Hundreds of Verizon retirees areexpected to gather in the EastMeadow section on Long

Island, New York for the 10th AnnualAssociation of BellTel Retirees mem-bership meeting on Wednesday, May10 from 8:30 a.m. until noon.

The event will take place at the gor-geous Carltun inside EisenhowerPark in East Meadow, Long Island,within about a half-hour ride fromNew York City.

This event always promises to be ahighlight for the year, giving membersan opportunity to gather with fellowretirees and former coworkers.

Given that this year commemo-rates the Association’s ten years ofservice to the Verizon retiree commu-nity, the event is expected to haveextra significance.

The setting of the meeting is alsovery welcoming. The Carltun is setamong the beautiful 930 acre Eisen-hower Park. The park is home to three18-hole golf courses, earning a reputa-

tion as early as the Roaring 1920’s as agolfers haven.

Aside from golfing, the park is amecca for sporting events and leisurelyfun, including a special activities centerand outdoor games area just for adultsages 60 and over. Many enjoy horse-

BELLTEL RETIREESpring 2006 Volume 37

The Official Newsletter for Retirees of Bell Atlantic, GTE, NYNEX, Verizon and Its SubsidiariesPaid for by contributions from Verizon retirees

Retirees Meet on May 10 on Long Island, NY for Annual Member Gathering

In a December 5th email, 50,000loyal Verizon employees weretold by the company message

center that their pension plan hadbeen permanently frozen. Thechange only affects managementemployees, not retirees.

The Association is extremely dis-mayed about these major changes inthe pension, healthcare and otherbenefits and will be examining avail-able courses of action. Almost onemonth to the day after Verizon closedits management pension plan, IBMfollowed suit and again almost onemonth after IBM’s announcement,General Motors followed suit.

This triple play has been called theend of the American Pension bymany in the press.

While we have heard the companyexplain the financial pressures it faces

in the global economy, we abhor theconcept of solving these problems onthe backs of those who have giventheir lives to build this company. Weare most concerned about those whohave worked many years with thepromise that pension, healthcare andother benefits would be there forthem as long as they were employedand on into retirement. These loyalworkers trusted their employer thatthose forms of deferred compensa-tion would be there. Had they knownthat the company would renege onthose commitments, they surelymight have found employment else-where.

Verizon will now find it more diffi-cult to attract and retain highly quali-fied workers when benefits arereduced or eliminated. A companylike Verizon should not be known for

breaking promises and reneging onits commitments.

Since the managers, have onceagain been singled out to carry theextra financial burden, union work-ers, who frequently supply the talentpool of future managers, will be evenmore reluctant than ever before tomove into management positions.This is hardly the way to rewardworkers for their dedication, loyaltyand hard work.

We are saddened to witness thelingering death of the ssppiirriitt ooff sseerrvviicceethat was inspired by the great formerBell System and that made workersand retirees alike so proud. To takeaway something that people haveworked years for is immoral, illadvised, counter productive and in

Response to Verizon Freezing Management Pension Plan

(Continued on page 3)

(Continued on page 4)

10 Years of Service to the Verizon Retiree CommunityH 1996 H H 2006 H

Among local tourist sites is the Cradle ofAviation Museum.

2006 Verizon AnnualMeeting in Kansas

The 2006 Annual VerizonCommunications shareown-

er’s meeting will be held onThursday, May 4 at 10:00 a.m. atthe Marriott Overland Park Hotelin Overland Park, Kansas, nearboth Kansas City, Missouri andKansas City, Kansas.

Your retiree association willbe represented at the meetingand will be speaking to theChairman, Officers, Board Mem-bers and shareholders in thepresentation of our proxy resolu-tions. For more informationabout the BellTel Retiree 2006shareowner proxy campaign,turn to pages 8 & 9.

WWee aallssoo eennccoouurraaggee aallll AAssssoocciiaa--ttiioonn mmeemmbbeerrss wwhhoo aarree VVeerriizzoonnSShhaarreeoowwnneerrss ttoo NNOOTT VVOOTTEE OONNTTHHEE PPRROOXXYY PPRROOPPOOSSAALLSS UUNNTTIILLyyoouu rreecceeiivvee aa mmeemmoo ffrroomm tthheeAAssssoocciiaattiioonn ooff BBeellllTTeell RReettiirreeeesswwiitthh vvoottiinngg rreeccoommmmeennddaattiioonnss..

Happy Birthday Association ofBellTel Retirees! Exactly 10years ago, a handful of con-

cerned retirees incorporated the Asso-ciation of NYNEX Retirees, later to berenamed after the merger with BellAtlantic. These seven founders, five ofwhom continue to serve this Associa-tion in leadership positions, actedbecause the company was changing itsphilosophy regarding the treatment ofretirees.

Here we are ten years later and thesort of concerns that we had in 1996have not lessened. There have been nocost of living increases in many years asthe buying power of pensions haseroded by as much as 33%. Somehealthcare costs have shifted to retireesand other benefits have been frozen orterminated. Your Association has

worked very hard to protect andenhance pensions and benefits withsome measurable and some immeas-urable successes.

