
___________________________
Name: Robert W. Erb
Title: Assistant Corporate
Secretary
FIRST UNION NATIONAL BANK
By: /s/ John Clapham
______________________________
Name: John Clapham
Title: Vice President
Attest:
/s/ Ednora G. Linares
___________________________
Name: Ednora G. Linares
Title: Vice President
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(SEAL)
EXHIBIT A
[FORM OF FACE OF SECURITY]
THIS SECURITY IS ISSUED WITH ORIGINAL ISSUE DISCOUNT AND IS SUBJECT TO THE RULES FOR DEBT INSTRUMENTS WITH CONTINGENT PAYMENTS UNDER TREASURY REGULATIONS (S) 1.1275-4(b). FOR INFORMATION REGARDING THE ISSUE PRICE, ISSUE DATE, "COMPARABLE YIELD" AND PROJECTED PAYMENT SCHEDULE FOR THIS SECURITY, YOU SHOULD CONTACT: INVESTOR RELATIONS, VERIZON COMMUNICATIONS INC., 1095 AVENUE OF THE AMERICAS, 36TH FLOOR, NEW YORK, NY 10036, TELEPHONE (212) 395-1525.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO NOMINEES OF THE DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN ARTICLE THREE OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.]
THIS SECURITY AND ANY COMMON STOCK OF VERIZON COMMUNICATIONS INC. ISSUABLE UPON THE CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THIS SECURITY AND ANY COMMON STOCK OF VERIZON COMMUNICATIONS INC. ISSUABLE UPON CONVERSION OF THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)(1) TO A PERSON WHO THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
THE SECURITIES ACT UNDER ACQUIRING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) PURSUANT TO THE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (3) TO AN INSTITUTIONAL INVESTOR THAT IS AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT (IF AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.
THIS SECURITY, ANY SHARES OF COMMON STOCK OF VERIZON COMMUNICATIONS INC. ISSUABLE UPON ITS CONVERSION AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF THIS SECURITY AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS SECURITY AND ANY SUCH SHARES SHALL BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY AND ANY SUCH SHARES TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.
The foregoing legend may be removed from this Security on satisfaction of the conditions specified in the Indenture.
The undersigned hereby certifies that each of the Support Agreement and the Share Contribution Agreement endorsed hereon is a true and complete copy of the manually executed Support Agreement and the manually executed Share Contribution Agreement, respectively.
VERIZON GLOBAL FUNDING CORP.
Zero-Coupon Convertible Notes due 2021
No. CUSIP:
Issue Date: May 15, 2001
Issue Price: $551.26
(for each $1,000 principal amount at maturity)
VERIZON GLOBAL FUNDING CORP., a Delaware corporation, promises to pay to [IF GLOBAL SECURITY--Cede & Co.] [IF DEFINITIVE SECURITY--________________] or registered assigns, the principal amount of [ ($ )] on May 15, 2021, subject to adjustment as provided herein.
This Security shall not bear cash interest except as specified on the other side of this Security. This Security is convertible as specified on the other side of this Security.
Additional provisions of this Security are set forth on the other side of this Security.
Dated: VERIZON GLOBAL FUNDING CORP.
By: __________________________________
Name:
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Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
FIRST UNION NATIONAL BANK,
as Trustee, certifies that this is one
of the Securities referred to in the
within-mentioned Indenture.
By: __________________________________ Authorized Signatory
Dated:
[FORM OF REVERSE OF SECURITY]
Zero-Coupon Convertible Notes due 2021
1. Cash Interest and Accretion Rate.
Except as provided in this paragraph 1, this Security shall not bear cash interest. This Security shall initially represent the Issue Price and shall accrete in value at an accretion rate of 3% per annum through the Stated Maturity.
Increased Accretion Rate. Beginning on May 15, 2004, if the Closing Sales Price of the Parent Common Stock is equal to or less than 60% of the Accreted Conversion Price of the Securities for any 20 trading days out of the last 30 consecutive trading days ending three Business Days prior to such date or three Business Days prior to any May 15 or November 15 thereafter, then the accretion rate on the Securities for the semi-annual period commencing on such date will be subject to an increased accretion rate equal to the applicable per annum Reset Rate in effect at that time. Any increased accretion rate made pursuant to the preceding sentence will remain in effect until the May 15 or November 15 thereafter when the Closing Sales Price of the Parent Common Stock is not equal to or less than 60% of the Accreted Conversion Price of the Securities for any 20 trading days out of the last 30 consecutive trading days ending three Business Days prior to such date, at which time the accretion rate will revert to 3% per annum.
The "Reset Rate" will be established by the Reset Rate Agent, as of each Reset Rate Determination Date. The "Reset Rate Determination Date" shall be the date three Business Days preceding each of:
(i) May 15, 2004, in which case the Reset Rate will be the Two- Year Reset Rate;
(ii) May 15, 2006, in which case the Reset Rate will be the Five- Year Reset Rate;
(iii) May 15, 2008, in which case the Reset Rate will be the Two-Year Reset Rate;
(iv) November 15, 2009, in which case the Reset Rate will be the One-Year Reset Rate;
(v) May 15, 2011, in which case the Reset Rate will be the Five- Year Reset Rate;
(vi) May 15, 2013, in which case the Reset Rate will be the Two- Year Reset Rate;
(vii) November 15, 2014, in which case the Reset Rate will be the One-Year Reset Rate;
(viii) May 15, 2016, in which case the Reset Rate will be the Five-Year Reset Rate;
(ix) May 15, 2018, in which case the Reset Rate will be the Two- Year Reset Rate; and
(x) November 15, 2019, in which case the Reset Rate will be the One-Year Reset Rate.
The Reset Rate determined as of each Reset Rate Determination Date
will be equal to the rate that would, in the sole judgment of the Reset Rate
Agent, result in a trading price of par with a hypothetical issue of senior,
nonconvertible, noncontingent, fixed rate debt securities of the Company with
(i) a final maturity equal to, in the case of the Five-Year Reset Rate, five
years; in the case of the Two-Year Reset Rate, two years; and in the case of the
One-Year Reset Rate, one year; (ii) an aggregate principal amount equal to the
Accreted Principal Amount of the Securities; and (iii) covenants and other
provisions that are, insofar as would be practicable for an issue of senior,
nonconvertible, noncontingent, fixed rate debt securities, substantially
identical to those of the Securities. In no case, however, shall the Reset Rate
exceed 11% per annum or be less than 3% per annum. If the Reset Rate Agent has
not established the Reset Rate for the applicable semi-annual period, or if the
Reset Rate Agent determines in its sole judgment that there is no suitable
reference rate from which the Reset Rate may be determined, the Reset Rate for
that period will be the Reset Rate most recently determined (except that if
there is no Reset Rate most recently determined, the Reset Rate shall be a rate
mutually agreed upon by the Reset Rate Agent and the Company reflecting current
market conditions), such Reset Rate to remain in effect until the Reset Rate
Agent determines that there is a suitable reference rate at which time the Reset
Rate Agent shall determine a new Reset Rate for the period ending on the next
Reset Rate Determination Date.
The applicable per annum Reset Rate for a Security that is subject to an increased accretion rate shall be determined as to any period for which such increase is applicable as follows in each case until a new Reset Rate is in effect:
(i) effective May 15, 2004, the applicable per annum Reset Rate on such Security will be the Two-Year Reset Rate established on the Reset Rate Determination Date three Business Days preceding May 15, 2004;
(ii) effective May 15, 2006, the applicable per annum Reset Rate on such Security will be the Five-Year Reset Rate established on the Reset Rate Determination Date three Business Days preceding May 15, 2006;
(iii) effective May 15, 2010 the applicable per annum Reset Rate on such Security will be the One-Year Reset Rate established on the Reset Rate Determination Date three Business Days preceding November 15, 2009;
(iv) effective May 15, 2011 the applicable per annum Reset Rate on such Security will be the Five-Year Reset Rate established on the Reset Rate Determination Date three Business Days preceding May 15, 2011;
(v) effective May 15, 2015, the applicable per annum Reset Rate on such Security will be the One-Year Reset Rate established on the Reset Rate Determination Date three Business Days preceding November 15, 2014;
(vi) effective May 15, 2016, the applicable per annum Reset Rate on such Security will be the Five-Year Reset Rate established on the Reset Rate Determination Date three Business Days preceding May 15, 2016; and
(vii) effective May 15, 2020, the applicable per annum Reset Rate on such Security will be the One-Year Reset Rate established on the Reset Rate Determination Date three Business Days preceding November 15, 2019.
Notwithstanding the foregoing:
(x) if a Security first becomes subject to an increased accretion rate (or first becomes subject to an increased accretion rate following a reversion of the accretion rate to 3%) on or after May 15, 2008, but not later than November 15, 2009, the initial Reset Rate will be the Two-Year Reset Rate established on the Reset Rate Determination Date three Business Days preceding May 15, 2008 and thereafter the applicable Reset Rate will be determined in accordance with the prior sentence;
(y) if a Security first becomes subject to an increased accretion rate (or first becomes subject to an increased accretion rate following a reversion of the accretion rate to 3%) on or after May 15, 2013, but not later than November 15, 2014, the initial Reset Rate will be the Two-Year Reset Rate established on the Reset Rate Determination Date three Business Days preceding May 15, 2013 and thereafter the applicable Reset Rate will be determined in accordance with the prior sentence; and
(z) if a Security first becomes subject to an increased accretion rate (or first becomes subject to an increased accretion rate following a reversion of the accretion rate to 3%) on or after May 15, 2018, but not later than November 15, 2019, the initial Reset Rate will be the Two-Year Reset Rate established on the Reset Rate Determination Date three Business Days preceding May 15, 2018 and thereafter the applicable Reset Rate will be determined in accordance with the prior sentence.
If an increased accretion rate is in effect for a particular semi- annual period, the Company will pay a portion of the increased accretion rate as cash interest at an annualized rate of 0.25% per annum (or 0.125% per semi- annual period) on the Applicable Principal Amount and the remaining increased
accretion rate will be accrued and payable at maturity, redemption or repurchase.
For the determination of the Reset Rate, the Reset Rate Agent shall seek indicative reference rates from three nationally recognized investment banks. The determination of any Reset Rate will be conclusive and binding upon the Reset Rate Agent, the Parent, the Company, the Trustee and the Holders, in the absence of manifest error.
The Reset Rate Agent may be removed at any time by the Parent giving at least sixty days' written notice to the Reset Rate Agent. The Reset Rate Agent may resign at any time upon giving at least thirty days' written notice.
For purposes of this Paragraph 1, the following defined terms shall have the respective meanings provided below.
"Accreted Conversion Price" means, as of any date, the Accreted Principal Amount of this Security divided by the Conversion Rate (as defined in the Indenture).
"Accreted Principal Amount" means, for any date, the Issue Price (as defined in the Indenture) of the Securities adjusted to reflect the accretion of the Securities at the applicable accretion rate to such date.
"Applicable Principal Amount" means, for any semi-annual period, the Issue Price of the Securities adjusted to reflect the accretion of the Securities at the applicable accretion rate to the beginning of such semi-annual period (excluding any accrued and unpaid cash interest).
"Reset Rate Agent" means a nationally recognized financial institution to be appointed by the Company to establish the applicable Reset Rate as of each Reset Rate Determination Date.
In the event of an increased accretion rate, the Company will disseminate a press release through Reuters Economic Services or Bloomberg Business News containing this information or publish the information on the Parent's web site on the World Wide Web or through such other public medium as the Parent may use at that time.
Tax Event. From and after the date of the occurrence of a Tax Event, the Company will have the option to pay cash interest on the Securities instead of accreting the principal amount thereof, including any cash interest payable pursuant to an increased accretion rate. Following the Company's election to pay cash interest following a Tax Event, the principal amount on which cash interest is payable will be restated and will equal the Restated Principal Amount, and cash interest will accrue from the date of such restatement. The Restated Principal Amount shall be the amount due at maturity of the Securities. Cash interest will be paid on the Restated Principal Amount at a rate equal to the accretion rate that would be in effect from time to time if the Company had not elected to pay cash interest.
