EMPLOYEE MATTERS AGREEMENT by and among Verizon Communications Inc., New Communications Holdings Inc. and Frontier Communications Corporation dated as of May 13, 2009
Exhibit
10.2
by and
among
Verizon
Communications Inc.,
New
Communications Holdings Inc.
and
Frontier
Communications Corporation
dated as
of May 13, 2009
Page
TABLE
OF CONTENTS
(continued)
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TABLE
OF CONTENTS
(continued)
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EXHIBITS
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Exhibit
A.
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Actuarial
Assumptions and Methods for Pension Asset Transfer
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Exhibit
B.
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Sales
Commissions Programs
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Exhibit
C.
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Short
Term Incentive Programs
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Exhibit
2.1.
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Collective
Bargaining Agreements
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SCHEDULES
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Schedule
4.1(d).
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Minimum
Severance Benefits for Non-Union Employees
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Schedule
4.1(e).
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Performance
and Bonus Opportunities
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Schedule
5.2(c)(ii).
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Letter
of Direction
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This Employee Matters Agreement (this
“Agreement”),
dated as of May 13, 2009 is by and among Verizon Communications Inc., a Delaware
corporation (“Verizon”), New
Communications Holdings Inc. (“Spinco”), a Delaware
corporation, and Frontier Communications Corporation, a Delaware corporation
(“Frontier”)
(each a “Party”
and collectively, the “Parties”), and
effective as of the Effective Time of the Merger Agreement (except that certain
obligations under this Agreement, which apply by their express terms before the
Effective Time, shall be effective as of the first date the obligation applies
under the terms of this Agreement).
WHEREAS, the Board of Directors of
Verizon has determined that it is in the best interests of Verizon and its
stockholders to reorganize the Spinco Business (as defined below) such that such
business will be owned or operated by one or more subsidiaries of ILEC Spinco
Holdings Inc. and the Non-ILEC Spinco Subsidiary and to separate Spinco into an
independent company that will simultaneously merge with and into Frontier, an
independent public company;
WHEREAS, in furtherance of the
foregoing, Verizon and Spinco have entered into a Distribution Agreement, dated
as of May 13, 2009 (the “Distribution Agreement”) that will
govern the terms and conditions relating to the separation between Verizon and
Spinco;
WHEREAS, in furtherance of the
foregoing, Verizon, Spinco and Frontier have entered into a Merger Agreement,
dated as of May 13, 2009 (the “Merger Agreement”)
that will govern the terms and conditions relating to the merger of Spinco with
and into Frontier;
WHEREAS, in connection with the
foregoing, Verizon, Spinco and Frontier have agreed to enter into this Agreement
for the purpose of allocating current and former employees and employment
related assets, liabilities, and responsibilities with respect to employee
compensation and benefits, collective bargaining and other employment related
matters; and
WHEREAS, the parties to this Agreement
intend that, in accordance with the terms and conditions set forth herein, the
Spinco Employees (as defined below) shall maintain uninterrupted continuity of
employment, compensation and benefits and, also, with respect to union
represented employees, uninterrupted continuity of representation for purposes
of collective bargaining and uninterrupted continuity of coverage under their
collective bargaining agreements throughout each of the internal restructurings
and the merger as contemplated by the Distribution Agreement and the Merger
Agreement, including, but not limited to, the Internal Spinoffs, the Internal
Restructurings, the Contribution, the Distribution and the
Merger.
NOW, THEREFORE, in consideration of the
mutual promises contained herein, the Parties agree as follows:
DEFINITIONS
“Affiliate” has the
meaning ascribed to it in the Distribution Agreement.
“Agreement” means this
Employee Matters Agreement, and all exhibits, schedules, appendices and annexes
hereto.
“Benefit Payments” has
the meaning ascribed to it in Section 5.2(c).
“COBRA” has the
meaning ascribed to it in Section 6.3.
“Code” means the
United States Internal Revenue Code of 1986, as amended.
“Contributing
Companies” has the meaning ascribed to it in the Distribution
Agreement.
“Contribution” has the
meaning ascribed to it in the Distribution Agreement.
“Distribution” has the
meaning ascribed to it in the Distribution Agreement.
“Distribution
Agreement” has the meaning ascribed to it in the second recital to this
Agreement.
“Distribution Date”
has the meaning ascribed to it in the Distribution Agreement.
“EDP” means the
Verizon Executive Deferral Plan.
“Effective Time” has
the meaning ascribed thereto in the Merger Agreement.
“ESP” means the
Verizon Excess Savings Plan.
“Final Asset Transfer”
has the meaning ascribed to it in Section 5.2(c).
“Former Spinco
Employee” means any individual who had at any time provided services in
respect of the Spinco Business, but as of the Effective Time, (i) is receiving
long-term disability benefits, or (ii) is neither then actively employed by the
Spinco Business, nor then on an approved Leave of Absence or Layoff with Right
of Recall from any member of the Verizon or Spinco Groups.
“Former Verizon Business
Employees” means any Spinco Employee who was at any time employed in the
Verizon Business Operations and participated in a Verizon Business
Plan.
“Frontier” means
Frontier Communications Corporation.
“Frontier FSA” has the
meaning ascribed to it in Section 6.2(c).
“Frontier Group” means
Frontier and the Frontier Subsidiaries.
“Frontier Indemnitees”
means Frontier and each Affiliate of Frontier immediately after the Effective
Time and each of their respective present and former Representatives and each of
the heirs, executors, successors and assigns of any of the
foregoing.