The new global economy is puttinggreater pressure on companies, pres-sures that were never thought of 10years ago. Many companies, includingVerizon have reacted by taking drasticmeasures. The most recent freezing ofmanagement pensions for about50,000 active employees is uncon-scionable. When many of those peo-ple decided to join the company, it waswith a promise of excellent benefits,including pensions, healthcare, sav-ings plans, insurance, concession tele-phone service and more. These bene-fits were provided in lieu of higher pay,but the “compensation package,”including pay and all benefits, was veryattractive to new hires.

Now, as many as 29 years later, afterworking tirelessly, with the promise ofretirement security, these people aretold that their pension has been frozen.One person indicated that he would

Spring 2006BellTel Retiree2

President’s Messageby C. William Jones

lose nearly $400,000 by Verizon’saction. Verizon officers have acted tosave money at the expense of thosewho built the company. But thataction will come at a price. Those sav-ings will cost them. What present orfuture employee will ever trust thiscompany to do what they promise?What union-represented employeewould ever take a promotion to man-agement only to be treated like a pos-session? How could a customer relyon the word of Verizon? Car dealersmade famous the “bait and switch”and now Verizon joins their ranks.This is a sad day in the life of a onceworld class employer that has sunk tothird class status, or worse.

Chairman Seidenberg, I cannotbelieve that you truly think that theserecent actions are in the best interestsof the company and its faithfulemployees.

Association members, it is time toredouble our efforts to do whateverwe must to protect our financial secu-rity. Your Association has developed aLong Range Strategic Plan to deal withthis sort of theft and we will soon becalling upon all of you to help.

the long range, relegates Verizon toThird Rate status.

Many employees and retirees havebeen venting their frustrations on theVerizon Retirement Watch web site, which can be found at www.verizonretirementwatch.com)

We wanted to share with youexcerpts from an open letter sent tothe Association from a current Veri-zon manager affected by thesechanges. (Reprinted with Permis-sion)

Mr. Seidenberg: I am writing to you to express my

profound dismay at the change in theentire pension benefit. I have lost$101,000 from my pension throughyour subterfuge. Additionally, I getmy 75 retirement points as of1/22/2008, some 22 days after the12/31/2007 drop-dead date.

While my situation is bad, it is noth-ing compared to a 47-year-old,employee with 25 years of servicewho does not reach his 75 points by

the magical 2007 date. Under yourscheme, he is loosing in excess of$400,000.00 dollars. Think aboutwhat this means to your employees.Retirements that they have workedhard for are destroyed.

Verizon’s 2004 net income was$7.8 billion. To put the impact ofyour contrivance in simple terms,assuming similar net income over tenyears, the $3 billion saved by yourestimate, is a mere 4% of that total, orless than half of one year’s income.

I am asking a more fundamentalquestion of trust. In one staff meet-ing you have an Executive VPresponding to a complaint about theconfiscation of the pension plan bysaying that if the employee can find ajob with another company he shouldleave. That comment evidences a “letthem eat cake” mentality, the impres-sion of which is shared by a growingnumber of employees.

Trust is a covenant between theemployer and the employee.

The bargaining unit worker who

accepted an exempt supervisor joband now, without the bargainingagreement to protect her, will have tochoose between college for her chil-dren and a retirement of some com-forts. What about all the engineers,designers, planners and managersfor whom a forty-hour week meansthere was a national holiday thatweek?

Last year, the top five executives ofVerizon, including you, made$37,891,000 in annual compensa-tion plus restricted stock awards andother compensation. It is unseemlythat senior executives hold themselvesabove the fray and assign the sacri-fices to us plebeians. Sir, we are not allin this together unless we are all inthis together. Until you and yourcohorts join us in the suffering, youare living down to the expectations ofWall Street.

Ralph M. Casillas,Verizon Network Engineering &

Planning Trunk Forecasting

As a New Year’s surprise to itsemployees IBM, which operatesthe third-largest corporate pen-

sion fund in the United States, said itwould freeze pension benefits andonly offer employees a 401(k) retire-ment plan in the future. In FebruaryGeneral Motors the world’s largestautomaker said it planned to freeze itsretiree pension program, and intro-duce other changes in its retirementprogram for future retirees.

Recently Verizon froze its pensionplan for management employees. Thatchange is slated to take effect on June 1,2006.

As of the end of 2005, IBM's U.S.defined benefit qualified pension planwas fully funded with more than $48billion in assets. I.B.M. said the freezingof its pension plan should save thecompany $2.5 billion to $3 billion by2010. The change is slated to take effectJan. 1, 2008 and does not affect IBM’scurrent 125,000 U.S. retirees, those withalready vested benefits or employeeswho retiree prior to the date of thechange. IBM's U.S. defined benefit pen-sion plans will stop accruing new ben-efits effective December 31, 2007.

GM said its moves to rein in retiree

benefits would save the companyabout $900 million a year, and reducehealth-care liabilities by $4.8 billioncapping contributions to salaried

retirees’ health-care coverage at 2006levels. Current GM retirees and surviv-ing spouses will not be affected, thecompany said.

Spring 2006 BellTel Retiree 3

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Response to Verizon Freezing Management Pension Plan

Mimicking Verizon, I.B.M. & GM Freeze Employee Pension Plan

(Continued from page 1)

shoes, lawn bowling and bocciegames, and tables provide sanctuaryfor card players. It is also just minutesaway from a great selection of shop-ping at Roosevelt Field or for thosewho want to dip their toe into theAtlantic Ocean, Jones Beach is also justa short car ride away. (For a brochureon things to do while in the area call the

L.I. Convention & Visitors Bureau tollfree at 1-877-FUN-ONLI or visit the website www.funonli.com)

As of our news deadline, more than200 Early Bird RSVP’s have beenreceived, well ahead of the responsefor recent annual retiree gatherings.