A "Tax Event" means that the Company shall have received an opinion from a nationally-recognized independent tax counsel experienced in such matters to the effect that, as a result of:
(i) any amendment to, or change (including any announced prospective change (which will not include a proposed change)) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority of the United States or any political subdivision, provided that a Tax Event will not occur more than 90 days before the effective date of any prospective change in such laws or regulations;
(ii) any judicial decision or official administrative pronouncement, ruling, regulatory procedure, notice or announcement, including any notice or announcement of intent to adopt such procedures or regulations (an "Administrative Action''); or
(iii) any amendment to or change in the administrative position or interpretation of any Administrative Action or judicial decision that differs from the theretofore generally accepted position, in each case, by any legislative body, court, government agency or regulatory body, irrespective of the manner in which such amendment or change is made known, which amendment or change is effective or such Administrative Action or decision is announced, in each case, on or after the Issue Date;
there is more than an insubstantial risk that interest payable on this Security, including amounts reflecting accretion of the Securities included in the Accreted Principal Amount and any cash interest payable pursuant to an increased accretion rate, either:
(i) would not be deductible on a current accrual basis; or
(ii) would not be deductible under any other method, in either case in whole or in part, by the Company for United States federal income tax purposes.
Cash Interest and Accretion Computation and Method of Payment. Any cash interest payable hereunder and any accretion of the Securities will be computed based on a 360-day year of twelve 30-day months. Cash interest, if any, will be payable semi-annually in arrears on each May 15 and November 15 (each an "Interest Payment Date") through maturity; provided that, in the event the Company elects to pay cash interest upon the occurrence of a Tax Event as of a date less than 60 days prior to any Interest Payment Date, the first payment of cash interest shall be made on the Interest Payment Date next succeeding such Interest Payment Date. The record date for the payment of cash interest to Holders will be the close of business on May 1 and November 1 of each year (whether or not a Business Day); provided that cash interest payable at Stated Maturity or upon redemption or repurchase will be payable to the person to whom principal is payable. The Company will give notice to the Holders, no later than 15 days prior to each record date, of the amount of cash interest to be paid as of the next Interest Payment Date. Cash interest on the Securities will be paid to registered holders of the Securities as of the record date.
2. Method of Payment at Redemption, Repurchase or Maturity.
Subject to the terms and conditions of the Indenture, the Company will make payments (1) in cash in respect of a Redemption Price, Change in Control Purchase Price and at Stated Maturity and (2) in cash, shares of Parent Common Stock or a combination thereof in respect of a Purchase Price, in each case to Holders who surrender Securities to a Paying Agent to collect such payments in respect of the Securities. The Company will pay cash amounts in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Company may pay such cash amounts by check payable in such money.
3. Paying Agent, Conversion Agent, Security Registrar and Reset Rate Agent.
First Union National Bank (the "Trustee") will initially act as Paying Agent, Conversion Agent and Security Registrar. The Company may appoint and change any Paying Agent, Conversion Agent, Security Registrar or Reset Rate Agent without notice, other than notice to the Trustee; provided that the Company will maintain at least one Paying Agent in the State of New York, The City of New York, The Borough of Manhattan, which shall initially be an office or agency of the Trustee. The Company or any of its Subsidiaries or any of their Affiliates may act as Paying Agent, Conversion Agent, Security Registrar or Reset Rate Agent.
4. Indenture.
The Company issued the Securities under an Indenture dated as of December 1, 2000, as amended (the "Indenture"), among the Company, the Parent and the Trustee. The terms of the Securities include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act. The Securities are subject to all such terms, and Holders are referred to the Indenture and the Trust Indenture Act for a statement of those terms. Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the Indenture.
The Securities are general unsecured obligations of the Company limited to $6,258,390,000 aggregate principal amount at maturity, subject to upward adjustment from time to time in the event there is an increased accretion rate in effect pursuant to paragraph 1 hereof.
The Indenture does not limit other indebtedness of the Company, secured or unsecured.
5. Redemption at the Option of the Company.
The Securities are redeemable at the option of the Company in whole or in part, at any time or from time to time on, or after May 15, 2006 upon not less than 30 nor more than 60 days' notice by mail to Holders for a cash price equal to the Accreted Principal Amount plus any accrued and unpaid cash interest, up to the Redemption Date (the "Redemption Price"). No sinking fund is provided for the Securities.
Notice of redemption will be mailed at least 30 days but not more than 60 days before the Redemption Date to each Holder of Securities to be redeemed at the Holder's registered address.
6. Purchase By the Company at the Option of the Holder.
Subject to the terms and conditions of the Indenture, the Company shall become obligated to purchase, at the option of the Holder, all or any portion of the Securities held by such Holder on May 15, 2004, May 15, 2006, May 15, 2011 and May 15, 2016, in integral multiples of $1,000 principal amount at maturity, at a Purchase Price equal to the Accreted Principal Amount plus any accrued and unpaid cash interest to the Purchase Date or, if the Company has previously exercised its option to pay cash interest instead of accreting the principal amount of the Securities following a Tax Event, at a purchase price equal to the Restated Principal Amount plus accrued and unpaid cash interest to the Purchase Date. To exercise such right, a Holder shall deliver to the Company a Purchase Notice containing the information set forth in the Indenture, at any time from the opening of business on the date that is 20 Business Days prior to such Purchase Date until the close of business on the Business Day prior to such Purchase Date, and shall deliver the Securities to the Paying Agent as set forth in the Indenture.
The Purchase Price may be paid, at the option of the Company, in cash or by delivery of shares of Parent Common Stock, or in any combination thereof. If the Company elects to pay the Purchase Price in shares of Parent Common Stock or a combination of Parent Common Stock and cash, the Company shall notify Holders of such election 20 Business Days prior to the Purchase Date.
Subject to the terms and conditions of the Indenture, if a Change in Control occurs, the Company shall become obligated to purchase, at the option of the Holder, all or any portion of the Securities held by such Holder, at a purchase price equal to the Accreted Principal Amount plus any accrued and unpaid cash interest to the Change in Control Purchase Date or, if the Company has previously exercised its option to pay cash interest instead of accreting the principal amount of the Securities following a Tax Event, at a purchase price equal to the Restated Principal Amount plus any accrued and unpaid cash interest to the Change in Control Purchase Date. To exercise such right, a Holder shall deliver to the Company a Change in Control Purchase Notice containing the information set forth in the Indenture, at any time until the close of business on the 30th day after the date the Company delivers its written notice of the occurrence of a Change in Control, and shall deliver the Securities to the Paying Agent as set forth in the Indenture.
Holders have the right to withdraw any Purchase Notice or Change in Control Purchase Notice, as the case may be, by delivering to the Paying Agent a written notice of withdrawal in accordance with the provisions of the Indenture.
If cash (and/or Parent Common Stock if permitted under the Indenture) sufficient to pay the Purchase Price or Change in Control Purchase Price, as the case may be, of all Securities or portions thereof to be purchased as of the Purchase Date or the Change in Control Purchase Date, as the case may be, is deposited with the Paying Agent on the fifth Business Day following the Purchase Date or prior to 10:00 a.m. (local time in the City of New York) on the Change in Control Purchase Date and cash interest ceases to accrue on such Securities (or portions thereof) and the Securities cease to accrete in value immediately after such Purchase Date or Change in Control Purchase Date, the Holder thereof shall have no other rights as such other than the right to receive the Purchase
Price or Change in Control Purchase Price upon surrender of such Security.
7. Conversion.
Holders may surrender Securities for conversion into shares of Parent Common during any quarterly conversion period if the Closing Sales Price of the Parent Common Stock for at least 20 trading days in the 30 consecutive trading days ending on the first day of the quarterly conversion period is more than the percentage which shall initially be 120% and shall decline by .25% per semi- annual period over the life of the Securities to 110% (the "Applicable Percentage") of the Accreted Conversion Price on the first day of such quarterly conversion period. A "quarterly conversion period" will be the period from and including the 12th trading day in a fiscal quarter of the Parent to but not including the 12th trading day in the immediately following fiscal quarter of the Parent.
Holders may also surrender Securities for conversion into shares of Parent Common Stock during the five Business Day period following the ten Business Days after any nine consecutive trading day period in which for each day the trading price of the Securities (as determined by the Trustee) is less than 95% of the product of the Closing Sales Price of the Parent Common Stock multiplied by the number of shares into which a Security is convertible for that period. The "trading price" of the Securities on any date of determination means the average of the secondary market bid quotations per Security obtained by the Conversion Agent for $10,000,000 principal amount at maturity of the Securities at approximately 3:30 p.m., New York City time, on such determination date from three independent nationally recognized securities dealers selected by the Company; provided that if at least three such bids cannot reasonably be obtained by the Conversion Agent, but two such bids are obtained, then the average of the two bids shall be used, and if only one such bid can reasonably be obtained by the Conversion Agent, this one bid shall be used; and provided further that if there are different secondary market quotations for Securities that have been resold in transactions registered under any registration statement filed with the Commission (as defined in the Indenture) and Securities that have been resold pursuant to the exemption from registration under the Securities Act provided by Rule 144 thereunder, the "trading price" of the Securities will be determined based on the higher of the two sets of market quotations. If the Conversion Agent cannot reasonably obtain at least one bid for $10,000,000 principal amount of maturity of the Securities from a nationally recognized securities dealer or, in the reasonable judgment of the Company, the bid quotations are not indicative of the secondary market value of the Securities, then the trading price of the Securities will equal (a) the then- applicable Conversion Rate of the Securities multiplied by (b) the closing price on the New York Stock Exchange of Parent Common Stock on such determination date.
For the purposes of the immediately preceding paragraph, the term "nine consecutive trading day period" means any nine consecutive trading days during which the Conversion Agent determines the trading price of the Securities; provided that the Conversion Agent shall have no obligation to determine the trading price of the Securities unless requested by the Company; and provided further that the Company shall have no obligation to make such request unless a Holder provides the Company with reasonable evidence that the trading price of the Securities would be less than 95% of the product of the Closing Sales Price of the Parent Common Stock multiplied by the number of
shares into which a Security is convertible; and at which time, the Company shall instruct the Conversion Agent to determine the trading price of the Securities beginning on the next trading day and on each successive trading day until the trading price is greater than or equal to 95% of the product of the Closing Sales Price of the Parent Common Stock and the number of shares into which a Security is convertible.
If at the time of conversion pursuant to the second paragraph of this Paragraph 7 the Closing Sales Price of Parent Common Stock is greater than 100% of the Accreted Conversion Price but equal to or less than the Applicable Percentage of the Accreted Conversion Price, then the Holders will receive, in lieu of shares of Parent Common Stock based on the applicable Conversion Rate, at the Company's option, cash or shares of Parent Common Stock, or a combination of both cash and shares, with a value equal to the Accreted Principal Amount of the Securities on the Conversion Date ("Accreted Value Conversion"). If there is an Accreted Value Conversion, the shares of Parent Common Stock will be valued at the average Closing Sales Price for the five trading days ending on the third trading day prior to the date of conversion. If the Company elects to pay all or a portion of the Accreted Principal Amount upon an Accreted Value Conversion in shares of Parent Common Stock, the Company will notify holders not less than nine trading days prior to the beginning of the five Business Day period in which Holders can convert their Securities pursuant to an Accreted Value Conversion.
A Holder may also surrender for conversion a Security or portion of a Security which has been called for redemption pursuant to Paragraph 5 hereof, even if the foregoing provisions have not been satisfied. Such Securities may be surrendered for conversion at any time following receipt of a notice of redemption until the close of business on the Business Day prior to the Redemption Date.
In the event that the Parent distributes to all holders of Parent Common Stock certain rights, for a period expiring within 60 days, as described in Section 1407 of the Indenture, or a dividend or a distribution, as described in Section 1408 of the Indenture where the fair market value of such dividend or distribution per share of Parent Common Stock, as determined in the Indenture, exceeds 15% of the Closing Sales Price of a share of Parent Common Stock as of the trading day prior to the date of declaration for such distribution, the Securities may be surrendered for conversion beginning on the date the Company gives notice to the Holders of such right, which shall be not less than 20 days prior to the Ex-Dividend Time for such dividend or distribution, and at any time thereafter until the close of business on the Business Day prior to the Ex- Dividend Time or until the Company announces that such distribution will not take place. No adjustment to the ability of a Holder to convert will be made if such Holder will otherwise participate in the dividend or distribution without conversion.