“Frontier Liabilities”
means the liabilities assumed by Frontier pursuant to Section 11.1(b)
hereof.
“Frontier
Subsidiaries” mean all direct and indirect Subsidiaries of Frontier
immediately after the Effective Time.
“FRP” means the
Verizon Flexible Reimbursement Plan.
“FRP Participants” has
the meaning set forth in Section 6.2(c).
“Governmental
Authority” has the meaning set forth in the Merger
Agreement.
“GTE” has the meaning
ascribed to it in the Distribution Agreement.
“IDP” means the
Verizon Income Deferral Plan.
“ILEC Holdings” means
ILEC Spinco Holdings, Inc.
“ILEC CBAs” means any
and all collective bargaining agreements in effect on the date hereof governing
the wages, hours, terms and conditions of employment of any Spinco Employee,
including, but not limited to, MOAs, MOUs, letters of agreement and letters of
understanding, and any extensions or replacements thereof, each of which is
listed on Exhibit 2.1 hereof and all collective bargaining practices of the
applicable member of the Verizon Group to the extent said collective bargaining
practices are binding on the applicable member of the Verizon
Group.
“Indemnifiable Losses”
means all Losses, Liabilities, damages, claims, demands, judgments or
settlements of any nature or kind, including, but not limited to, all costs and
expenses (legal, accounting or otherwise) that are reasonably incurred relating
thereto, suffered by an Indemnitee, including, but not limited to, any costs or
expenses of enforcing any indemnity hereunder that are reasonably incurred and
all Taxes resulting from indemnification payments hereunder.
“Indemnifying Party”
means a Person that is obligated under this Agreement to provide
indemnification.
“Indemnitee” means a
Person that may seek indemnification under this Agreement.
“Initial Asset
Transfer” has the meaning ascribed to it in Section 5.2(c).
“Internal
Restructurings” has the meaning set forth in Section 2.1(a).
“Internal Spinoffs”
have the meaning set forth in the Merger Agreement.
“Layoff with Right of
Recall” means any Represented Employee who has been formally laid off by
any member of the Verizon Group or the Spinco Group under circumstances that
entitle such Represented Employee to a right of recall by his or her employer
and whose period of eligibility for recall pursuant to the ILEC CBAs has not
expired as of the Effective Time.
“Leave of Absence”
means a leave from active employment that is expected to continue following the
Effective Time and that (i) was granted in accordance with the applicable
policies and procedures (including, but not limited to, any policy or procedures
implemented to comply with the United Services Employment and Reemployment
Rights Act, the Family Medical Leave Act or similar state laws) of a member of
the Verizon Group or (ii) arose due to an illness or injury that results in the
individual being eligible for short-term disability benefits, accident benefits
or workers’ compensation under the Verizon short-term disability or accident
plan or state law. For the avoidance of doubt, any employee who is
not at work on the day of the Effective Time due to vacation, sickness or
accident that has not qualified the individual for short-term disability or
accident benefits, workers’ compensation or other temporary absence, but whose
employment continues in accordance with the Verizon Group’s employment policies
(such as due to the use of personal days), shall be considered to be actively at
work on the day of the Effective Time. Any individual who is
receiving long term disability benefits at the Effective Time shall not be
considered to be on a “Leave of Absence” for purposes of this
definition.
“Liabilities” means
any and all obligations, benefit entitlements, losses, claims, charges, debts,
demands, actions, costs and expenses (including, but not limited to, those
arising under any contract, collective bargaining agreement, or Plan, and
administrative and related costs and expenses of any plan, program, or
arrangement), of any nature whatsoever, whether absolute or contingent, vested
or unvested, matured or unmatured, liquidated or unliquidated, accrued or
unaccrued, known or unknown, whenever arising.
“Losses” has the
meaning ascribed to it in the Merger Agreement.
“Merger” has the
meaning ascribed to it in the Merger Agreement.
“Merger Agreement” has
the meaning ascribed to it in the third recital to this Agreement.
“Mid-Atlantic Associates
Plan” means the Verizon Pension Plan for Mid-Atlantic
Associates.
“Non-ILEC Spinco
Subsidiary” has the meaning set forth in the Distribution
Agreement.
“Original Option” has
the meaning ascribed to it in Section 8.2.
“Outstanding Awards”
has the meaning ascribed to it in Section 8.1.
“Party” has the
meaning ascribed to it in the preamble to this Agreement.
“Parties” has the
meaning ascribed to it in the preamble to this Agreement.
“PBO” has the meaning
ascribed to it in Section 5.2(b).
“Pension Plan Asset Transfer
Amount” means, in the case of a transfer of assets and liabilities from a
Verizon Pension Plan to a Spinco Pension Plan, the amount required to be
transferred pursuant to Section 5.2.
“Person” has the
meaning ascribed to it in the Distribution Agreement.
“PSU” has the meaning
ascribed to it in Section 8.3.
“Record Date” has the
meaning ascribed to it in the Distribution Agreement.
“Record Date Option”
has the meaning ascribed to it in Section 8.4.
“Remaining Option” has
the meaning ascribed to it in Section 8.2.
“Represented Employee”
means any Spinco Employee whose wages, hours, terms and conditions of employment
are governed by an ILEC CBA.
“Retained Employee”
means any individual who, as of the Effective Time, (i) is actively
employed by, or on an approved Leave of Absence or Lay-off with Right of Recall
from, a member of the Verizon Group or the Spinco Group, (ii) had been
primarily employed in the Spinco Business and (iii) whose employment a
member of the Verizon Group determines not to transfer to a member of the
Frontier Group.