To be part of this special occasion itis highly recommended that you RSVPwell in advance to guarantee a spot for

you and your guests.If you would like to attend the event,

please complete the form below andmail it along with a $5 per person regis-tration fee to J. McCann, Annual Meet-ing Coordinator, P.O. Box 33, ColdSpring Harbor, New York 11724. MMaakkeecchheecckkss ppaayyaabbllee ttoo:: AAssssoocciiaattiioonn ooff BBeellll--TTeell RReettiirreeeess. Please do not send cash orRSVP’s to the Association’s Glen Head,NY address. Please include your emailaddress and the email address of yourguests. An admission ticket will bemailed to you once your check andregistration form is received.

Continental breakfast will begin at8:30 a.m., followed by the businessportion annual meeting from 10:00 a.m.- Noon.

Spring 2006BellTel Retiree4

Retirees Meet May 10 on Long Island(Continued from page 1)

RSVP for Association of BellTel Retirees 10th Annual MeetingMay 10, 2005 at The Carltun in Eisenhower Park

East Meadow (Long Island), New York

I will attend the meeting on Long Island, NY # in my party

Name:

Address:

Phone Number: Email:

Enclosed is a check for $ _____ ($5 per person)

For other members/guest names and addresses in your party, attach a sepa-rate sheet of paper.

Please return this registration form and fee by to: J. McCann, Annual Meeting Coordinator,

P.O. Box 33, Cold Spring Harbor, New York 11724. Please make checks payable to: Association of BellTel Retirees

In early January Verizon Communi-cations Inc. completed its $8.5 bil-lion purchase of MCI Inc. giving the

company a national fiber-optic net-work and business-services unit tohelp it compete against the combinedSBC/AT&T, now to be called AT&TCorp.

The MCI acquisition came after athree-month bidding war againstQwest.

The merger increases Verizon’swork force by about 40,000 to 250,000,a number the company has said itwould reduce by about 7,000 after thedeal was completed.

Under terms of the acquisition, MCIstockholders get 0.5743 shares of Veri-zon, plus a cash payment of $2.738 foreach MCI share. Verizon said it optedfor the cash payment, totaling $779 mil-lion overall, rather than issuing moreshares so the deal’s value wouldamount to at least $20.40 per share ofMCI.

Within days of the deal’s comple-tion, CEO Ivan Seidenberg spoke at aninvestor conference in Phoenix andsaid he expects the company’s recentacquisition of MCI to yield $8 billion inincremental revenues and operationalsavings, up $1 billion from the amountannounced in February 2005, becauseof so-called aggressive transition plans.

CCEEOO’’ss RReewwaarrddeedd HHaannddssoommeellyy Michael D. Capellas, former CEO of

MCI will gain a $39 million goldenhandshake pay package for selling MCIto Verizon. Just three years ago Capel-las also collected a $14 million goldenhandshake package for selling Com-paq Computers to Hewlett-Packard.

As of press deadline there was noword of any incentive packages beingprovided to current Verizon CEO IvanSeidenberg or other top executives atthe company.

But according to the New NetworksInstitute (www.newnetworks.com),during the year 2000 when the GTE

and Bell Atlantic merger was put intomotion, six individuals received 10.1%of all stock options with an estimatedvalue of $151-$380 million. From 1999-2001, the top 6 executives of Verizon-GTE received a total of 9.8 millionshares with an estimated value of $424million to $1.1 billion. The group made$194 million dollars in salaries andother perks, including various mergerbonuses in just those years.

When AT&T was taken over by SBC,ex-AT&T CEO David Dorman wasgiven a package worth an estimated$55 million in cash, stock and otherbenefits. CALPERS, the trust that repre-sents California’s Public EmployeePension Plan, complained that AT&T’sneed to be acquired was partially dueto Dorman’s leadership and inability toturn the company around. ChristyWood, a senior investment officer atCALPERS simply said, “We’re not anti-pay. We’re anti-pay for failure.”

Verizon Completes Takeover of MCI

Nearby Old Westbury Gardens is oneof the region's most elegant estatesand is open to visitors

Spring 2006 BellTel Retiree 5

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Verizon Fiscal Rating Cut by Wall Street

Standard & Poor’s (S&P) has joinedMoody’s Investors Service inreducing its rating on Verizon

Communications Inc.’s debt and sug-gests it may lower rating on otherphone companies as competition fromthe cable industry increases. In mid-January Verizon, had its long-term debtrating cut one step to A from A+.Richard Siderman an S&P analyst cau-tioned, “In the battle between tele-phone and cable, the early advantageshould go to cable.”

Verizon is spending billions of dol-lars building a high-speed network forTV services to counter efforts by someof the nation’s largest cable televisioncompanies. JPMorgan analystJonathan Chaplin estimates that cableand other providers of Internet-basedtelephone service will capture 28 per-cent of voice lines by 2010. He ratesVerizon shares neutral.’’