In addition, in the event the Parent is a party to a consolidation,
merger or binding share exchange pursuant to which the shares of Parent Common
Stock would be converted into cash, securities or other property as set forth in
Section 1415 of the Indenture, the Securities may be surrendered for conversion
at any time from and after the date which is 15 days prior to the date the
Parent announces as the anticipated effective time until 15 days after the
actual date of such transaction.
If the Parent is a party to a consolidation, merger or binding share exchange pursuant to which the Parent Common Stock is converted into cash, securities or other property, at the effective time of the transaction, the right to convert a Security into shares of Parent Common Stock will be changed into a right to convert it into the kind and amount of cash, securities or other property which the Holder would have received if the Holder had converted its Securities immediately prior to the transaction.
A Security in respect of which a Holder has delivered a Purchase Notice or a Change in Control Purchase Notice exercising the option of such Holder to require the Company to purchase such Security may be converted only if such notice of exercise is withdrawn in accordance with the terms of the Indenture.
The Conversion Rate is 7.9318 shares of Parent Common Stock per $1,000 principal amount at maturity, subject to adjustment in certain events described in the Indenture. A Holder which surrenders Securities for conversion will receive cash in lieu of any fractional share of Parent Common Stock.
To surrender a Security for conversion, a Holder must (1) complete and manually sign the irrevocable conversion notice below (or complete and manually sign a facsimile of such notice) and deliver such notice to the Conversion Agent, (2) furnish appropriate endorsements and transfer documents and (3) pay any transfer or similar tax, if required.
A Holder may convert a portion of a Security if the principal amount at maturity of such portion is $1,000 at maturity or an integral multiple of $1,000 at maturity, subject to an upward adjustment in the event there is an increased accretion rate. No payment or adjustment will be made for dividends on the shares of Parent Common Stock except as provided in the Indenture. Except as provided herein and in the Indenture, on conversion of a Security, the Holder will not receive any cash payment representing the Accreted Principal Amount with respect to the converted Securities. Instead, upon conversion the Company will deliver to the Holder a fixed number of shares of Parent Common Stock and any cash payment to account for fractional shares. The cash payment for fractional shares will be based on the Closing Sales Price of the Parent Common Stock on the trading day immediately prior to the Conversion Date. Delivery of shares of Parent Common Stock will be deemed to satisfy the Company's obligation to pay the principal amount of the Securities, including accrued cash interest. Accrued cash interest will be deemed paid in full rather than canceled, extinguished or forfeited. The Company will not adjust the Conversion Rate to account for accrued interest.
The Conversion Rate will be adjusted as provided in Article Fourteen of the Indenture. The Company may increase the Conversion Rate for at least 20 days, so long as the increase is irrevocable during such period.
8. Denominations; Transfer; Exchange.
The Securities are in fully registered form, without coupons, in denominations of $1,000 of principal amount and integral multiples of $1,000. A Holder may transfer or exchange Securities in accordance with the Indenture. The Security Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Security Registrar need not transfer or exchange any Securities selected for redemption (except, in the case of a Security to be redeemed in part, the portion of the Security not to be redeemed) or any Securities in respect of which a Purchase Notice or Change in Control Purchase Notice has been given and not withdrawn (except, in the case of a Security to be purchased in part, the portion of the Security not to be purchased) or any Securities for a period of 15 days before the mailing of a notice of redemption of Securities to be redeemed.
9. Persons Deemed Owners.
The registered Holder of this Security may be treated as the owner of this Security for all purposes.
10. Unclaimed Money or Securities.
The Trustee and the Paying Agent shall return to the Company upon written request any money or securities held by them for the payment of any amount with respect to the Securities that remains unclaimed for two years, subject to applicable unclaimed property law. After return to the Company, Holders entitled to the money or securities must look only to the Company for payment as general creditors unless an applicable abandoned property law designates another person.
11. Amendment; Waiver.
The Company, the Parent and the Trustee, with the written consent of the Holders of at least a majority in aggregate principal amount of the Securities at the time outstanding, may amend the Indenture or the Securities. However, without the consent of each Holder affected, an amendment or supplement to the Indenture or the Securities may not:
(1) reduce the principal of or premium on or change the Stated Maturity of any Security;
(2) reduce the rate of or change the time for payment of cash interest on, or reduce the accretion rate of, any Security;
(3) reduce or alter the method of computation of the Redemption Price, Purchase Price or Change in Control Purchase Price of any Security or the time when such Redemption Price, Purchase Price or Change in Control Purchase Price is payable;
(4) make the principal of, or cash interest on, any Security payable in money or securities other than that stated in the Security or change the price of payment;
(5) make any change that would impair any of the rights granted in
Section 508 of the Indenture in any material respect;
(6) modify any provisions of the Support Agreement or the Share Contribution Agreement, except for such modifications which do not adversely affect the interests of Holders in any material respect; or
(7) reduce the percentage of principal amount of the outstanding Securities of a series required to amend or supplement the Indenture or waive any of its provisions.
It shall not be necessary for the consent of the Holders under this paragraph 11 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof.
After an amendment under this paragraph 11 becomes effective, the Trustee will mail to each Holder a notice briefly describing such amendment.
12. Defaults and Remedies.
Under the Indenture, Events of Default include:
(1) the Company's failure for 90 days to pay when due any cash interest
on the Securities (after any increased accretion rate or after the Company's election to pay cash interest on the Securities following a Tax Event);
(2) the Company's failure to pay principal on the Securities (or, if the Company has elected to pay cash interest on the Securities following a Tax Event, the Restated Principal Amount) when due, whether at Stated Maturity, by declaration, upon redemption, upon repurchase or otherwise;
(3) the Company's failure to perform, or breach of, any covenant or warranty in the Securities or in the Indenture and applicable to the Securities for 90 days after notice to the Company by the Trustee or by Holders of at least 25% in principal amount at maturity of the outstanding Securities; and
(4) certain events involving bankruptcy, insolvency or reorganization of the Parent or the Company.
Holders may not enforce the Indenture or the Securities except as provided in the Indenture. The Trustee may refuse to enforce the Indenture or the Securities unless it receives reasonable indemnity or security. Subject to certain limitations, Holders of a majority in aggregate principal amount of the Securities at the time outstanding may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing default under the Indenture (except a default in payment of amounts specified in clauses (1) or (2) above) if it determines that withholding notice is in their interests; and provided, further, that in the case of any default of the character specified in clause (3) above no such notice to Holders shall be given until at least 60 days after the occurrence thereof.
13. Trustee Dealings with the Company.
Subject to certain limitations imposed by the Trust Indenture Act, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Securities and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal
with the Company or its Affiliates with the same rights it would have if it were not Trustee.
14. No Recourse Against Others.
A director, officer, employee or shareholder, as such, of either the Company or the Parent shall not have any liability for any obligations of the Company under the Securities or the Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Holder waives and releases all such liability. The waiver and release are part of the consideration for the issue of the Securities.
15. Authentication.
This Security shall not be valid until an authorize signatory of the Trustee manually signs the Trustee's Certificate of Authentication on the other side of this Security.
16. Abbreviations.
Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with right of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
17. GOVERNING LAW.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS
SECURITY.
18. Registration Rights.
The Holders of the Securities are entitled to the benefits of a Registration Rights Agreement, dated as of May 15, 2001, among Company and Goldman, Sachs & Co. and Credit Suisse First Boston Corporation, including the receipt of liquidated damages upon a registration default (as defined in such agreement).
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ASSIGNMENT FORM CONVERSION NOTICE
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To assign this Security, fill in the To convert this Security into
form below: Parent Common Stock, check the
box [ ]
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I or we assign and transfer this To convert only part of this
Security to Security, state the principal
_________________________ amount to be converted (which must
_________________________ be $1,000 or an integral multiple
(Insert assignee's soc. sec. or tax of $1,000):
ID no.)
_________________________ If you want the stock certificate
_________________________ made out in another person's name
_________________________ fill in the form below:
(Print or type assignee's name, _________________________
address and zip code) _________________________
(Insert the other person's soc.
and irrevocably appoint sec. tax ID no.)
____________________ agent to __________________________
transfer this Security on the books __________________________
of the Company. The agent may __________________________
substitute another to act for him. __________________________
__________________________
(Print or type other person's name,
address and zip code)
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Date: __________ Your Signature: ____________________________________
Signature Guaranteed
By:_______________________________
Authorized Signatory
SCHEDULE OF INCREASES AND DECREASES OF GLOBAL SECURITY
Initial Principal Amount of Global Security: ____________($___________).
Date Amount of Increase Amount of Decrease Principal Amount Notation by
in Principal in Principal of Global Security Security Registrar
Amount of Global Amount of Global After Increase or or Security
Security Security Decrease Custodian
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Zero-Coupon Convertible Notes due 2021
Transfer Certificate
In connection with any transfer of any of the Securities within the period prior to the expiration of the holding period applicable to the sales thereof under Rule 144(k) under the Securities Act of 1933, as amended (the "Securities Act") (or any successor provision), the undersigned registered owner of this Security hereby certifies with respect to $____________ principal amount of the above-captioned Securities presented or surrendered on the date hereof (the "Surrendered Securities") for registration of transfer, or for exchange or conversion where the securities issuable upon such exchange or conversion are to be registered in a name other than that of the undersigned registered owner (each such transaction being a "transfer"), that such transfer complies with the restrictive legend set forth on the face of the Surrendered Securities for the reason checked below:
[_] A transfer of the Surrendered Securities is made to the Company or any subsidiaries; or
[_] The transfer of the Surrendered Securities complies with Rule 144A under the U.S. Securities Act of 1933, as amended (the "Securities Act"); or
[_] The transfer of the Surrendered Securities is pursuant to an effective registration statement under the Securities Act, or
[_] The transfer of the Surrendered Securities is pursuant to another available exemption from the registration requirement of the Securities Act.
and unless the box below is checked, the undersigned confirms that, to the undersigned's knowledge, such Securities are not being transferred to an "affiliate" of the Company as defined in Rule 144 under the Securities Act (an "Affiliate").
[_] The transferee is an Affiliate of the Company.
DATE: __________________________________
Signature(s)
(If the registered owner is a corporation, partnership or fiduciary,
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the title of the person signing on behalf of such registered owner must be stated.)
Signature Guaranteed
Guarantee Medallion Program
By: _____________________________
Authorized Signatory
EXHIBIT 4.3
VERIZON GLOBAL FUNDING CORP.
$5,442,079,000 Zero Coupon Convertible Notes due 2021
REGISTRATION RIGHTS AGREEMENT
May 15, 2001
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Credit Suisse First Boston Corporation
11 Madison Avenue
New York, New York 10010
Ladies and Gentlemen:
Verizon Global Funding Corp., a Delaware corporation (the "Company"), proposes to issue and sell to Goldman, Sachs & Co. and Credit Suisse First Boston Corporation (the "Initial Purchasers"), upon the terms and subject to the conditions set forth in a purchase agreement, dated May 9, 2001 (the "Purchase Agreement"), $5,442,079,000 aggregate principal amount at maturity of its Zero Coupon Convertible Notes due 2021 (the "Securities") to be supported by Verizon Communizations Inc. (the "Support Provider") pursuant to the Support Agreement, dated as of October 31, 2000, between the Company and the Support Provider and the Share Contribution Agreement, dated as of May 15, 2001, between the Company and the Support Provider. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Purchase Agreement.