“Representative”
means, with respect to any Person, any of such Person’s directors, managers or
persons acting in a similar capacity, officers, employees, agents, consultants,
financial and other advisors, accountants, attorneys and other
representatives.
“RSU” has the meaning
ascribed to it in Section 8.3.
“Sales Commission
Program” means the programs listed on Exhibit B of this
Agreement.
“Short Term Incentive
Plan” means the Plans listed on Exhibit C of this Agreement.
“Spinco Business” has
the meaning ascribed to it in the Distribution Agreement.
“Spinco Common Stock”
has the meaning ascribed to it in the Distribution Agreement.
“Spinco Dependents”
means, with respect to any Spinco Employee, any individual who, by virtue of a
relationship with a Spinco Employee, is eligible to receive benefits under the
terms of any applicable Verizon Pension Plan, Verizon Savings Plan, or Verizon
Welfare Plan immediately prior to the Effective Time. For the
avoidance of doubt, a Spinco Dependent only includes those persons who actually
meet the relevant plan’s requirements to be a dependent as of an applicable
time.
“Spinco Employee”
means any individual who at the Distribution Date (i) is either (A)
actively employed (whether on a full or part-time basis) by, or (B) on a Leave
of Absence or Layoff with Right of Recall from, a member of the Spinco or
Verizon Group, and whose primary duties at the Effective Time (or, in respect of
an individual on a Leave of Absence or Layoff with Right of Recall, on his or
her last date of active employment) were related to the Spinco Business, and
(ii) is not a Retained Employee.
“Spinco Excess Pension
Plan” has the meaning given to it in Section 5.1.
“Spinco Group” has the
meaning set forth in the Distribution Agreement.
“Spinco Liabilities”
means the liabilities assumed by Spinco pursuant to Section 11.1(a)
hereof.
“Spinco Management Pension
Plan” has the meaning ascribed to it in Section 5.1.
“Spinco Management Savings
Plan” has the meaning ascribed to it in Section 7.1(a).
“Spinco Mirror Plans”
means the Spinco Welfare Plans, the Spinco Management Pension Plan, the Spinco
Union Pension Plans, the Spinco Excess Pension Plan, the Spinco Management
Savings Plan and the Spinco Union Savings Plans.
“Spinco Pension Plans”
mean the Spinco Management Pension Plan, the Spinco Excess Pension Plan and the
Spinco Union Pension Plans.
“Spinco Plan” means
any plan, policy, program, payroll practice, on-going arrangement, contract,
trust, insurance policy or other agreement or funding vehicle, whether written
or unwritten, maintained or sponsored by any member of the Spinco Group or
Frontier Group that will provide compensation or benefits to any Spinco Employee
or Spinco Dependent.
“Spinco Savings Plans”
has the meaning ascribed to it in Section 7.1(a).
“Spinco Subsidiary”
has the meaning set forth in the Distribution Agreement.
“Spinco Trust” has the
meaning ascribed to it in Section 5.2(c).
“Spinco Union Pension
Plans” has the meaning ascribed to it in Section 5.1(b).
“Spinco Union Savings
Plans” has the meaning ascribed to it in Section 7.1(a).
“Spinco Welfare Plans”
has the meaning ascribed to it in Section 6.2.
“Stand-Alone Plan”
means each of the GTE California Incorporated Plan for Hourly-Paid Employees’
Pensions, the GTE Florida Incorporated Plan for Hourly-Paid Employees’ Pensions,
the GTE North Incorporated Pension Plan for Hourly-Paid Employees of Wisconsin,
the GTE North Incorporated Pension Plan for Hourly-Paid Employees of Ohio, the
GTE North Incorporated Pension Plan for Hourly-Paid Employees of Michigan, the
GTE North Incorporated Pension Plan for Hourly-Paid Employees of Illinois, the
GTE Northwest Incorporated Plan for Hourly-Paid Employees’ Pension (Washington,
Oregon and Idaho), the GTE South Incorporated (Southeast) Plan for Hourly-Paid
Employees’ Pensions (North Carolina and South Carolina), the GTE Southwest
Incorporated Plan for Hourly-Paid Employees’ Pensions (Arizona and Nevada), and
the GTE Supply Pension Plan for Union Represented Employees (including as
components the GTE Midwest Incorporated Plan for Hourly-Paid Employees’ Pensions
and the GTE North Incorporated Pension Plan for Hourly-Paid Employees of Indiana
(Indiana, Illinois, Michigan, Ohio and Wisconsin)).
“Subsidiary” has the
meaning set forth in the Merger Agreement.
“Taxes” has the
meaning ascribed to it in the Merger Agreement.
“Territory” has the
meaning ascribed to it in the Distribution Agreement.
“Third-Party Claim”
has the meaning ascribed to it in the Merger Agreement.
“Time-Off Benefits”
has the meaning ascribed to it in Section 6.6.
“Unavailable Employee”
has the meaning ascribed to it in Section 4.3.
“Verizon” means
Verizon Communications Inc.
“Verizon Business
Operations” means the operations of Verizon Business, a division of
Verizon.
“Verizon Business
Plans” means the Pension Plan for Employees of MCI Communications
Corporation and Subsidiaries and the Western Union (WIDS) Pension
Plan.
“Verizon Common Stock”
has the meaning ascribed to it in the Distribution Agreement.