In late December, Moody’sInvestors Service downgraded Veri-zon’s $45 billion of long-term debt. Atthe time Doreen Toben, Verizon CFOobjected, saying that she took, “strongexception” to the reduction.

By the beginning of 2006, Verizonhad made fiber available to 3 millionhomes and businesses in 16 states,according to CEO Ivan Seidenberg. Heprojects that Verizon plans to passanother 6 million homes by the end of2007, until it reaches 60 percent of thosein its territories. Late in 2005 the com-pany began offering television servicesin parts of Texas, Virginia and Florida.

Beginning in January Verizon Wire-less also began selling downloadablesongs for cell phones, in an effort to tapthe growing market for online music. Itis expected that by early summer theservice will offer over one millionsongs from major record labels.

When a customer purchases a songvia cell phone, a copy will also be avail-able on their personal computer for$1.99. Verizon will also allow sub-scribers to download a song for 99cents directly into a computer and thentransfer it to their portable music playerhandset.

Jupiter Research estimates that thecurrent U.S. market for downloadablemusic is $511 million. Shipments ofmobile phones with the capability of

storing and playing music will rise to439.2 million in 2008 from 194.1 mil-lion this year, according to StrategyAnalytics.

$250 Each to New Member Contest Winners

In the fall 2005 the Association helda contest to encourage new mem-ber referrals. For each referral that became a con-

tributing member of the Association,the names of the new member and thereferring member were placed into adrawing to each win a $250 AmericanExpress Gift Card. The current Associ-ation membership stands at 111,500.

Selected from active members whorecruited a new member: KKeenn GGiilleess ooffMMccMMuurrrraayy,, PPAA; Selected from newcontributing members was MMrrss.. LLaauurreellAAnnnn SSkkaallkkoo ooff SSccoottttssddaallee,, AARR..

Congratulations and thank you forbeing part of our retiree communityand helping us grow. Keep spreadingthe word to your fellow retirees.

By Christina Martingano

Within the first few minutes ofspeaking with C. WilliamJones, President and Execu-

tive Director of the Association of Bell-Tel Retirees, his dedication to a greatercause becomes crystal clear. Jones is acalm, controlled leader with a friendlydemeanor, which offers reassurance ofhis capabilities to lead the Associationwith a smile and a twinkle in his eye.

Perhaps his commitment to Bell Sys-tem retirees stems from his dedicationto the company itself. Jones began histhirty-year long stay with what wasthen New York Telephone the summerbefore his senior year of college. Hewas working with the General SalesDepartment as part of the company’ssummer program and had beenoffered a job after graduation.

He was so compelled by what hehad learned that, he did not even seekto interview with another companyupon receiving his college degree.However, Jones’ first day at NY Tele-phone may not have been as smooth,and shall we say profitable, as he mighthave liked.

Bill was set to work with a 6-manline truck as part of the company train-ing program. The day began with some

good-natured teasing fromhis new colleagues and thesuggestion of a game ofHearts, with the looser buy-ing the rest of the crew cof-fee. As the new guy hecouldn’t refuse, but neverhaving played hearts before,Jones naturally lost. Later inthe day cards were soondealt again to see whowould pay for lunch, andthen again to see who wouldbuy the afternoon’s coffee.

Jones lost each time andwound up having to borrowmoney from the foreman topay for the day’s expenses.

On the trip home fromwork he realized that hisfirst day of work may havecost him more than his day’s wage.That night, he asked his wife to teachhim how to play and hopefully win athearts, or else he was never going to beable to afford to pay the rent at home,let alone continue to feed his hungrycolleagues.

Bill Jones’ career began working inNY Tel’s Commercial Department withcustomer service. Within time he waspromoted to supervisor and then man-ager of that department. He latermoved on to the Operations, Planning,and Engineering Department and thenserved as a witness to rate case pro-ceedings, where he estimated and testi-fied for future rates. He finished hiscareer as the Managing Director of Cor-porate Planning at NYNEX.

Jones fondly remembers the familyatmosphere of the Bell System. Heremembered the company as a placewhere strong friendships were able toexist and where executives understoodthe importance of looking out for theconcerns of their employees.

He credits the Bell System with anability to foster a team-focused andnurturing work environment, the sameway the Association of BellTel Retireesand its volunteers have forged a com-mon bond committed to fighting forretiree economic rights.

“Because of the Association, we stayconnected with a lot of people,” saidJones. “It is satisfying to stay in touchwith folks you worked with and to helpand try to make a difference in their

lives.”Recently, after speak-

ing to a member aboutan upcoming road trip toFlorida, the memberoffered Jones and hiswife a place to stay whiletraveling. Bill was gen-uinely touched by notonly the kindness, butalso the trust this gesturedisplayed from a fellowretiree.

Aside from his workwith the retiree associa-tion, Bill Jones has beenvery active since hisretirement in 1990. Thesports’ fan serves asPresident of his localYMCA and plays both

golf and platform tennis. He also served on the Board of the

American Platform Tennis Associa-tion, as President of the Long IslandPlatform Tennis Association and ispart of the Maryland Golf Association.He has also served on other boards,including the Red Cross and helps hiswife Gail in her own communityinvolvements, including work in theperforming arts, the historical societyand Habitat for Humanity.