As an inducement to the Initial Purchasers to enter into the Purchase Agreement and in satisfaction of a condition to the obligations of the Initial Purchasers thereunder, the Company and the Support Provider agree with the Initial Purchasers, for the benefit of the holders (including the Initial Purchasers) of the Securities and the beneficial owners from time to time of Underlying Shares into which the Securities are convertible or issued upon any such conversion (collectively, the "Holders"), as follows:
I. SHELF REGISTRATION.
A. The Company and the Support Provider shall use their reasonable best efforts to file as promptly as practicable (but in no event more than 90 days after the earliest date of original issuance of any of the Notes (the "Issue Date")) with the Commission (the "Shelf Filing Deadline Date"), and thereafter shall use their reasonable best efforts to cause to be declared effective as promptly as practicable (but in no event more than 210 days after the Issue Date (the "Effectiveness Deadline Date")), a shelf registration statement for an offering to be made on a delayed or continuous basis pursuant to Rule 415 under the Act on an appropriate form relating to the offer and sale of the Registrable Securities (as defined below) by the Holders thereof from time to time in accordance with the methods of distribution elected by the Holders and set forth in such registration statement (hereafter, the "Initial
Shelf Registration Statement", and together with any Subsequent Shelf Registration Statement (as defined below), a "Shelf Registration Statement"); provided that in no event will such method(s) of distribution take the form of an underwritten offering of Registrable Securities without the prior agreement of the Company and the Support Provider. At the time any Shelf Registration Statement is declared effective, each Holder that became a Notice Holder on or prior to the deadline for response set forth in the Notice and Questionnaire (as defined below) shall be named as a selling securityholder in the Shelf Registration Statement and the related prospectus in such a manner as to permit such Holder to deliver such prospectus to purchasers of Registrable Securities in accordance with applicable law. None of the securityholders of either of the Company or the Support Provider (other than the Holders of Registrable Securities) shall have the right to include any of the securities of any of the Company or the Support Provider in the Shelf Registration Statement. The term "Notice Holder" means on any date, any Holder that has delivered a Notice and Questionnaire to the Company on or prior to such date. The term "Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which banking institutions in The City of New York are authorized or obligated by law or executive order to close. The term "Registrable Securities" means the Securities and the Underlying Shares, until such securities have been converted, and, at all times subsequent to any such conversion, any securities into or for which such securities have been converted, and any security issued with respect thereto upon any stock dividend, split or similar event until, in the case of any such security, the earliest of (i) its effective registration under the Act and resale in accordance with the Shelf Registration Statement covering it, (ii) expiration of the holding period that would be applicable thereto under Rule 144(k) under the Act were it not held by an Affiliate of the Company or the Support Provider or (iii) its sale to the public pursuant to Rule 144 under the Act.
B. The Company and the Support Provider shall use their reasonable best efforts to keep the Shelf Registration Statement continuously effective in order to permit the prospectus forming part thereof to be used by Holders of Registrable Securities for a period of two years from the last date of original issuance of any of the Notes or such shorter period that will terminate when all the Registrable Securities become eligible for resale without volume restrictions pursuant to Rule 144 under the Act (in any such case, such period being called the "Shelf Registration Period"). If the Initial Shelf Registration Statement or any Subsequent Shelf Registration Statement ceases to be effective for any reason at any time during the Shelf Registration Period, the Company and the Support Provider shall use all reasonable efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof, and in any event shall amend the Shelf Registration Statement in a manner reasonably expected to obtain the withdrawal of the order suspending the effectiveness thereof, or file an additional Shelf Registration Statement covering all of the securities that as of the date of such filing are Registrable Securities (a "Subsequent Shelf Registration Statement"). If a Subsequent Shelf Registration Statement is filed, the Company and Support Provider shall use all reasonable efforts to cause the Subsequent Shelf Registration Statement to become effective as promptly as is practicable after such filing and to keep such Shelf Registration Statement (or subsequent Shelf Registration Statement) continuously effective until the end of the Shelf Registration Period.
C. Notwithstanding any other provisions hereof, the Company and the Support Provider will ensure that (i) any Shelf Registration Statement and any amendment thereto and any prospectus forming part thereof and any supplement
thereto complies in all material respects with the Act and the rules and
regulations of the Commission thereunder, (ii) any Shelf Registration Statement
and any amendment thereto (in either case, other than with respect to
information included therein in reliance upon or in conformity with written
information furnished to the Company by or on behalf of any Holder specifically
for use therein (the "Holders' Information")) does not contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(iii) any prospectus forming part of the Shelf Registration Statement, and any
supplement to such prospectus (in either case, other than with respect to
Holders' Information), does not include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
D. Each Holder of Registrable Securities agrees that if such Holder
wishes to sell Registrable Securities pursuant to a Shelf Registration Statement
and related prospectus, it will do so only in accordance with this Section and
Section III. Each Holder of Registrable Securities wishing to sell Registrable
Securities pursuant to a Shelf Registration Statement and related prospectus
agrees to deliver a Notice and Questionnaire to the Company on or prior to the
deadline for response set forth in the Notice and Questionnaire. The term
"Notice and Questionnaire" means a written notice mailed by the Company to the
holders of Registrable Securities not less than 30 calendar days prior to the
date Company intends in good faith to have the Shelf Registration Statement
declared effective. From and after the date the Initial Shelf Registration
Statement is declared effective, the Company and Support Provider shall, as
promptly as is practicable after the date a Notice and Questionnaire is
delivered, (i) if required by applicable law, file with the U.S. Securities and
Exchange Commission a post-effective amendment to the Shelf Registration
Statement or prepare and, if required by applicable law, file a supplement to
the related prospectus or a supplement or amendment to any document incorporated
therein by reference or file any other document required by the U.S. Securities
and Exchange Commission so that the Holder delivering such Notice and
Questionnaire is named as a selling securityholder in the Shelf Registration
Statement and the related prospectus in such a manner as to permit such Holder
to deliver such prospectus to purchasers of the Registrable Securities in
accordance with applicable law and, if the Company and Support Provider shall
file a post-effective amendment to the Shelf Registration Statement, use
reasonable efforts to cause such post-effective amendment to be declared
effective under the Securities Act as promptly as is practicable; (ii) provide
such Holder copies of any documents filed pursuant to this Section; and (iii)
notify such Holder as promptly as practicable after the effectiveness under the
Securities Act of any post-effective amendment filed pursuant to this Section;
provided that if such Notice and Questionnaire is delivered during a Deferral
Period, (as defined below) the Company shall so inform the Holder delivering
such Notice and Questionnaire and shall take the actions set forth in clauses
(i), (ii) and (iii) above upon expiration of the Deferral Period in accordance
with Section III(B); provided, further, that if under applicable law the
Companies have more than one option as to the type or manner of making any such
filing, as set forth in an opinion of nationally recognized counsel experienced
in such matters delivered by the Holder to the Company and Support Provider,
they will make the required filing or filings in the manner or of a type that is
reasonably expected to result in the earliest availability of the prospectus for
effecting resales of Registrable Securities. The term "Deferral Period" means
the period during which the availability of the Shelf Registration Statement and
any prospectus is suspended. Notwithstanding anything contained herein to the
contrary, the Company and Support Provider shall be under no obligation to
name any Holder that is not a Notice Holder as a selling securityholder in the Shelf Registration Statement (or any Subsequent Shelf Registration Statement) or related prospectus; provided, however, that any Holder that becomes a Notice Holder pursuant to the provisions of this Section of this Agreement (whether or not such Holder was a Notice Holder at the time the Shelf Registration Statement was initially declared effective) shall be named as a selling securityholder in the Shelf Registration Statement (or any Subsequent Shelf Registration Statement) or related prospectus subject to and in accordance with the requirements of this Section.
II. LIQUIDATED DAMAGES.
A. The parties hereto agree that the Holders of Registrable
Securities will suffer damages if the Company and the Support Provider fail to
fulfill their obligations under Section I, and that it would not be feasible to
ascertain the extent of such damages. Accordingly, if (i) the Initial Shelf
Registration Statement is not filed with the Commission on or prior to the Shelf
Filing Deadline Date, (ii) the Initial Shelf Registration Statement is not
declared effective on or prior to the Effectiveness Deadline Date, or (iii) the
aggregate duration of Deferral Periods in any period exceeds the number of days
permitted in respect of such period pursuant to Section III(B) hereof (each such
event referred to in clauses (i) through (iii), a "Registration Default"), the
Company and the Support Provider will be jointly and severally obligated to pay
as liquidated damages and not as a penalty an amount payable on each May 15 and
November 15 (each a "Damages Payment Date") to each Record Holder (as defined
below) of Registrable Securities accruing during the period of one or more such
Registration Defaults at a rate per annum equal to .25% of the Applicable
Principal Amount of such Securities and the Applicable Conversion Price (as
defined below) of such shares of Underlying Shares that have been issued upon
conversion of the Securities and are outstanding and held by such Holder until
(i) the Initial Shelf Registration Statement is filed, (ii) the Initial Shelf
Registration Statement becomes effective or (iii) the Deferral Period that
caused the limit on the aggregate duration of Deferral Periods in a period as
set forth in Section III(B) to be exceeded is terminated; provided that any
liquidated damages accrued with respect to any Security or portion thereof
called for redemption on a redemption date or converted into underlying common
shares on a conversion date prior to the Damages Payment Date shall, in any
event, be paid instead to the Holder who submitted such Security or portion
thereof for redemption or conversion. Liquidated damages shall only accrue while
there exists one or more Registration Defaults. As used herein, the following
terms shall have the following meanings: "Applicable Conversion Price" means, as
of any date of determination, the Applicable Principal Amount as of such date of
determination divided by the Conversion Rate in effect as of such date of
determination or, if no Securities are then outstanding, the Conversion Rate
that would be in effect were Securities then outstanding.
"Applicable Principal Amount" means, as of any date of determination, with respect to each Security the sum of the initial issue price of such Security ($551.26) plus accrued interest plus accrued and unpaid cash interest, if any, as of (i) May 15 preceding any date of determination between May 15 and November 15 of the same calendar year or (ii) as of November 15 preceding any date of determination prior to May 15 of the following calendar year or (iii) as of such date of determination if a date of determination is May 15 or November 15; provided if no Securities are then outstanding, such sum shall be calculated as if such Securities were then outstanding. "Conversion Rate" shall have the meaning assigned such term in the Indenture. "Record Holder" means the Holder of Registrable Securities on the 1st day of May or November, as the case may be, immediately preceding a Damages Payment Date or, in the event that a
Registration Default is cured, the registered Holder on the date of such cure. Notwithstanding anything to the contrary in this Section II(A), neither the Company nor the Support Provider shall be required to pay liquidated damages to a Holder of Registrable Securities if such Holder failed to provide the information required to be provided by it in the Notice and Questionnaire and, if any, pursuant to Section IV(M).
B. The Company shall notify the Trustee and the Conversion Agent under the Indenture immediately upon the happening of each and every Registration Default. The Company and the Support Provider shall pay the liquidated damages due on the Registrable Securities by depositing with the Conversion Agent (which may not be the Company for these purposes), in trust, for the benefit of the Holders thereof, prior to 10:00 a.m., New York City time, on each Damages Payment Date, sums sufficient to pay the liquidated damages then due. Each obligation to pay liquidated damages shall be deemed to accrue from and including the date of the applicable Registration Default.
C. The parties hereto agree that the liquidated damages provided for in this Section II constitutes a reasonable estimate of and is intended to constitute the sole damages that will be suffered by Holders of Registrable Securities by reason of the failure of (i) the Shelf Registration Statement to be filed, (ii) the Shelf Registration Statement to remain effective or (iii) an Additional Registration Statement to be filed and remain effective, in each case to the extent required by this Agreement.
III. Registration Procedures. In connection with any Shelf Registration Statement, the following provisions shall apply:
A. The Company shall furnish to counsel for the Initial Purchasers, prior to the filing thereof with the Commission, a copy of any Shelf Registration Statement and each amendment thereof and each supplement, if any, to the prospectus included therein and shall use its reasonable best efforts to reflect in each such document, when so filed with the Commission, such comments as such counsel may reasonably propose.
B. The Company shall advise counsel for the Initial Purchasers and the Notice Holders (if applicable) and, if requested by any such person, confirm such advice in writing (which advice pursuant to clauses (i)-(v) hereof shall be accompanied by an instruction to suspend the use of the prospectus (a "Deferral Notice") until the requisite changes have been made):
i. when any Shelf Registration Statement and any amendment thereto has been filed with the Commission and when such Shelf Registration Statement or any post-effective amendment thereto has become effective;
ii. of any request by the Commission for amendments or supplements to any Shelf Registration Statement or the prospectus included therein or for additional information;
iii. of the issuance by the Commission of any stop order suspending the effectiveness of any Shelf Registration Statement or the initiation of any proceedings for that purpose;
iv. of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and
v. of the happening of any event that requires the making of any changes in any Shelf Registration Statement or the prospectus included therein in order that the statements therein are not misleading and do not omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.