“Verizon Employee”
means any individual who, at the relevant time, is actively employed by, or on
an approved leave of absence or lay-off with right of recall from, a member of
the Verizon Group.
“Verizon Excess Plan”
has the meaning ascribed to it in Section 5.1.
“Verizon Group” means
Verizon and the Verizon Subsidiaries.
“Verizon Indemnitees”
means Verizon, each Affiliate of Verizon immediately after the Contribution and
each of their respective present and former Representatives and each of the
heirs, executors, successors and assigns of any of the foregoing.
“Verizon Liabilities”
means all Liabilities of Verizon or any of the Verizon
Subsidiaries. In no event shall the term Verizon Liabilities include
any Liabilities that are transferred from or otherwise cease to be Liabilities
of any member of the Verizon Group pursuant to this Agreement or that are to, or
have become, Spinco Liabilities.
“Verizon Management Savings
Plan(s)” means the Verizon Savings Plan for Management Employees and the
Verizon Business Savings Plan.
“Verizon Plan” means
any plan, policy, program, payroll practice, on-going arrangement, contract,
trust, insurance policy or other agreement or funding vehicle, whether written
or unwritten, maintained or sponsored by Verizon or any of its Subsidiaries or
Affiliates (or any of their respective predecessors) at any time on or prior to
the Distribution Date for the purpose of providing compensation or benefits to
any current or former employee of any such person.
“Verizon Pension
Plans” mean the VMPP, the Verizon Excess Plan, the Mid-Atlantic
Associates Plan and each of the Stand Alone Plans.
“Verizon Pre-Distribution
Stock Value” means the closing price per share of Verizon Common Stock
trading on the “regular way” basis (based on the reported value inclusive of the
right to participate in the Distribution) on the Distribution Date.
“Verizon Post-Distribution
Stock Value” means the opening price per share of Verizon Common Stock on
the first trading day following the Distribution Date.
“Verizon Savings
Plans” mean the Verizon Management Savings Plan and the Verizon Union
Savings Plans.
‘‘Verizon Share Ratio”
means the quotient obtained by dividing the Verizon Pre-Distribution Stock Value
by the Verizon Post-Distribution Stock Value; provided, however, that in no
event shall the Verizon Share Ratio be less than one.
“Verizon Stock Option”
has the meaning ascribed to it in Section 8.2.
“Verizon Subsidiaries”
mean all direct and indirect Subsidiaries that are, or continue to be,
Subsidiaries of Verizon immediately after the Distribution Date. For
the avoidance of doubt, for purposes of this Agreement no member of the Spinco
Group or the Frontier Group shall be a Verizon Subsidiary.
“Verizon Trust” has
the meaning ascribed to it in Section 5.2(c).
“Verizon Union Savings
Plans” means the Verizon Savings and Security Plan for Mid-Atlantic
Associates and the Verizon Savings and Security Plan for West Region Hourly
Employees.
“Verizon Welfare
Plans” has the meaning ascribed to it in Section 6.1.
“VMPP” has the meaning
ascribed to it in Section 5.1.
Section 1.2. Capitalized Terms. Any
other capitalized term used, but not defined herein, but defined in the
Distribution Agreement or the Merger Agreement, shall have the meaning ascribed
thereto in the Distribution Agreement or the Merger Agreement.
COLLECTIVE
BARGAINING AGREEMENTS AND OBLIGATIONS
(a) Distribution
(i) Prior
to the Distribution Date, in connection with each of the internal
restructurings, Internal Spinoffs and the contributions undertaken by Verizon in
contemplation of, and in connection with, the Contribution, Distribution and
Merger, including, but not limited to, the Internal Spinoffs, Internal
Restructurings and Contribution to be effected in accordance with the
Distribution Agreement (the “Internal
Restructurings”), Verizon shall cause one or more members of the Verizon
Group to take any and all actions needed to effectuate: (1) the continued
uninterrupted employment of the Represented Employees, in accordance with the
ILEC CBAs, by the appropriate member of the Verizon Group, and (2) the
assumption and uninterrupted continuation of the ILEC CBAs covering the
Represented Employees by the appropriate member of the Verizon Group, including
but not limited to, (i) the continued uninterrupted representation for purposes
of collective bargaining of those Represented Employees by their unions, in
accordance with the ILEC CBAs, with the appropriate member of the Verizon Group,
(ii) the continued uninterrupted compensation of the Represented Employees in
accordance with the ILEC CBAs, and (iii) the continued uninterrupted benefit
coverage of the Represented Employees under the appropriate Verizon Plans in
accordance with the ILEC CBAs. In addition, from and after the
Distribution Date and until the Effective Time, Verizon shall allow ILEC
Holdings to be a participating employer in the Verizon Plans to the extent
necessary to allow ILEC Holdings to meet its obligations under Section
2.1(a)(ii)(1) below. Without limiting the generality of the
foregoing, Verizon shall cause:
(1) ILEC Holdings and the
Non-ILEC Spinco Subsidiary to be formed and at and from (x) the time that GTE
or Verizon contributes or causes to be contributed to ILEC Holdings the stock of
certain entities that will be Spinco Subsidiaries and certain assets and
liabilities associated with the Spinco Business until (y) the Distribution
Date, and as and to the extent applicable, Verizon shall add and maintain one or
more Spinco Subsidiaries as participating companies in the applicable Verizon
Plans in which the Represented Employees are eligible to participate and shall
also cause the appropriate Spinco Subsidiary to, and such appropriate Spinco
Subsidiary shall, (1) employ the Represented Employees in accordance with
the ILEC CBAs, and (2) assume (if and to the extent necessary) and honor