Jones has been married for 46 yearsto Gail, whom he met while attendingLehigh University in Pennsylvania.They have two children, a daughterand son, plus two grandchildren, agesthree and seven. And in an age whereair travel is the norm, Bill and Gail stillappreciate taking long road trips acrossthe U.S. He recalls seeing Nevada, theGrand Canon and Arizona, severalnational parks, Texas and the GulfStates along the way.

Bill chose early retirement in 1990.His experience with the company’sbudgeting department gave him proofthat the company would take care of itsretirees including providing promisedCost of Living Adjustments (COLA)every few years.

However, five years after he had leftthe company, by 1995, he had notreceived an increase and began towonder what had changed.

About that time Bill met up with fel-low NYNEX retiree, Ed Ward and both

Spring 2006BellTel Retiree6

Retiree Spotlight

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(Continued on next page)

Bill Jones at his retire-ment party from NYNEX.

came to discuss the COLA issue whilechatting about their retirement heathcare options. They then began tospread the word, recruiting retireefriends and colleagues Don Eltharp,Bob Rehm, John Parente, Joe Ristucciaand Mike Kucklinca.

As the group of seven met and wentout to speak to regional retiree groupsthey began to gather what grew to1,440 retiree signatures on a letter toIvan Seidenberg, then Chairman ofNYNEX. Some months later when thechairman did not respond to the com-pany’s loyal retirees, they realizedmore action was needed and they offi-cially created a retiree advocacy associ-ation.

In 1996, the list of retiree issuesplaguing America’s retirees had not yetgrown as plentiful as it is in the year2006. At the time, the retirees were sim-ply advocating for the Cost of LivingAdjustment they had been promised intheir working years. “If he had justgiven retirees a COLA at the time, hemight have taken the air out of the bal-loon and we all might have just goneaway.” But oh, how times havechanged!

Since then, Jones and his fellow vol-unteers have lead The Association ofBellTel Retirees into numerous suc-cesses and an amazing growth trajecto-ry, now with ten years under their beltand over 111,500 members.

These successes include helping togain a pension increase from $400 amonth to $700 a month for retirees liv-ing on minimum pensions and helpingto gain a Special Lump Sum Payout forretirees that ranged between $2,500-$20,000. For many retirees these winsprovided a financial lifeline.

Among the most recognizedaccomplishments — especially on Wall

Street — is the Associa-tion’s standing as the firstretiree advocacy organiza-tion in the United States toutilize corporate share-holder proxy proposals toforce change for greaterresponsibility in corporategovernance and being thefirst to ever defeat Verizonor its predecessor compa-nies in the 100 year historyof the company.

Other retiree activistgroups have now begunemploying this method, asdo many labor unionsacross the U.S. since theAssociation popularizedthese efforts with theirsuccesses.

Amazingly, retiree proxies havedefeated Verizon for the last three yearsand counting, forcing various reformson how executives are compensated,reigning in “golden parachutes” andcutting officer pension accruals.“Through our proxy proposals, wehave been able to keep the company’sattention that we are out there fightingfor our retirees and all shareowners,”he said.

Another major hurdle facing Ameri-ca’s retirees is health benefits and cor-porations insistence on diminishingthem. On this front Jones and Associa-tion leaders have worked to nurtureother corporate retiree advocacygroups across the country to join thefight for retiree pension and benefitprotections, even helping to organize agroup in Washington DC to create,advocate and lobby for pro-retiree leg-islation.

“The only way retireescan help ourselves is tochange the laws of theland,” said Jones on theefforts to change legisla-tion.

In 1996, few could haveever predicted the explo-sion of retiree issues thatwere on the horizon, butthis means the organiza-tion’s mission and need foradvocacy by and for Veri-zon retirees is growing.Jones and his fellow retireeactivists have no plans toslow down in the future.

“Given the challengesand threats to retiree secu-rity, this is a time where we

believe there is a need to elevate andreinvent the American retiree move-ment,” said Jones. “We have been fol-lowing the same processes with someincredible successes for 10 years, butwith new challenges facing our retireesand other seniors, we need to look intoother areas and strategies.”

Not content with standing atop ofthe Association of BellTel Retireesstack of successes, this retiree makes itclear that the Association is alreadystrategizing the next move in a sort ofhigh stakes chess match against a uni-fied corporate America which unlikeretirees, has an unlimited pool ofmoney, resources, lobbyists and adcampaigns to get what they want.

Unbeknownst at the time, it was thatfateful letter signed by 1,440 NYNEXretirees in 1996 that was the rallying cryto awaken Jones and his fellow retireesand they haven’t looked back yet.

Spring 2006 BellTel Retiree 7

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Retiree Spotlight (Continued from previous page)

Bill spending time withhis grandaughter Carley.

Last year, for the third consecutiveyear, board members of yourAssociation of BellTel Retirees

succeeded in altering Verizon Com-munication’s corporate policiesthrough the proposal of shareholderproxies.

This year your fellow retiree advo-cates are back-at-it trying to correctcorporate policies that work againstthe benefit of company shareowners,with two proxy proposals.

One of the measures calls for“Awarding of Performance-BasedEquity Compensation” based uponperformance and growth of the com-pany and its value, asopposed the currentsystem which awardsmillions of dollars formediocrity. A secondmeasure would modify Verizon’sCorporate Governance Guidelines toensure that two-thirds of the compa-ny’s Board of Directors remains“independent,” as defined by theCouncil of Institutional Investors.