A Deferral Period shall, without the Company and the Support Provider incurring
any obligation to pay liquidated damages, not exceed forty-five (45) days in any
three (3) month period or more than one hundred twenty (120) days in any twelve
(12) month period.
C. The Company and the Support Provider will make every reasonable effort to obtain the withdrawal at the earliest possible time of any order suspending the effectiveness of any Shelf Registration Statement.
D. The Company will furnish to each Holder of Registrable Securities included within the coverage of any Shelf Registration Statement, without charge, at least one conformed copy of such Shelf Registration Statement and any post-effective amendment thereto, including financial statements and schedules and, if any such Holder so requests in writing, all exhibits thereto (including those, if any, incorporated by reference).
E. The Company will, during the Shelf Registration Period, promptly deliver to each Holder of Registrable Securities included within the coverage of any Shelf Registration Statement, without charge, as many copies of the prospectus (including each preliminary prospectus) included in such Shelf Registration Statement and any amendment or supplement thereto as such Holder may reasonably request; and the Company consents to the use of such prospectus or any amendment or supplement thereto by each of the selling Holders of Registrable Securities in connection with the offer and sale of the Registrable Securities covered by such prospectus or any amendment or supplement thereto.
F. The Company will, during the Shelf Registration Period, promptly deliver to the Initial Purchasers, and such other persons that are required to deliver a prospectus, without charge, as many copies of the final prospectus included in any Shelf Registration Statement and any amendment or supplement thereto as the Initial Purchasers, or other persons may reasonably request; and the Company and the Support Provider consent to the use of such prospectus or any amendment or supplement thereto by the Initial Purchasers, or other persons, as applicable, as aforesaid.
G. Prior to the effective date of any Shelf Registration Statement, the Company and the Support Provider will use their reasonable best efforts to register or qualify, or cooperate with the Holders of Registrable Securities included therein and their respective counsel in connection with the registration or qualification of, such Securities for offer and sale under the securities or blue sky laws of such jurisdictions as any such Holder reasonably requests in writing and do any and all other acts or things necessary or advisable to enable the offer and sale in such jurisdictions of the Registrable Securities covered by such Shelf Registration Statement; provided that neither
the Company nor the Support Provider will be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to general service of process or to taxation in any such jurisdiction where it is not then so subject.
H. The Company and the Support Provider will cooperate with the Holders of Registrable Securities to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold pursuant to any Shelf Registration Statement free of any restrictive legends and in such denominations and registered in such names as the Holders thereof may request in writing prior to sales of Registrable Securities pursuant to such Shelf Registration Statement.
I. If any event contemplated by Section III(B)(ii) through (v) occurs during the period for which the Company and the Support Provider are required to maintain an effective Shelf Registration Statement, the Company will promptly prepare and file with the Commission a post-effective amendment to the Shelf Registration Statement or a supplement to the related prospectus or file any other required document so that, as thereafter delivered to purchasers of the Registrable Securities from a Holder, the prospectus will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that in the case of any event contemplated by Section III(B)(v) the Company and the Support Provider may in their discretion defer taking such action subject to the liquidated damage provisions set forth in Section II hereof in the event that the aggregate duration of the Deferral Period exceeds the limit on the aggregate duration of a Deferral Period in a period set forth in Section III(B).
J. Not later than the effective date of the applicable Shelf Registration Statement, the Company will provide a CUSIP number for each of the Registrable Securities and provide the applicable trustee with printed certificates for each series of Securities in a form eligible for deposit with The Depository Trust Company.
L. The Company and the Support Provider will cause the Indenture to be qualified under the Trust Indenture Act as required by applicable law in a timely manner.
M. The Company may require each Holder of Registrable Securities to be registered pursuant to any Shelf Registration Statement to furnish to the Company such information concerning the Holder and the distribution of such Registrable Securities as the Company may from time to time reasonably require for inclusion in such Shelf Registration Statement, and the Company may exclude from such registration the Registrable Securities of any Holder that fails to furnish such information within a reasonable time after receiving such request.
N. Each Holder of Registrable Securities to be registered pursuant to a Shelf Registration Statement agrees by acquisition of such Registrable Securities that, upon receipt of any notice from the Company pursuant to Section III(B)(ii) through (v), such Holder will discontinue disposition of such Registrable Securities until such Holder's receipt of copies of the supplemental or amended prospectus contemplated by Section III(I) or until advised in writing (the "Advice") by the Company that the use of the applicable prospectus may be resumed.
O. The Company and the Support Provider shall enter into such customary agreements (including, if requested, an underwriting agreement in customary form) and take all such other action, if any, as Holders of a majority in aggregate principal amount of the Registrable Securities being sold or the managing underwriters (if any) shall reasonably request in order to facilitate any disposition of Registrable Securities pursuant to a Shelf Registration Statement.
P. The Company and the Support Provider shall use their reasonable efforts to cause the shares of Verizon Common Stock issuable upon conversion of the Notes to be listed on the New York Stock Exchange.
Q. Upon (i) the filing of the Initial Shelf Registration Statement and
(ii) the effectiveness of the Initial Shelf Registration Statement, the Company
and the Support Provider shall announce the same, in each case by release to
Reuters Economic Service and Bloomberg Business News.
R. The Company and Support Provider shall (i) make reasonably available for inspection by a representative of, and Special Counsel (as defined below) acting for, Holders of a majority in aggregate principal amount of the Registrable Securities being sold and any underwriter participating in any disposition of Registrable Securities pursuant to a Shelf Registration Statement, all relevant financial and other records, pertinent corporate documents and properties of the Company and Support Provider and each of their respective subsidiaries to the same extent the Company and Support Provider would customarily make such information available in the context of due diligence for an underwritten public offering and (ii) use its reasonable best efforts to have its officers, directors, employees, accountants and counsel supply all relevant information reasonably requested by such representative, Special Counsel or any such underwriter (an "Inspector") in connection with the preparation of such Shelf Registration Statement.
S. The Company shall if requested by Holders of a majority in aggregate principal amount of the Registrable Securities being sold, their Special Counsel or the managing underwriters (if any) in connection with any Shelf Registration Statement, use its reasonable best efforts to cause (i) its counsel to deliver an opinion relating to such Shelf Registration Statement, the Registrable Securities, if any, in customary form, (ii) its officers to execute and deliver all customary documents and certificates requested by Holders of a majority in aggregate principal amount of the Registrable Securities being sold, their Special Counsel or the managing underwriters (if any) and (iii) its independent public accountants to provide a comfort letter or letters in customary form, subject to receipt of appropriate documentation as contemplated, and only if permitted, by Statement of Auditing Standards No. 72.
IV. Registration Expenses
. The Company and the Support Provider will bear all expenses incurred in connection with the performance of its obligations under Sections I, II, and III, including the expenses of counsel to the Company. The Initial Purchasers will bear expenses of counsel to the Initial Purchasers and the Holders will bear the expenses of counsel to the Holders, which may be the same firm that is acting as counsel to the Initial Purchasers (the "Special Counsel").
V. Indemnification.
A. The Company and the Support Provider shall jointly and severally indemnify and hold harmless each Holder (including, without limitation, the Initial Purchasers), its affiliates, their respective officers, directors, employees, representatives and agents, and each person, if any, who controls such Holder within the meaning of the Act or the Exchange Act (collectively referred to for purposes of this Section V and Section VI as a Holder) from and against any loss, claim, damage or liability, joint or several, or any action in respect thereof (including, without limitation, any loss, claim, damage, liability or action relating to purchases and sales of Registrable Securities), to which that Holder may become subject, whether commenced or threatened, under the Act, the Exchange Act, any other federal or state statutory law or regulation, at common law or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in any such Shelf Registration Statement or any prospectus forming part thereof or in any amendment or supplement thereto or (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, and shall reimburse each Holder promptly upon demand for any legal or other expenses reasonably incurred by that Holder in connection with investigating or defending or preparing to defend against or appearing as a third party witness in connection with any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that the Company and the Support Provider shall not be liable in any such case to the extent that any such loss, claim, damage, liability or action arises out of, or is based upon, an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with any Holders' Information; and provided, further, that with respect to any such untrue statement in or omission from any related preliminary prospectus, the indemnity agreement contained in this Section V(A) shall not inure to the benefit of any Holder from whom the person asserting any such loss, claim, damage, liability or action received Registrable Securities to the extent that such loss, claim, damage, liability or action of or with respect to such Holder results from the fact that both (A) a copy of the final prospectus was not sent or given to such person at or prior to the written confirmation of the sale of such Registrable Securities to such person and (B) the untrue statement in or omission from the related preliminary prospectus was corrected in the final prospectus unless, in either case, such failure to deliver the final prospectus was a result of non-compliance by the Company with Section III(D), III(E), III(F) or III(G).
B. Each Holder shall indemnify and hold harmless the Company, the
Support Provider and their respective affiliates, their respective officers,
directors, employees, representatives and agents, and each person, if any, who
controls the Company or the Support Provider within the meaning of the Act or
the Exchange Act (collectively referred to for purposes of this Section V(B) and
Section VI as the "Company"), from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the Company may become subject, whether commenced or threatened, under the Act, the Exchange Act, any other federal or state statutory law or regulation, at common law or otherwise, insofar as such loss, claim, damage, liability or action arises out of, or is based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in any Shelf Registration Statement or any prospectus forming part thereof or in any amendment or supplement thereto or (ii) the omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, but in each case only to the extent that the untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with any Holders' Information furnished to the Company by such Holder, and shall reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending or preparing to defend against or appearing as a third party witness in connection with any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that no such Holder shall be liable for any indemnity claims hereunder in excess of the amount of net proceeds received by such Holder from the sale of Registrable Securities, pursuant to such Shelf Registration Statement.
C. Promptly after receipt by an indemnified party under this Section V of notice of any claim or the commencement of any action, the indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party pursuant to Section V(A) or V(B), notify the indemnifying party in writing of the claim or the commencement of that action; provided, however, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have under this Section V except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify the indemnifying party shall not relieve it from any liability which it may have to an indemnified party otherwise than under this Section V. If any such claim or action shall be brought against an indemnified party, and it shall notify the indemnifying party thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it wishes, jointly with any other similarly notified indemnifying party, to assume the defense thereof with counsel reasonably satisfactory to the indemnified party. After notice from the indemnifying party to the indemnified party of its election to assume the defense of such claim or action, the indemnifying party shall not be liable to the indemnified party under this Section V for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense thereof other than the reasonable costs of investigation; provided, however, that an indemnified party shall have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel for the indemnified party will be at the expense of such indemnified party unless (1) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (2) the indemnified party has reasonably concluded (based upon advice of counsel to the indemnified party) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (3) a conflict or potential conflict exists (based upon advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party) or (4) the indemnifying party has not in fact employed counsel reasonably satisfactory to the indemnified party to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the
expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm of attorneys (in addition to any local counsel) at any one time for all such indemnified party or parties. Each indemnified party, as a condition of the indemnity agreements contained in Sections V(A) and V(B), shall use all reasonable efforts to cooperate with the indemnifying party in the defense of any such action or claim. No indemnifying party shall be liable for any settlement of any such action effected without its written consent (which consent shall not be unreasonably withheld), but if settled with its written consent or if there be a final judgment for the plaintiff in any such action, the indemnifying party agrees to indemnify and hold harmless any indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party (which consent shall not be unreasonably withheld), effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding.