the ILEC CBAs governing the employment of such Represented Employees, including
but not limited to, (i) recognize the unions representing those Represented
Employees as their collective bargaining representative in accordance with the
ILEC CBAs, (ii) continue uninterrupted the compensation of the Represented
Employees in accordance with the ILEC CBAs, and (iii) become a
participating company in the Verizon Plans in which such Represented Employees
are eligible to participate in accordance with the ILEC CBAs;
(2) at and from the time
that each Contributing Company other than GTE contributes to ILEC Holdings or
the Non-ILEC Spinco Subsidiary or to another entity that, following the Internal
Spinoffs, the Internal Restructuring and the Contribution will be a Spinco
Subsidiary, its assets and liabilities associated with the Spinco Business and
its Spinco Employees (including, but not limited to, Represented Employees)
until (y) the Distribution Date, ILEC Holdings or the Non-ILEC Spinco Subsidiary
shall or shall cause the appropriate member of the Spinco Group, (1) to employ the
Represented Employees in accordance with the ILEC CBAs, and (2) to assume (if
and to the extent necessary) and honor the ILEC CBAs governing the employment of
such Represented Employees, including, but not limited to, (i) recognize the
unions representing those Represented Employees as their collective bargaining
representative in accordance with the ILEC CBAs, (ii) continue uninterrupted the
compensation of such Represented Employees in accordance with ILEC CBAs, and
(iii) cause the appropriate member of the Spinco Group to be a participating
company in the Verizon Plans in which the Represented Employees are eligible to
participate in accordance with the ILEC CBAs; and
(3) sponsorship of the
Stand-Alone Plans to be transferred to a member of the Verizon Group (other than
Spinco or any Subsidiary thereof) prior to the Distribution Date.
(ii) On
or before and effective as of the Distribution Date, Spinco shall:
(1) adopt and sponsor, or
cause to be adopted and sponsored by the appropriate member of the Spinco Group,
the Spinco Mirror Plans which, in respect of the participation therein by the
Represented Employees, are to be identical in all material respects to the
corresponding Verizon Plans that covered the Represented Employees prior to the
Distribution Date; and
(2) acknowledge that ILEC
Holdings and each other appropriate member of the Spinco Group is a
participating company in the Spinco Mirror Plans in which the Represented
Employees are eligible to participate in accordance with the ILEC CBAs;
and
(3) cause ILEC Holdings and
the Non-ILEC Spinco Subsidiary, as the case may be, and each appropriate member
of the Spinco Group to (1) continue to
employ the Represented Employees in accordance with the ILEC CBAs, and (2) continue to
honor the ILEC CBAs, including but not limited to, (i) continuing to recognize
the unions representing those Represented Employees as their collective
bargaining representative in accordance with the ILEC CBAs, and (ii) continuing
uninterrupted the compensation of such Represented Employees in accordance with
the ILEC CBAs.
(b) Merger
(i) As
of the Effective Time, Frontier shall:
(1) assume and become
sponsor of, or cause the appropriate member of the Frontier Group to assume and
become sponsor of, the Spinco Mirror Plans covering Represented
Employees;
(2) cause the trustee of the
Spinco Trust to accept the asset transfer described in Section 5.2(c) and
administer the Spinco Trust assets funding the pension plans covering the
Represented Employees;
(3) acknowledge that the
appropriate member of the Frontier Group is a participating company in the
Spinco Mirror Plans in which such Represented Employees are eligible to
participate in accordance with the ILEC CBAs; and
(4) cause the appropriate
member of the Frontier Group to (1) continue to
employ the Represented Employees in accordance with the ILEC CBAs, and (2) continue to
honor the ILEC CBAs, including but not limited to, (i) continuing to recognize
the unions representing those Represented Employees as their collective
bargaining representative in accordance with the ILEC CBAs and (ii) continuing
uninterrupted the compensation of such Represented Employees in accordance with
the ILEC CBAs.
(ii) As
of the Effective Time, any and all binding obligations of any member of the
Verizon Group arising out of, relating to or resulting from the ILEC CBAs or the
Verizon Plans with respect to Represented Employees shall become and be solely
the obligations of the Frontier Group and shall be performed by the Frontier
Group; provided
that Verizon or a Verizon Plan shall be responsible for (1) all
Liabilities attributable to any individual who is a Former Spinco Employee and
(2) all Liabilities relating to (A) medical, vision, or dental plan claims in
respect of services that were performed or goods provided prior to the Effective
Time, (B) life insurance claims in respect of deaths occurring on or prior to
the Effective Time, and (C) any payments due to any Represented Employee
under the terms of a Verizon short-term disability plan with respect to any
period prior to the Effective Time; and, provided, further, that Frontier shall
have no responsibility for claims that were incurred prior to the Effective Time
under any long term care plans. For the avoidance of doubt, with
respect to any payments due to any Represented Employee for short-term
disability, the obligations to make payments with respect to any period at or
after the Effective Time shall be the sole responsibility of Frontier or a
Frontier Mirror Plan. Nothing in this section 2.1(b) or this
Agreement shall preclude Frontier or, as applicable, any member of the Frontier
Group from bargaining in good faith, after the Effective Time, with the unions
representing those Represented Employees.