As of our news deadline Verizonhad appealed to the SecuritiesExchange Commission to request thePerformance Based Equity proxyproposal be taken off the shareownerballot and we had responded to theappeal, with a decision by the SECpending.

The performance-based equityproposal is being put forth by Associ-ation President C. William Jones. It

calls upon the Verizon board to adopta policy whereby at least 75% offuture long-term incentive compen-sation, including stock options andrestricted stock, etc. awarded to sen-ior executives be performance-based, with actual challenging per-formance metrics adopted by theBoard and disclosed to shareholders.

“Long term shareholders supportcompensation policies that providechallenging performance objectivesthat motivate senior executives toachieve long-term shareholdervalue,” said Mr. Jones. “We believethat a greater reliance on perform-

ance-based equitygrants that only payoff when senior exec-utives generate sub-

stantial value for share-holders is needed at Verizon. Unfor-tunately for many years the compen-sation of Verizon’s senior executiveshas been disconnected from returnsto shareholders.”

As example in Institutional Share-holder Services 2004 Proxy Analysisof Verizon, stated that CEO Seiden-berg’s $19.1 million compensation for2003 was “arguably excessive for acompany that had negative share-holder returns for the past one-,three- and five-year periods, a per-formance that trailed both the S&P500 Index and the S&P 500 telecomservices index, according toBloomberg Business News.” That

same year Glass Lewis & Company, aleading proxy consultant, awardedVerizon a “D” grade for pay-for-per-formance.

Until 2004, Mr. Seidenbergreceived the largest part of his totalcompensation in standard optiongrants. According to the 2005 proxy,he received 468,000 grants in 2004, 1.7million over the most recent three-year period, and held more than 5million total.

To its credit, over the past twoyears the Verizon Board has shiftedthe mix of long-term compensationtoward a greater emphasis on “per-formance stock units,” with payoutscontingent on the relative perform-ance of Verizon’s Total ShareholderReturn. In 2004, 60% of senior execu-tive long-term compensation wasgranted in the form of these stockunits.

According to Mr. Jones, “The prob-lem is that a closer look at the per-formance stock units agreementreveals that the performance hurdlesare what golfers might refer to as a“gimme.” For example, if 79% of thecompanies in the S&P 500 and indus-try peer groups outperform Verizon(that is, total return ranks at the 20thpercentile), the executive receives34% of the total value of the restrictedshares. If Verizon performs some-what below average – finishing at the45th percentile in total return – theexecutive receives 76.5%.

Jones added, “We believe theBoard should set a considerably high-er performance hurdle for long-termequity compensation. The policy wepropose would more tightly alignequity compensation with realincreases in shareholder wealth andpremium-priced options and per-formance-vesting equity grants areoptions that would tie long-termcompensation more closely toincreases in overall shareholdervalue.”

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The Association of BellTel Retireesand retiree shareowner Robert A.Rehm, the Association’s Chief Finan-cial Officer, are calling on the compa-ny to amend Verizon’s Corporate Gov-ernance Guidelines to provide that theboard nominate director candidates

Spring 2006BellTel Retiree8

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Retiree Shareholder Proxy Campaign 2006

(Continued on next page

PROXY 2006

so a two-thirds majority would beindependent.

The retiree’s definition of “inde-pendent” follows the standard adopt-ed by the Council of InstitutionalInvestors. This standard wouldrequire that a director not be consid-ered, if during the past five years theyhave been employed by the companyor an affiliate; a company-paid advi-sor or consultant; a significant suppli-

er or customer; a nonprofit thatreceives significant grants from thecompany; or a firm whose boardincludes an executive officer of thecompany.

Retirees believe an independentboard is particularly needed at Veri-zon, where the Corporate Library, anindependent corporate governanceresearch firm, rated Verizon’s Boardas one of the “ten worst” among 1,700companies analyzed in its 2003 BoardEffectiveness Ratings. According toCorporate Library, “the independ-ence of several directors remain inquestion. And the contracts and com-pensation policy forboth Seidenberg andformer co-CEO Leecontain virtually everyexample of excess andlack of control that could be found ata US corporation. ”

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In 2005 Verizon agreed to aretiree proxy requirement to rein-inSupplemental Executive RetirementPlan (SERP) income for senior exec-utives. Before the BellTel victory onthe SERP, senior executives receivedSERP contributions equal to 32 per-cent of their combined base salaryplus bonus for every dollar above$210,000 during their first 20 years inthe plan. After the first 20 years, theSERP contribution rate reduced to 7percent. In 2004 the payout amount-ed to $161 million and more than$400 million over three years,according to company estimates.The agreement negotiated by retireeleaders reduced these excessiveamounts including the 32 percentlevel down to a range of 4 to 7 per-cent.

In 2003, Verizon agreed to imple-

ment a retiree proposal to excludepension credits from the calculationof executive compensation, whichgained 43 percent of shareholdervotes the previous year. The retireesthen went on to shock the companywhen Verizon shareholders over-whelmingly voted to support anotherretiree-sponsored Executive Sever-ance Agreement Proposal by a mar-gin of 59 to 41 percent. The non-binding proposal limited overly-gen-erous executive compensation pack-ages and golden parachutes. It wasthe first proxy loss by Verizon or anyother Bell System company in its 100-

year history.In 2004, the retirees

were forced to comeback at the company

on the previous year’sproposal after Verizon executives andits Board of Directors failed to followshareholders’ mandate to limit over-ly-generous executive compensationpackages and golden parachutes.This time, when the retirees authoreda binding proxy proposal mandatingthe board to implement the change,Verizon relented, agreeing that thecompany will seek shareholderapproval for any future ExecutiveSeverance Agreement more than 2.99times an executive’s base salary andbonus.