VI. Contribution. If the indemnification provided for in Section V is
unavailable or insufficient to hold harmless an indemnified party under Section
V(A) or V(B), then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the relative
benefits received by the Company and the Support Provider from the offering and
sale of the Securities, on the one hand, and a Holder with respect to the sale
by such Holder of Registrable Securities, on the other, or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Support Provider on the one hand and such Holder on the other with respect
to the statements or omissions that resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Support
Provider on the one hand and a Holder on the other with respect to such offering
and such sale shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Securities (before deducting expenses),
received by or on behalf of the Company, on the one hand, bear to the total
proceeds received by such Holder with respect to its sale of Registrable
Securities, on the other. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to the Company and the Support Provider or information supplied by the
Company and the Support Provider on the one hand or to any Holders' Information
supplied by such Holder on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The parties hereto agree that it would not be
just and equitable if contributions pursuant to this Section VI were to be
determined by pro rata allocation or by any other method of allocation that does
not take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section VI shall be deemed to include, for purposes of this Section VI, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending or preparing to defend any such
action or claim. Notwithstanding the provisions of this Section VI, an indemnifying party that is a Holder of Registrable Securities shall not be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities sold by such indemnifying party to any purchaser exceeds the amount of any damages which such indemnifying party has otherwise paid or become liable to pay by reason of any untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
VII. Rules 144 and 144A. The Support Provider shall use its reasonable best efforts to file the reports required to be filed by it under the Act and the Exchange Act in a timely manner and, if at any time the Support Provider is not required to file such reports, it will, upon the written request of any Holder of Registrable Securities, make publicly available other information so long as necessary to permit sales of such Holder's securities pursuant to Rules 144 and 144A. The Company and the Support Provider covenant that they will take such further action as any Holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Act within the limitation of the exemptions provided by Rules 144 and 144A (including, without limitation, the requirements of Rule 144A(d)(4)). Upon the written request of any Holder of Registrable Securities, the Company and the Support Provider shall deliver to such Holder a written statement as to whether they have complied with such requirements. Notwithstanding the foregoing, nothing in this Section VII shall be deemed to require the Company to register any of its securities pursuant to the Exchange Act.
VIII. Miscellaneous.
A. Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given as to the Registrable Securities unless the Company has obtained the written consent of Holders of a majority in aggregate principal amount of the Registrable Securities, taken as a single class. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of Holders whose Registrable Securities are being sold pursuant to a Shelf Registration Statement and that does not directly or indirectly affect the rights of other Holders may be given by Holders of a majority in aggregate principal amount of the Registrable Securities, being sold by such Holders pursuant to such Shelf Registration Statement.
B. Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail, telecopier or air courier guaranteeing next-day delivery:
(1) if to a Holder, at the most current address given by such Holder to the Company in accordance with the provisions of this Section IX(B), which address initially is, with respect to each Holder, the address of such Holder maintained by the Registrar under the Indenture, with a copy in like manner to the Initial Purchasers;
(2) if to Goldman, Sachs & Co., initially at 85 Broad Street New York, New York 10004, Attention: Roger Matthews;
(3) if to Credit Suisse First Boston Corporation, initially at 11 Madison Avenue New York, New York 10010, Attention: Joseph Fashino;
(4) if to the Company, initially at Verizon Global Funding Corp., Attention Janet M. Garrity, President and Treasurer, 3900 Washington Street2nd Floor, Wilmington, DE 19802; and
(5) if to the Support Provider, initially at Verizon Communications Inc., Attention William F. Heitmann, Senior Vice President and Treasurer, 1095 Avenue of the Americas, New York, New York 10036
All such notices and communications shall be deemed to have been duly given: when delivered by hand, if personally delivered; one business day after being delivered to a next-day air courier; five business days after being deposited in the mail; and when receipt is acknowledged by the recipient's telecopier machine, if sent by telecopier.
C. Successors And Assigns. This Agreement shall be binding upon the Company, the Support Provider and their respective successors and assigns.
D. Counterparts. This Agreement may be executed in any number of counterparts (which may be delivered in original form or by telecopier) and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.
E. Definition of Terms. For purposes of this Agreement, (a) the term "business day" means any day on which the New York Stock Exchange, Inc. is open for trading, (b) the term "subsidiary" has the meaning set forth in Rule 405 under the Act and (c) except where otherwise expressly provided, the term "affiliate" has the meaning set forth in Rule 405 under the Act.
F. Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.
G. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.
H. Remedies. In the event of a breach by the Company or the Support Provider or by any Holder of any of their respective obligations under this Agreement, each Holder or the Company or the Support Provider, as the case may be, in addition to being entitled to exercise all rights granted by law, including recovery of damages (other than the recovery of damages for a breach by the Company or the Support Provider of their obligations under Section I hereof for which liquidated damages have been paid pursuant to Section II hereof), will be entitled to specific performance of its rights under this Agreement. The Company, the Support Provider and each Holder agree that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further
agree that, in the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would be adequate.
I. No Inconsistent Agreements. Each of the Company and the Support Provider represents, warrants and agrees that (i) it has not entered into, shall not, on or after the date of this Agreement, enter into any agreement that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof, (ii) it has not previously entered into any agreement which remains in effect granting any registration rights with respect to any of its debt securities to any person and (iii) without limiting the generality of the foregoing, without the written consent of the Holders of a majority in aggregate principal amount of the then outstanding Registrable Securities, it shall not grant to any person the right to request the Company to register any debt securities of the Company under the Act unless the rights so granted are not in conflict or inconsistent with the provisions of this Agreement.
J. No Piggyback on Registrations. No security holders of the Company (other than the Holders of Registrable Securities in such capacity) shall have the right to include any securities of the Company in any Shelf Registration Statement other than Registrable Securities.
K. Severability. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their reasonable best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
Please confirm that the foregoing correctly sets forth the agreement among the Company, the Support Provider and the Initial Purchasers.
Very truly yours,
VERIZON GLOBAL FUNDING CORP.
By /s/ Janet M. Garrity
_______________________________________
Name: Janet M. Garrity
Title President and Treasurer
|
VERIZON COMMUNICATIONS INC.
By /s/ William F. Heitman
_______________________________________
Name: William F. Heitmann
Title: Senior Vice President and
Treasurer
|
Accepted:
GOLDMAN, SACHS & CO.
By /s/ Goldman, Sachs & Co.
__________________________________
Name:
Title:
|
CREDIT SUISSE FIRST BOSTON CORPORATION
By /s/ William Ettelson
__________________________________
Name: William Ettelson
Title: Director
|
EXHIBIT 4.4
SUPPORT AGREEMENT
BETWEEN
VERIZON COMMUNICATIONS INC.
AND
VERIZON GLOBAL FUNDING CORP.
This Agreement, made and entered into as of October 31, 2000, by and between Verizon Communications Inc., a Delaware corporation ("Parent"), and Verizon Global Funding Corp., a Delaware corporation ("Subsidiary").
WITNESSSETH:
WHEREAS, Parent is directly or indirectly the owner of 100% of the outstanding common stock of Subsidiary; and
WHEREAS, Subsidiary has incurred, and from time to time will incur,
indebtedness through (a) the public and non-public debt markets, (b) the
issuance of commercial paper, (c) bank credit facilities, (d) negotiated loans,
(e) foreign exchange transactions or financial derivative agreements, (f) bid
and performance bonds or financial agreements in respect of the activities of
affiliates and subsidiaries of Verizon Investments Inc. and (g) structured
transactions involving the issuance, repurchase or guarantee of the equity
instruments of subsidiaries of the Parent (including any required capitalization
of such subsidiaries) where the proceeds received from such structured
transactions would be considered indebtedness for U.S. income tax purposes (all
such debt instruments, loans, commercial paper, bank agreements, foreign
exchange transactions, derivative agreements, bid and performance bonds,
financial guarantees and other instruments that would be considered indebtedness
for U.S. income tax purposes being hereinafter referred to as "Debt"), thereby
incurring indebtedness to parties other than Parent and its affiliates; and
WHEREAS, in order to enhance and maintain the financial condition of Subsidiary to enhance its ability to issue Debt, Parent and Subsidiary from time to time have entered into support agreements, including a Support Agreement dated as of April 3, 1998 (the "1998 Support Agreement"); and
WHEREAS, Parent and Subsidiary desire to amend and restate the 1998 Support Agreement in its entirety as hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties hereto agree that the 1998 Support Agreement shall be amended and restated in its entirety as follows:
1. Stock Ownership. During the term of this Agreement, Parent will own directly or indirectly all of the voting capital stock of Subsidiary now or hereafter issued and outstanding.
2. Net Worth. During the term of this Agreement, Parent shall cause Subsidiary to maintain at all times a positive tangible net worth, as determined in accordance with generally accepted accounting principles.
3. Liquidity Provision. If, during the term of this Agreement, Subsidiary requires funds to make timely payment of interest, principal or premium, if any, on any Debt, and such funds are not obtainable by Subsidiary from other sources on commercially reasonable terms, Parent shall provide to Subsidiary, at its request, such funds either as equity or as a loan, at Parent's option, to assure that the Subsidiary will be able to pay such principal, interest and premium, if any, when due. If such funds are advanced to Subsidiary as a loan, such loan shall be on such terms and conditions, including maturity and rate of interest, as Parent and Subsidiary shall agree. Notwithstanding the foregoing, any such loan shall be subordinated in all respects to any and all Debt, whether or not such Debt is outstanding at the time of such loan.
4. Waivers. Parent hereby waives any failure or delay on the part of Subsidiary in asserting or enforcing any of its right or in making any claims or demands hereunder.
5. Rights of Lender. Except as may be provided in any indenture or agreement pursuant to which Debt is issued, any Lender (defined below) shall have the right to proceed directly against Parent without first proceeding against Subsidiary to enforce Subsidiary's rights under paragraphs 1, 2 and 3 of this Agreement or to obtain payment of any defaulted interest, principal or premium owed to such Lender. However, in no event may any Lender, on default by Parent or Subsidiary under the terms of the indenture or other agreement pursuant to which Debt is issued, or upon failure to comply with this Agreement by Parent or Subsidiary, have recourse to or against the stock or assets of Verizon Services Corp., Telecom Corporation of New Zealand Limited or any operating telephone company which may from time to time be owned directly or indirectly by Parent. The Term "Lender", as used in this Agreement, shall mean any Person, firm or corporation to which Subsidiary is indebted for the Debt or which is acting as trustee or authorized representative with respect to the Debt on behalf of such person, firm or corporation.
6. Termination: Amendment. This Agreement may be modified or amended in a manner that adversely affects the rights of the holders of Debt only if all Lenders consent in advance and in writing to such modification or amendment. No modification or amendment to this Agreement relating to the provisions set forth in paragraphs 1, 2, 3 or 5 or this sentence shall be made unless Subsidiary applies to the Securities and Exchange Commission for an amended order relating to such modifications or amendment, and the Commission grants such amended order. This Agreement may be terminated by either the Parent or the Subsidiary by notice to the other party, provided that such termination shall be effective only after all outstanding Debt issued by the Subsidiary is paid in full.
7. Notice. Any notice, instruction, request, consent, demand or other communication required or contemplated by this Agreement to be in writing, shall be given or made or communicated by United States first class mail, addressed as follows:
If to Parent; Verizon Communications Inc.
1095 Avenue of the Americas
New York, New York 10036
|
Attention: Senior Vice President and Treasurer
If to Subsidiary: Verizon Global Funding Corp.
3900 Washington Street, 2nd Floor
Wilmington, Delaware 19802
Attention: President and Treasurer
|
8. Successors. The covenants, representations, warranties and agreements herein set forth shall be mutually binding upon, and inure to the mutual benefit of, -Parent and its successors, Subsidiary and its successors and Lenders from time to time.
9. Governing Law: Counterparts. This Agreement shall be governed by the laws of the State of New York. This instrument may be executed in counterparts and the executed counterparts shall together constitute one instrument.
IN WITNESS WHEREOF, the parties have set their hands and affixed their corporate seals as of the day and year first above written.
ATTEST: VERIZON COMMUNICATIONS INC.
By: /s/ Robert W. Erb By: /s/ William F. Heitman
__________________ ______________________
Assistant Secretary Senior Vice President and Treasurer
(SEAL)
ATTEST: VERIZON GLOBAL FUNDING CORP.
By: /s/ Robert W. Erb By: /s/ Janet M. Garrity
__________________ ______________________
Secretary President and Treasurer
|
(SEAL)
EXHIBIT 4.5
SHARE CONTRIBUTION AGREEMENT
BETWEEN
VERIZON COMMUNICATIONS INC.
AND
VERIZON GLOBAL FUNDING CORP.
This Agreement, made and entered into as of May 15, 2001, by and between Verizon Communications Inc., a Delaware corporation ("Parent"), and Verizon Global Funding Corp., a Delaware corporation ("Subsidiary").