(c) Compensation and Benefits of
Represented Employees. Without limiting the generality of the
foregoing, (i) from the consummation of each of the steps of the Internal
Restructurings and prior to the Distribution Date, Verizon, and (ii) as of
the Distribution Date, Spinco and (iii) as of the Effective Time, Frontier
shall each be responsible to, and shall, assure that the compensation, benefits,
hours, terms and conditions of employment of Represented Employees shall
continue to be governed by the ILEC CBAs.
SPINCO
PLANS GENERALLY
On or before, and effective as of, the
Distribution Date, Spinco shall have adopted the Spinco Mirror Plans for the
Spinco Employees that are not Represented Employees. As of the
Distribution Date, each Spinco Mirror Plan shall provide benefits that are
identical in all material respects to the corresponding Verizon Plan as in
effect immediately prior to the Distribution Date. Immediately after
the Effective Time, the terms of the Spinco Mirror Plans, as they relate to
Spinco Employees that are not Represented Employees, shall be governed by
Section 4.1(e), and Frontier shall have all rights described under the last
sentence in Section 3.2.
Except as otherwise expressly provided
herein with respect to the EDP, ESP and IDP, each of the Spinco Plans shall be,
with respect to Spinco Employees who are participants in such plan, in all
respects, the successor in interest to and shall recognize all rights and
entitlements that are accrued as of the Distribution Date under the
corresponding Verizon Pension Plan or Verizon Savings Plan in which such Spinco
Employee participated prior to the Distribution Date. Verizon, Spinco
and Frontier agree that Spinco Employees are not entitled to receive duplicative
benefits from the Verizon Plans, the Spinco Plans, and, if applicable, any
collective bargaining agreements. Prior to and after the Effective
Time, Verizon and Frontier agree to cooperate with each other and to provide, or
cause to be provided, all reasonably requested data, documents, or other
information necessary to avoid such duplication of benefits.
With respect to Spinco Employees, each Spinco Plan shall provide that all
service, all compensation, and all other factors affecting benefit
determinations that, as of the Distribution Date, were recognized under the
corresponding Verizon Plan (for periods immediately before the Distribution
Date) shall receive full recognition and credit and be taken into account under
such Spinco Plan to the same extent as though arising under such Spinco Plan,
except to the extent that duplication of benefits would result. All
beneficiary designations made by Spinco Employees under the corresponding
Verizon Plans shall be transferred to and be in full force and effect under the
corresponding Spinco Plans until such beneficiary designations are replaced or
revoked by the Spinco Employee who made the beneficiary
designation. As soon as administratively practicable, but in no event
later than sixty (60) days, following the Effective Time, Verizon shall provide
Frontier with copies of all documents containing such beneficiary designations;
provided that following the Effective Time, Verizon shall promptly provide
Frontier any information regarding beneficiary designations that is reasonably
required in the administration of the Spinco Plans for the Spinco
Employees.
Notwithstanding the foregoing
provisions of this Section 3.2 and subject to any collective bargaining
agreements and obligations, nothing in this Agreement to the contrary, other
than those provisions specifically set forth herein, shall preclude Frontier
(or, as applicable, any member of the Frontier Group) from amending, merging,
modifying, terminating, eliminating, reducing, or otherwise altering in any
respect after the Effective Time any Spinco Plan, any benefit under any Spinco
Plan or any trust, insurance policy or funding vehicle related to any Spinco
Plan.
EMPLOYEES
(a) General. In
the event that any individual defined as a Spinco Employee will not
automatically become or continue to be an employee of the Spinco Group as of the
Distribution Date as a result of the internal restructuring undertaken by
Verizon in contemplation of, and in connection with, the Distribution and
Merger, and as a result of the Merger, Verizon agrees to cause the employment of
such Spinco Employees to be transferred to the appropriate member of the
Frontier Group, and the appropriate member of the Frontier Group agrees to
accept such transferred employee, as of the Effective
Time. Notwithstanding the foregoing, Retained Employees and all other
individuals employed by the Verizon Group at the Effective Time who are not
Spinco Employees shall remain employees of Verizon or another member of the
Verizon Group immediately following the Effective Time. Within five
(5) business days before the Effective Time, Verizon shall provide Frontier with
a list of all Spinco Employees who, as of a reasonably practicable prior date,
were on Leave of Absence or Lay-off with Right of Recall. No later
than ten (10) business days after the Effective Time, Verizon shall provide
Frontier a final list of Spinco Employees on Leave of Absence or Lay-off with
Right of Recall at the Effective Time. Verizon shall also identify
each Retained Employee by written notice delivered to Frontier promptly
following the time at which such person has been identified as a Retained
Employee, but in all events not later than six calendar months following the
execution of the Merger Agreement, except to the extent that Frontier provides
its written consent with respect to one or more persons. In addition,
not later than three calendar months following the execution of the Merger
Agreement, Verizon shall identify by name each individual who is reasonably
anticipated to be a Spinco Employee, and shall periodically update this list as
reasonably requested by Frontier during the period through the Effective Time,
with a final list provided to Frontier no later than the Effective
Time.
(b) Compensation and Benefits of
Represented Employees. Without limiting the generality of
anything in this Agreement, the compensation, benefits, hours, terms and
conditions of employment of Represented Employees shall continue to be
determined in accordance with the applicable ILEC CBAs.