“These victories show how withperseverance, the little shareholdercan create change for the better incorporate governance,” said Mr.Rehm. “It is our retirees who built thiscompany to greatness and we takepride in its successes, but at the sametime we remain vigilant if its moralcompass is directed off-center, show-ering riches on a select few at a hugecost to all shareowners and the com-pany’s legacy.”

Spring 2006 BellTel Retiree 9

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Retiree Shareholder Proxy Campaign 2006(Continued from previous page)

Yellow Pages WorkersReach Contract – End 14

Week Strike in NY

By a margin of over 2-1, strikingNew York State Verizon Infor-mation Service workers have

ratified a new collective bargainingagreement that will bring their 14-week strike to an end. The pactaffects some 300 employees repre-sented by the CWA.

“I congratulate the New York StateYellow Pages strikers for their out-standing solidarity and determina-tion over the last three months,” saidChris Shelton, Vice President, CWADistrict One. “They’ve won anexcellent contract with majorimprovements that will set the pat-tern for Yellow Pages workersthroughout the mid-Atlantic region.”

Under the new contract non-salesemployees will receive a 9.5% wageincrease over three years beginningin April and management is prohibit-ed from changing sales policies toreduce compensation. Employeecontributions toward health insur-ance are capped and will notincrease in the third year of the con-tract.

The new agreement also protectsthe pension benefits of unionizedVIS employees for the life of theircontracts. VIS workers had been cov-ered on the same pension plans thatare scheduled to freeze in July for50,000 Verizon Communicationsmanagers.

Nearly 300 strikers returned towork in Manhattan, Westchester, EastMeadow, Fishkill, Vestal, Syracuse,Albany and Buffalo on February 6.

PROXY 2006

Spring 2006BellTel Retiree10

Published by: Association of BellTel Retirees Inc.P.O. Box 33, Cold Spring Harbor, New York 11724 • (631) 367-3067website: www.belltelretirees.org

E-mail: association@belltelretirees.org Hotline: (800) 261-9222

A 501 C3 IRS tax-exempt corporation Circulation Exceeds 111,500

UNITED, TO PROTECT OUR FUTURE

Advertising Representative:Jim Falborn (212) 260-1731

President and Executive Director:C. William Jones (410) 770-9485

Office ManagerChristina M. Kruger (631) 367-3067

Board of Directors:John M. Brennan, Chairman (201) 666-8174

Michael S. Kucklinca,Executive Vice President (516) 741-2424

Eileen T. Lawrence, Treasurer (718) 229-6078Robert A. Rehm, Chief Financial Officer

(516) 827-0801Richard Knapp, Secretary (914) 779-6292

James E. Casey, Jr., Vice PresidentInformation Systems (540) 439-9568Pamela M. Harrison, Vice President

Union Relations (845) 225-6497Joanne Jacobsen, Director (941) 493-7874

John A. Parente, Vice PresidentMembership (518) 372-0526

Joseph A. Ristuccia, Vice PresidentGovernment Relations (631) 765-1111

Thomas J. Sisti, DirectorUnion Relations (201) 794-6494

Patricia Trent Wells, Director(212) 535-6859

Louis Miano, Director Emeritus(781) 444-8080

Association of BellTell Retirees Inc.

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Printing & Postage (Newsletter) 24.95%

Wages/Taxes 16.83%

Public relations/media 6.35%

Telephone/Website 1.73%

Professional Fees 12.28%

Publishing (Newsletter) 7.48%

Meeting/Travel 7.75%

Fundraising 7%

Office Overhead 7.44%

Dues/Contributions 8.54%

HOW MEMBER CONTRIBUTIONS HELP THE ASSOCIATION

12.28%

8.54%

24.95%

7.48%

6.35%

7%

1.73%

7.44%

16.83%7.75%

As we begin 2006, we would liketo take this opportunity to thankour office staff for their out-

standing work performance through-out the year and, in particular, for theirdedication in helping the many mem-bers who call us looking for assistance.Our staff constantly works with theboard, communicating members’ con-cerns, and making recommendationsfor improving overall administrativeoperations. They have our over-whelming thanks.

As required by the New York StateAttorney General’s Charities Bureau,BDO Seidman, LLP conducted an auditof our 2004 financial statements in May2005. The audit included examining,on a test basis, records, receipts, meth-ods and internal controls as supportingevidence of the amounts disclosed inour financial statements. The auditorsfound that our financial statementspresent fairly, in all material respects,the financial position of the Associationof BellTel Retirees Inc. at December 31,2004 and conform to accounting prin-ciples generally accepted in the UnitedStates of America. The audit’s state-ment of financial position as of Decem-ber 31, 2004 reflected total assets of$512,442.

Following is a brief preliminarysummary of our financial transactionsfor 2005. These results will be auditedin the second quarter of 2006.