WITNESSETH
WHEREAS, Parent is directly or indirectly the owner of 100% of the outstanding common stock of Subsidiary; and
WHEREAS, Subsidiary intends to issue U.S. $5,442,079,000 aggregate principal amount at maturity of its Zero Coupon Convertible Notes due 2021 together with up to an additional U.S. $816,311,000 aggregate principal amount of maturity of its Zero Coupon Convertible Notes due 2021 issuable upon the exercise of an option granted the Initial Purchasers named in the Purchase Agreement among Parent, Subsidiary and the Initial Purchasers named therein dated May 9, 2001 (collectively, the "Notes") convertible into common shares, par value $.10 per share, of the Parent (the "Underlying Shares"); and
WHEREAS, in order facilitate the issuance of the Notes and enable Subsidiary to deliver the Underlying Shares upon conversion of the Notes;
NOW, THEREFORE, in consideration of the mutual promises herein contained, the parties hereto agree as follows:
1. Stock Ownership. During the term of this Agreement, Parent will own directly or indirectly all of the voting capital stock of Subsidiary now or hereafter issued and outstanding.
2. Share Contribution. If, during the term of this Agreement, Subsidiary is required to deliver the Underlying Shares to Holders (as defined below) of the Notes upon conversion of the Notes pursuant to the indenture under which the Notes are issued, Parent shall provide to Subsidiary, at its request, such number of shares of common stock of Parent as equity to satisfy the conversion requirements under the Notes.
3. Waivers. Parent hereby waives any failure or delay on the part of Subsidiary in asserting or enforcing any of its right or in making any claims or demands hereunder.
4. Rights of Holders. Except as may be provided in the indenture pursuant to which the Notes are issued, any Holder shall have the right to proceed directly against Parent without first proceeding against Subsidiary to enforce Subsidiary's rights under paragraphs 1 and 2 of this Agreement or to obtain delivery of any Underlying Shares owed to such Holder upon conversion of the Notes. The term "Holder", as used in this Agreement, shall mean any person, firm or corporation to which Subsidiary is indebted for the Notes or which is acting as trustee or authorized representative with respect to the Notes on behalf of such person, firm or corporation.
5. Termination; Amendment. This Agreement may be modified or amended in a manner that adversely affects the rights of the Holders of Debt only if all Holders consent in advance and in writing to such modification or amendment. This Agreement may be terminated by either Parent or Subsidiary by notice to the other party, provided that such termination shall be effective only after all outstanding Notes issued by Subsidiary are paid in full.
7. Notices. Any notice, instruction, request, consent, demand or other communication required or contemplated by this Agreement to be in writing, shall be given or made or communicated by United States first class mail, addressed as follows:
If to Parent; Verizon Communications Inc.
1095 Avenue of the Americas
New York, New York 10036
Attention: Senior Vice President and Treasurer
If to Subsidiary: Verizon Global Funding Corp.
3900 Washington Street, 2nd Floor
Wilmington, Delaware 19802
Attention: President and Treasurer
|
8. Successors. The covenants, representations, warranties and agreements herein set forth shall be mutually binding upon, and inure to the mutual benefit of, Parent and its successors, Subsidiary and its successors and Holders from time to time.
9. Governing Law; Counterparts. This Agreement shall be governed by the laws of the State of New York. This instrument may be executed in counterparts and the executed counterparts shall together constitute one instrument.
IN WITNESS WHEREOF, the parties have set their hands and affixed their corporate seals as of the day and year first above written.
VERIZON COMMUNICATIONS INC.
By: /s/ William F. Heitman ______________________________________ Senior Vice President and Treasurer |
VERIZON GLOBAL FUNDING CORP.
By: /s/ Janet M. Garrity ______________________________________ Vice President and Treasurer |
EXHIBIT 5
August 13, 2001
Verizon Communications Inc.
1095 Avenue of the Americas
New York, New York 10036
Verizon Global Funding Corp.
3900 Washington Avenue
Wilmington, Delaware 19802
Ladies and Gentlemen:
I have examined the Registration Statement of Verizon Global Funding Corp. (the "Company") and Verizon Communications Inc. ("Verizon") on Form S-3 under the Securities Act of 1933, as amended, and the accompanying Prospectus pertaining to the offer and sale by the selling holders named or to be named therein of up to $5,442,079,000 aggregate principal amount at maturity of the Company's Zero Coupon Convertible Notes due 2021 (the "Notes") and the shares of common stock of Verizon issuable upon conversion of the Notes (the "Verizon Common Stock"). The Notes are supported as to payment of principal and interest, if any, pursuant to the terms of a Support Agreement dated as of October 31, 2000 between the Company and Verizon (the "Support Agreement"). In addition, the Company and Verizon have entered into a Share Contribution Agreement dated as of May 15, 2001 (the "Share Contribution Agreement"). The Registration Statement also covers the Support Agreement and Share Contribution Agreement.
I have also examined each of the Company's and Verizon's Restated Certificate of Incorporation, as amended, and such corporate records and other documents as I have deemed necessary to enable me to express the opinions set forth below. I am familiar with the proceedings taken by you or proposed to be taken by you under my supervision as your counsel in connection with the issuance of the Notes, the Verizon Common Stock, the Support Agreement and the Share Contribution Agreement.
It is my opinion that:
1. the Notes have been legally and validly issued and are binding obligations of the Company;
2. when issued and delivered upon conversion of the Notes as contemplated in
Verizon Communications Inc.
Verizon Global Funding Corp.
the Registration Statement, the Verizon Common Stock will be validly issued, fully paid and nonassessable; and
3. each of the Support Agreement and Share Contribution Agreement is a legal and validly binding obligation of the Company and Verizon.
I hereby consent to the reference to me under the caption "Legal Matters" in the Prospectus forming a part of the Registration Statement and to the filing of this opinion as an exhibit to the Registration Statement.
Very truly yours,
/s/ William P. Barr |
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the Registration Statement on Form S-3 and related Prospectus of Verizon Communications Inc. and Verizon Global Funding Corp. for the registration of $5,442,079,000 principal amount at maturity of Zero Coupon Convertible Notes due 2021, and to the incorporation by reference therein of our report dated February 1, 2001, with respect to the consolidated financial statements and financial statement schedule of Verizon Communications Inc. included in its Annual Report (Form 10-K) for the year ended December 31, 2000, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP New York, New York August 13, 2001 |
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration Statement on Form S-3 of Verizon Communications Inc. and Verizon Global Funding Corp. (a wholly-owned subsidiary of Verizon Communications Inc.) of our report dated February 14, 2000, except as to the pooling-of-interests with GTE Corporation, which is as of June 30, 2000, on our audits of the consolidated financial statements and financial statement schedule of Verizon Communications Inc. and its subsidiaries as of December 31, 1999 and for each of the two years in the period ended December 31, 1999, which appears in the Verizon Communications Annual Report on Form 10-K for the year ended December 31, 2000. We also consent to the reference to us under the heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP New York, New York August 13, 2001 |
Exhibit 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by reference in this Registration Statement on Form S-3 by Verizon Communications Inc. and Verizon Global Funding Corp. (a wholly-owned subsidiary of Verizon Communications Inc.) of our report dated June 30, 2000, on GTE Corporation as of December 31, 1999, and for each of the two years in the period ended December 31, 1999, and to all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP Dallas, Texas August 13, 2001 |
EXHIBIT 24.1
POWER OF ATTORNEY
WHEREAS, VERIZON GLOBAL FUNDING CORP., a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, a resale shelf registration statement on Form S-3 (the "Registration Statement") relating to its Zero-Coupon Convertible Notes due 2021, the shares of the Verizon Communications Inc.'s common stock into which such notes are convertible and the related support and share contribution obligations of Verizon Communications Inc.
NOW, THEREFORE, the undersigned hereby appoints William F. Heitmann, Janet M. Garrity, and David S. Kauffman and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to the Registration Statement, and to file the same, with all exhibits thereto and all documents in connection therewith, making such changes in the Registration Statement as such person or persons so acting deems appropriate, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 13th day of August, 2001.
/s/ Robert S. Fitmire ____________________________ Robert S. Fitzmire |
POWER OF ATTORNEY
WHEREAS, VERIZON GLOBAL FUNDING CORP., a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, a resale shelf registration statement on Form S-3 (the "Registration Statement") relating to its Zero-Coupon Convertible Notes due 2021, the shares of the Verizon Communications Inc.'s common stock into which such notes are convertible and the related support and share contribution obligations of Verizon Communications Inc.
NOW, THEREFORE, the undersigned hereby appoints William F. Heitmann, David S. Kauffman and Robert S. Fitzmire and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to the Registration Statement, and to file the same, with all exhibits thereto and all documents in connection therewith, making such changes in the Registration Statement as such person or persons so acting deems appropriate, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 13th day of August, 2001.
/s/ Janet M. Garrity __________________________ Janet M. Garrity |
POWER OF ATTORNEY
WHEREAS, VERIZON GLOBAL FUNDING CORP., a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, a resale shelf registration statement on Form S-3 (the "Registration Statement") relating to its Zero-Coupon Convertible Notes due 2021, the shares of the Verizon Communications Inc.'s common stock into which such notes are convertible and the related support and share contribution obligations of Verizon Communications Inc.
NOW, THEREFORE, the undersigned hereby appoints Janet M. Garrity, David S. Kauffman and Robert S. Fitzmire and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to the Registration Statement, and to file the same, with all exhibits thereto and all documents in connection therewith, making such changes in the Registration Statement as such person or persons so acting deems appropriate, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 13th day of August, 2001.
/s/ William F. Heitmann _____________________________ William F. Heitmann |
EXHIBIT 24.2
POWER OF ATTORNEY
WHEREAS, VERIZON GLOBAL FUNDING CORP., a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, a resale shelf registration statement on Form S-3 (the "Registration Statement") relating to its Zero-Coupon Convertible Notes due 2021, the shares of the Verizon Communications Inc.'s common stock into which such notes are convertible and the related support and share contribution obligations of Verizon Communications Inc.
NOW, THEREFORE, the undersigned hereby appoints William F. Heitmann, Janet M. Garrity and Robert S. Fitzmire and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to the Registration Statement, and to file the same, with all exhibits thereto and all documents in connection therewith, making such changes in the Registration Statement as such person or persons so acting deems appropriate, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 13th day of August, 2001.
/s/ David S. Kauffman _____________________ David S. Kauffman |
POWER OF ATTORNEY
WHEREAS, VERIZON COMMUNICATIONS INC., a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, a resale shelf registration statement on Form S-3 (the "Registration Statement") relating to Verizon Global Funding Corp.'s Zero-Coupon Convertible Notes due 2021, the shares of the Company's common stock into which such notes are convertible and the related support and share contribution obligations of the Company.
NOW, THEREFORE, the undersigned hereby appoints each of Charles R. Lee, Ivan G. Seidenberg, Frederic V. Salerno and William F. Heitmann and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to the Registration Statement, and to file the same, with all exhibits thereto and all documents in connection therewith, making such changes in the Registration Statement as such person or persons so acting deems appropriate, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys- in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 13th day of August, 2001.
/s/ James R. Barker ______________________________ James R. Barker |
POWER OF ATTORNEY
WHEREAS, VERIZON COMMUNICATIONS INC., a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, a resale shelf registration statement on Form S-3 (the "Registration Statement") relating to Verizon Global Funding Corp.'s Zero-Coupon Convertible Notes due 2021, the shares of the Company's common stock into which such notes are convertible and the related support and share contribution obligations of the Company.
NOW, THEREFORE, the undersigned hereby appoints each of Charles R. Lee, Ivan G. Seidenberg, Frederic V. Salerno and William F. Heitmann and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to the Registration Statement, and to file the same, with all exhibits thereto and all documents in connection therewith, making such changes in the Registration Statement as such person or persons so acting deems appropriate, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys- in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 13th day of August, 2001.
/s/ Edward H. Budd ______________________________ Edward H. Budd |
POWER OF ATTORNEY
WHEREAS, VERIZON COMMUNICATIONS INC., a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, a resale shelf registration statement on Form S-3 (the "Registration Statement") relating to Verizon Global Funding Corp.'s Zero-Coupon Convertible Notes due 2021, the shares of the Company's common stock into which such notes are convertible and the related support and share contribution obligations of the Company.
NOW, THEREFORE, the undersigned hereby appoints each of Charles R. Lee, Ivan G. Seidenberg, Frederic V. Salerno and William F. Heitmann and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to the Registration Statement, and to file the same, with all exhibits thereto and all documents in connection therewith, making such changes in the Registration Statement as such person or persons so acting deems appropriate, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys- in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 13th day of August, 2001.