(c) Non-Termination of
Employment or Benefits. Except as otherwise expressly and
specifically provided herein, (i) no provision of this Agreement, the
Distribution Agreement or the Merger Agreement, (ii) no actions or Internal
Restructurings by the Verizon Group or the Spinco Group taken in contemplation
of, or in connection with, this Agreement, the Distribution Agreement or the
Merger Agreement, (iii) no actions taken by or between the Verizon Group and the
Spinco Group at the times of the Internal Restructurings and Distribution, and
(iv) no actions taken by or between the Verizon Group, the Spinco Group and the
Frontier Group at the times of the Distribution and Merger, shall be construed
to create any right, or accelerate any entitlement, to any compensation or
benefit whatsoever on the part of any Spinco Employee or any employee employed
by any member of the Verizon Group or (except to the extent disclosed in Section
6.12(f) of the Company Disclosure Letter to the Merger Agreement) the Frontier
Group, or to limit the
ability of the Frontier Group to administer any Spinco Plan in accordance with
its terms (subject to any applicable collective bargaining
agreement). Without limiting the generality of the foregoing, nothing
described above in this Section 4.1(c) shall cause any employee of any member of
the Verizon Group or the Spinco Group, or any Spinco Employee employed by a
member of the Frontier Group to be deemed to have incurred a termination of
employment or to have created any entitlement to any severance benefits or the
commencement of any other benefits under any Verizon Plan or any collective
bargaining agreement, other than a Verizon Business Plan, and as applicable, the
EDP, IDP, and ESP.
(d) No Right to Continued
Employment. Subject to the ILEC CBAs, nothing contained in
this Agreement shall confer on any employee of any member of the Verizon Group
or any Spinco Employee any right to continued
employment. Notwithstanding the foregoing or the provisions of any
ILEC CBA, during the first 18 months after the Effective Time, Frontier shall
not, and shall not permit any Subsidiary of ILEC Holdings to, terminate the
employment, other than for cause, of any of the employees who, as of the
Effective Time, are actively employed as installers or technicians or who, as of
the Effective Time, are on a Leave of Absence or other authorized absence with a
right to reinstatement. For purposes of this provision, “cause” shall
be determined by Frontier or the applicable member of the Frontier Group and
shall include, without limitation, any misconduct or failure to follow
Frontier’s policies and procedures; provided, however, that with respect to any
Represented Employee, any termination of employment for cause must comply with
the terms of the applicable collective bargaining agreement. Except
as specifically provided in this Section 4.1(d), as well as Sections 4.1(b) and
4.1(e), and subject to the ILEC CBAs, this Agreement shall not limit the ability
of Frontier to change, at any time after the Effective Time and in its sole
discretion, a Spinco Employee’s position, compensation or benefits for
performance-related, business or any other reasons or require any member of the
Frontier Group to continue the employment of a Spinco Employee for any
particular period of time after the Effective Time, provided that Frontier shall
bear all liability for any such termination of employment, and, with respect to
any such terminations of employment of any Spinco Employee occurring prior to
the first anniversary of the Effective Time, shall provide to any terminated
Spinco Employee (other than a Represented Employee) severance and termination
benefits no less favorable in the aggregate than the severance and termination
benefits that are described on Schedule 4.1(d) to this Agreement.
(e) Continuation of Compensation
and Benefits for Spinco Employees who Are Not Represented
Employees. With respect to Spinco Employees who are not
Represented Employees, for a period of one year following the Effective Time,
Frontier shall, or shall cause another member of the Frontier Group to,
(i) pay all such non-represented Spinco Employees at least the same rate
of base salary as was paid to each such non-represented Spinco Employee by
Spinco or the Verizon Group immediately prior to the Effective Time, and
(ii) continue to provide annual bonus opportunities to each such
non-represented Spinco Employee at the same target level as annual bonus
opportunities described on Schedule 4.1(e) to this Agreement, which were made
available to such non-represented Spinco Employee immediately prior to the
Effective Time, provided, however, that, for periods after the Effective Time,
Frontier shall use Frontier performance metrics similar to the metrics used for
other similarly situated Frontier employees. With respect to Spinco
Employees who are not Represented Employees, for the remainder of the calendar
year in which the Effective Time occurs, Frontier shall, or shall cause another
member of the Frontier Group to continue to provide each such non-represented
Spinco Employee and, if and to the extent applicable, Spinco Dependents benefits
under the Spinco Mirror Plans which are substantially comparable in the
aggregate to those made available to such non-represented Spinco Employees and,
if and to the extent applicable, Spinco Dependents under the Verizon Pension
Plans, the Verizon Savings Plans and the Verizon Welfare Plans immediately prior
to the Effective Time. Notwithstanding the foregoing, Frontier shall
(i) provide to each Spinco Employee who was employed by GTE or one of its
affiliates at May 18, 1999 and who, at such date, either was (A) eligible to
retire and receive retiree welfare benefits or (B) within five years of
eligibility for such retiree welfare benefits, retiree welfare benefits for such
individual’s lifetime that are identical in all material respects to the
benefits provided under the applicable Verizon Welfare Plan at May 18, 1999;
provided, however, that Frontier shall be afforded the same reservation of
rights afforded to Verizon in respect of such benefits and (ii) provide to each
applicable Spinco Employee the severance benefits described in Section
4.1(d).
(f) Certain Tax
Matters. Verizon and Frontier hereby agree that, for purposes
of social security, unemployment and other U.S. payroll taxes and to the extent
legally permissible, Frontier, Spinco or ILEC Holdings shall be treated as a
successor employer with respect to each Spinco Employee in the calendar year
that contains the Effective Time. In connection with the foregoing,
the parties agree to follow the “Alternative Procedures” set forth in Section 5
of Revenue Procedure 2004-53. The parties understand and agree that
Frontier, Spinco or ILEC Holdings, as the successor employer, shall assume the
entire Form W-2 reporting obligations for such Spinco Employees for the calendar
year that contains the Effective Time, provided that Verizon shall provide
reasonable assistance to Frontier in completing such reporting
obligations.