RREEVVEENNUUEEOur 2005 revenue and other income

totaled $719,568, an increase of 5% forthe year. Increased media coverageand a concerted effort by the board andfellow retirees to seek out new mem-bers resulted in over 10,000 additional

2005 FINANCIAL REPORT

retirees being added to our membermailing list. Twenty-seven percent ofthe membership contributed in 2005,and the average contribution was$23.42. Thank you for your efforts tospread the word.

EEXXPPEENNSSEEOur expense for the year totaled

$658,077, reflecting a 2% reduction vs.2005. Publication of our newsletter,including printing, postage and adver-tising expense, continues to be ourlargest expense.

Wages and taxes remained at 16.8%of total expense. Your board is notcompensated, and continued todevote over 9,000 hours of volunteerwork in the year 2005 to help Verizonretirees and to highlight their needsnationwide.

Travel expense to reimburse theboard, and conference and annualmeeting expense decreased from 2005levels. We conducted several boardmeetings via conference calls, whichholds down travel expense.

Fundraising and PR/Media costswere the two categories that increasedin 2005 as a percent of total expenseand these expenses had a positive

impact on revenues. Printing andpostage costs associated with contact-ing new members are a major part ofour fundraising efforts, and we willincur increased postal rates in 2006.

(Continued on next page)

Spring 2006 BellTel Retiree 11

Dear Association,I just received my Winter 2005-

2006 issue of BellTel Retiree and wasreading the Member Mailbag. There isalways one rotten apple in the bottomof the barrel. W.M. in New Jersey is sooff base that it isn’t funny. Don’t letone nut ruin it for the rest of us. Youmembers that volunteer so much ofyour time deserve nothing but praise.Let it be known that your active

Member Mailbag

Nationwide media coverage for theAssociation and its retirees’ issues con-tinued to grow as more and more newssources sought our input and opin-ions. This is our best source for high-lighting the work of the Associationand our reputation as a leading advo-cate of retiree issues.

Telephone/Web site, Office Over-head and Professional Fees reflectedslight reductions in 2005. Under pro-fessional fees, we reduced the costsassociated with our proxy effort, andstrategically moved certain legal activi-ties to 2006.

Year-end results for 2005 reflect NetIncome of $61,491 and total assets of$564,550. We have a solid foundationfor 2006, and along with your contin-ued support we will implement impor-tant strategies in the legal, proxy andlegislative arenas.

Thank you.Eileen Lawrence, Treasurer

2005 FINANCIAL REPORT(Continued from previous page)

MEANINGFUL TIPS FROM A FELLOW RETIREE

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involvement never goes unnoticedto me and 99% of the other members.

Keep up the good work, you willalways have my support and helpwhen you need it.

Bob Ferguson (via email)* * *

Dear Association,I enjoy reading the newsletter and

look forward to receiving it. As a for-mer New Yorker (Brooklyn) it makesfeel I’m home again. I thank you foryour efforts in taking such good careof us, looking out for our interests.

Sincerely,Edith Martin, Miami, Florida

Spring 2006BellTel Retiree12

ASSOCIATION OF BELLTEL RETIREES INC.PO BOX 61, Glen Head, NY 11545-0061

Yes! I want to join the Association of BellTel Retirees Inc. I support you in your fightto protect the pension and benefit rights of both craft and management retirees andactive employees. Enclosed is my tax-deductible contribution of:

Active Employee Member* o $75 o $50 o $36.50‡ o $25 or Other $______

* All names are kept strictly confidential ‡ Only 10¢ a dayThe Association of BellTel Retirees is a 501 (c) (3) IRS • Tax-Exempt Corporation representing retirees and active employees of Verizon, all of its subsidiaries and all of the companies that were combined to form Verizon. 3/06

Retiree Member* o $75 o $50 o $36.50‡ o $25 o $20 or Other $_____

Check Enclosed o or Charge contribution to my o Visa o MasterCardCredit Card Acct.# _______________________________________Exp. Date ______Signature______________________________________________________________Name ______________________________________________________________________________

Address __________________________________________E-mail_______________________________

City/State/Zip Code: ___________________________________Telephone:__________________________

o Craft o Management I retired or expect to retire in (year) _____ from (Co.) _________________

On 2006 Retiree Prescription Plan Confusion

Over the recent months, someretirees have received lettersfrom Medco and other health

plans who provide prescription drugcoverage reminding of changes in pre-scription drug benefits. As previouslycommunicated by Verizon, some of

the changes are significant and shouldbe reviewed carefully to determine theimpact to each retiree and their familymembers.

Calls to our office show that there isconfusion regarding the informationprovided by the plans. While we

would love to help those who call,we are unable to provide completeand accurate information. Prescrip-tion drug coverage plans varydepending upon many factors, notthe least of which is the healthcareplan that you have selected. Further,a lot depends upon whether you areMedicare eligible and if your spouseis Medicare eligible.

Our best advice is to review all ofyour healthcare options to determineif there is a plan available to you thatprovides the type of healthcare andprescription drug coverage that youneed and is economically feasible.Refer to your annual benefits renewalmaterials for information about yourcurrent prescription drug benefit.

If you need more information, log onto the Your Benefits Resources™ Web site athttp://resources.hewitt.com/verizonor by calling 1-866-Ask-VzHR (1-877-275-8947). Say “Verizon Bene-fits Center,” and follow the instructionsto reach a Verizon Benefits Center rep-resentative.