/s/ Richard L. Carrion ______________________________ Richard L. Carrion |
POWER OF ATTORNEY
WHEREAS, VERIZON COMMUNICATIONS INC., a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, a resale shelf registration statement on Form S-3 (the "Registration Statement") relating to Verizon Global Funding Corp.'s Zero-Coupon Convertible Notes due 2021, the shares of the Company's common stock into which such notes are convertible and the related support and share contribution obligations of the Company.
NOW, THEREFORE, the undersigned hereby appoints each of Charles R. Lee, Ivan G. Seidenberg, Frederic V. Salerno and William F. Heitmann and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to the Registration Statement, and to file the same, with all exhibits thereto and all documents in connection therewith, making such changes in the Registration Statement as such person or persons so acting deems appropriate, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys- in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 13th day of August, 2001.
/s/ Robert F. Daniell ______________________________ Robert F. Daniell |
POWER OF ATTORNEY
WHEREAS, VERIZON COMMUNICATIONS INC., a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, a resale shelf registration statement on Form S-3 (the "Registration Statement") relating to Verizon Global Funding Corp.'s Zero-Coupon Convertible Notes due 2021, the shares of the Company's common stock into which such notes are convertible and the related support and share contribution obligations of the Company.
NOW, THEREFORE, the undersigned hereby appoints each of Charles R. Lee, Ivan G. Seidenberg, Frederic V. Salerno and William F. Heitmann and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to the Registration Statement, and to file the same, with all exhibits thereto and all documents in connection therewith, making such changes in the Registration Statement as such person or persons so acting deems appropriate, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys- in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 13th day of August, 2001.
/s/ Helene L. Kaplan ______________________________ Helene L. Kaplan |
POWER OF ATTORNEY
WHEREAS, VERIZON COMMUNICATIONS INC., a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, a resale shelf registration statement on Form S-3 (the "Registration Statement") relating to Verizon Global Funding Corp.'s Zero-Coupon Convertible Notes due 2021, the shares of the Company's common stock into which such notes are convertible and the related support and share contribution obligations of the Company.
NOW, THEREFORE, the undersigned hereby appoints each of Ivan G. Seidenberg, Frederic V. Salerno and William F. Heitmann and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to the Registration Statement, and to file the same, with all exhibits thereto and all documents in connection therewith, making such changes in the Registration Statement as such person or persons so acting deems appropriate, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 13th day of August, 2001.
/s/ Charles R. Lee ______________________________ Charles R. Lee |
POWER OF ATTORNEY
WHEREAS, VERIZON COMMUNICATIONS INC., a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, a resale shelf registration statement on Form S-3 (the "Registration Statement") relating to Verizon Global Funding Corp.'s Zero-Coupon Convertible Notes due 2021, the shares of the Company's common stock into which such notes are convertible and the related support and share contribution obligations of the Company.
NOW, THEREFORE, the undersigned hereby appoints each of Charles R. Lee, Ivan G. Seidenberg, Frederic V. Salerno and William F. Heitmann and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to the Registration Statement, and to file the same, with all exhibits thereto and all documents in connection therewith, making such changes in the Registration Statement as such person or persons so acting deems appropriate, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys- in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 13th day of August, 2001.
/s/ Sandra O. Moose ______________________________ Sandra O. Moose |
POWER OF ATTORNEY
WHEREAS, VERIZON COMMUNICATIONS INC., a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, a resale shelf registration statement on Form S-3 (the "Registration Statement") relating to Verizon Global Funding Corp.'s Zero-Coupon Convertible Notes due 2021, the shares of the Company's common stock into which such notes are convertible and the related support and share contribution obligations of the Company.
NOW, THEREFORE, the undersigned hereby appoints each of Charles R. Lee, Ivan G. Seidenberg, Frederic V. Salerno and William F. Heitmann and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to the Registration Statement, and to file the same, with all exhibits thereto and all documents in connection therewith, making such changes in the Registration Statement as such person or persons so acting deems appropriate, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys- in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 13th day of August, 2001.
/s/ Joseph Neubauer ______________________________ Joseph Neubauer |
POWER OF ATTORNEY
WHEREAS, VERIZON COMMUNICATIONS INC., a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, a resale shelf registration statement on Form S-3 (the "Registration Statement") relating to Verizon Global Funding Corp.'s Zero-Coupon Convertible Notes due 2021, the shares of the Company's common stock into which such notes are convertible and the related support and share contribution obligations of the Company.
NOW, THEREFORE, the undersigned hereby appoints each of Charles R. Lee, Ivan G. Seidenberg, Frederic V. Salerno and William F. Heitmann and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to the Registration Statement, and to file the same, with all exhibits thereto and all documents in connection therewith, making such changes in the Registration Statement as such person or persons so acting deems appropriate, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys- in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 13th day of August, 2001.
/s/ Thomas H. O'Brien ______________________________ Thomas H. O'Brien |
POWER OF ATTORNEY
WHEREAS, VERIZON COMMUNICATIONS INC., a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, a resale shelf registration statement on Form S-3 (the "Registration Statement") relating to Verizon Global Funding Corp.'s Zero-Coupon Convertible Notes due 2021, the shares of the Company's common stock into which such notes are convertible and the related support and share contribution obligations of the Company.
NOW, THEREFORE, the undersigned hereby appoints each of Charles R. Lee, Ivan G. Seidenberg, Frederic V. Salerno and William F. Heitmann and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to the Registration Statement, and to file the same, with all exhibits thereto and all documents in connection therewith, making such changes in the Registration Statement as such person or persons so acting deems appropriate, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys- in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 13th day of August, 2001.
/s/ Russell E. Palmer ______________________________ Russell E. Palmer |
POWER OF ATTORNEY
WHEREAS, VERIZON COMMUNICATIONS INC., a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, a resale shelf registration statement on Form S-3 (the "Registration Statement") relating to Verizon Global Funding Corp.'s Zero-Coupon Convertible Notes due 2021, the shares of the Company's common stock into which such notes are convertible and the related support and share contribution obligations of the Company.
NOW, THEREFORE, the undersigned hereby appoints each of Charles R. Lee, Ivan G. Seidenberg, Frederic V. Salerno and William F. Heitmann and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to the Registration Statement, and to file the same, with all exhibits thereto and all documents in connection therewith, making such changes in the Registration Statement as such person or persons so acting deems appropriate, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys- in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 13th day of August, 2001.
/s/ Hugh B. Price ______________________________ Hugh B. Price |
POWER OF ATTORNEY
WHEREAS, VERIZON COMMUNICATIONS INC., a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, a resale shelf registration statement on Form S-3 (the "Registration Statement") relating to Verizon Global Funding Corp.'s Zero-Coupon Convertible Notes due 2021, the shares of the Company's common stock into which such notes are convertible and the related support and share contribution obligations of the Company.
NOW, THEREFORE, the undersigned hereby appoints each of Charles R. Lee, Frederic V. Salerno and William F. Heitmann and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to the Registration Statement, and to file the same, with all exhibits thereto and all documents in connection therewith, making such changes in the Registration Statement as such person or persons so acting deems appropriate, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 13th day of August, 2001.
/s/ Ivan G. Seidenberg ______________________________ Ivan G. Seidenberg |
POWER OF ATTORNEY
WHEREAS, VERIZON COMMUNICATIONS INC., a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, a resale shelf registration statement on Form S-3 (the "Registration Statement") relating to Verizon Global Funding Corp.'s Zero-Coupon Convertible Notes due 2021, the shares of the Company's common stock into which such notes are convertible and the related support and share contribution obligations of the Company.
NOW, THEREFORE, the undersigned hereby appoints each of Charles R. Lee, Ivan G. Seidenberg, Frederic V. Salerno and William F. Heitmann and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to the Registration Statement, and to file the same, with all exhibits thereto and all documents in connection therewith, making such changes in the Registration Statement as such person or persons so acting deems appropriate, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys- in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 13th day of August, 2001.
/s/ Walter V. Shipley ______________________________ Walter V. Shipley |
POWER OF ATTORNEY
WHEREAS, VERIZON COMMUNICATIONS INC., a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, a resale shelf registration statement on Form S-3 (the "Registration Statement") relating to Verizon Global Funding Corp.'s Zero-Coupon Convertible Notes due 2021, the shares of the Company's common stock into which such notes are convertible and the related support and share contribution obligations of the Company.
NOW, THEREFORE, the undersigned hereby appoints each of Charles R. Lee, Ivan G. Seidenberg, Frederic V. Salerno and William F. Heitmann and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to the Registration Statement, and to file the same, with all exhibits thereto and all documents in connection therewith, making such changes in the Registration Statement as such person or persons so acting deems appropriate, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys- in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 13th day of August, 2001.
/s/ John W. Snow ______________________________ John W. Snow |
POWER OF ATTORNEY
WHEREAS, VERIZON COMMUNICATIONS INC., a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, a resale shelf registration statement on Form S-3 (the "Registration Statement") relating to Verizon Global Funding Corp.'s Zero-Coupon Convertible Notes due 2021, the shares of the Company's common stock into which such notes are convertible and the related support and share contribution obligations of the Company.
NOW, THEREFORE, the undersigned hereby appoints each of Charles R. Lee, Ivan G. Seidenberg, Frederic V. Salerno and William F. Heitmann and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to the Registration Statement, and to file the same, with all exhibits thereto and all documents in connection therewith, making such changes in the Registration Statement as such person or persons so acting deems appropriate, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys- in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 13th day of August, 2001.
/s/ John R. Stafford ______________________________ John R. Stafford |
POWER OF ATTORNEY
WHEREAS, VERIZON COMMUNICATIONS INC., a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, a resale shelf registration statement on Form S-3 (the "Registration Statement") relating to Verizon Global Funding Corp.'s Zero-Coupon Convertible Notes due 2021, the shares of the Company's common stock into which such notes are convertible and the related support and share contribution obligations of the Company.
NOW, THEREFORE, the undersigned hereby appoints each of Charles R. Lee, Ivan G. Seidenberg, Frederic V. Salerno and William F. Heitmann and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to the Registration Statement, and to file the same, with all exhibits thereto and all documents in connection therewith, making such changes in the Registration Statement as such person or persons so acting deems appropriate, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys- in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 13th day of August, 2001.
/s/ Robert D. Storey ______________________________ Robert D. Storey |
POWER OF ATTORNEY
WHEREAS, VERIZON COMMUNICATIONS INC., a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, a resale shelf registration statement on Form S-3 (the "Registration Statement") relating to Verizon Global Funding Corp.'s Zero-Coupon Convertible Notes due 2021, the shares of the Company's common stock into which such notes are convertible and the related support and share contribution obligations of the Company.
NOW, THEREFORE, the undersigned hereby appoints each of Charles R. Lee, Ivan G. Seidenberg and William F. Heitmann and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to the Registration Statement, and to file the same, with all exhibits thereto and all documents in connection therewith, making such changes in the Registration Statement as such person or persons so acting deems appropriate, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 13th day of August, 2001.
/s/ Frederic V. Salerno ______________________________ Frederic V. Salerno |
POWER OF ATTORNEY
WHEREAS, VERIZON COMMUNICATIONS INC., a Delaware corporation (hereinafter referred to as the "Company"), proposes to file with the Securities and Exchange Commission under the provisions of the Securities Act of 1933, as amended, a resale shelf registration statement on Form S-3 (the "Registration Statement") relating to Verizon Global Funding Corp.'s Zero-Coupon Convertible Notes due 2021, the shares of the Company's common stock into which such notes are convertible and the related support and share contribution obligations of the Company.
NOW, THEREFORE, the undersigned hereby appoints each of Charles R. Lee, Ivan G. Seidenberg, Frederic V. Salerno and William F. Heitmann and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments, including post-effective amendments, to the Registration Statement, and to file the same, with all exhibits thereto and all documents in connection therewith, making such changes in the Registration Statement as such person or persons so acting deems appropriate, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys- in-fact and agents or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney this 13th day of August, 2001.
/s/ Lawrence R. Whitman ______________________________ Lawrence R. Whitman |