(a) Except
as otherwise mutually agreed upon between the Parties, for the period commencing
on the execution of this Agreement and ending twelve months from the Effective
Time, in respect of employees of the Frontier Group, neither Verizon nor any
member of the Verizon Group shall, directly or indirectly, induce or attempt to
induce any employee of the Frontier Group to leave the employ of Frontier or any
member of the Frontier Group or violate the terms of their contracts or any
employment arrangements with Frontier or any member of the Frontier Group; provided, however, that neither
Verizon nor any member of the Verizon Group shall be deemed to be in violation
of this Section 4.2(a) solely by reason of a general job posting internal to
members of the Verizon Group or a general solicitation to the public or general
advertising.
(b) Except
as otherwise mutually agreed upon between the Parties, for the period commencing
on the execution of this Agreement and ending twelve months from the Effective
Time, in respect of Verizon Employees, neither Frontier nor any member of the
Frontier Group shall, directly or indirectly, induce or attempt to induce any
Verizon Employee to leave the employ of Verizon or any member of the Verizon
Group or violate the terms of their contracts or any employment arrangements
with Verizon or any member of the Verizon Group; provided, however, that neither
Frontier nor any member of the Frontier Group shall be deemed to be in violation
of this Section 4.2(b) solely by reason of a general job posting internal to
members of the Frontier Group or a general solicitation to the public or general
advertising.
Notwithstanding anything to the
contrary in Section 4.2, except as otherwise mutually agreed upon between the
Parties, from the period beginning on the date on which the Merger Agreement is
executed and ending on the first anniversary of the Effective Time: (i) neither
Frontier nor any member of the Frontier Group shall employ (directly or
indirectly as a contractor) any Verizon Employee or any employee of the Verizon
Group who has voluntarily separated from employment with Verizon or any member
of the Verizon Group within the immediately preceding six months; and, (ii)
neither Verizon nor any member of the Verizon Group shall employ
(directly or indirectly as a contractor) any employee of the Frontier Group who
has voluntarily separated from employment with Frontier or any member of the
Frontier Group within the immediately preceding six months (each, an “Unavailable
Employee”). After the six month anniversary of the voluntary
separation of any Unavailable Employee, Frontier or any member of the Frontier
Group and Verizon or any member of the Verizon Group, as the case may be, may
employ or retain as a contractor such individual in its sole
discretion.
PENSION
PLANS
(a) Spinco Management Pension
Plan and Excess Plan. Effective as of the Distribution Date,
Spinco or a member of the Spinco Group shall establish defined benefit pension
plans to facilitate the benefit transfers contemplated herein for employees who
are not Represented Employees. One such plan, which shall be
qualified under Section 401(a) of the Code, will be responsible for benefits of
participants and beneficiaries in the Verizon Management Pension Plan (the
“VMPP”) who are
Spinco Employees or are entitled to receive a benefit in respect of a Spinco
Employee (the “Spinco
Management Pension Plan”). The other such plan, which shall
not be qualified under Section 401(a) of the Code, will be responsible for
benefits of participants and beneficiaries in the Verizon Excess Pension Plan
(the “Verizon Excess
Plan”) who are Spinco Employees or are entitled to receive a benefit in
respect of a Spinco Employee (the “Spinco Excess Pension
Plan”). Effective as of the Distribution Date, Spinco or a
member of the Spinco Group shall establish (or identify an existing trust as)
the Spinco Trust. Each Spinco Management Pension Plan shall be
identical in all material respects to the corresponding Verizon Pension Plan in
which the applicable Spinco Employees participated immediately prior to the
Distribution Date. Spinco shall provide Frontier with a copy of those
plans and such trust prior to their adoption in order to provide Frontier an
opportunity to comment on their form. Spinco agrees to consult with
Frontier and, subject to the obligations of the Parties under this Agreement, to
reasonably consider such comments, but Frontier’s comments shall be advisory
only and Spinco shall retain full discretion as to the form of the plans and
trusts.
As of and from the Distribution Date
and until the Effective Time, Spinco, and as of and from the Effective Time,
Frontier shall be responsible for taking or causing to be taken all necessary,
reasonable, and appropriate action to establish, maintain and administer the
Spinco Management Pension Plan, so that it qualifies under Section 401(a) of the
Code and the related trust thereunder is exempt from Federal income taxation
under Section 501(a) of the Code. For the avoidance of doubt, prior
to and following the Effective Time, Verizon shall provide Frontier all
reasonably requested information, files, and documents necessary for Frontier to
so maintain and administer the Spinco Management Pension Plan.
(b) Spinco Union Pension Plans
and Trust. Effective as of the Distribution Date, Spinco or a
member of the Spinco Group shall establish one or more pension plans qualified
under Section 401(a) of the Code (the “Spinco Union Pension
Plans”) and one or more related trusts to provide retirement benefits to
Spinco Employees who are Represented Employees and to persons entitled to
receive a benefit in respect of such a Represented Employee, and who, in either
case, are participants in or beneficiaries under one of the Stand Alone Plans or
the Mid-Atlantic Associates Plan. Each Spinco Union Pension Plan
shall be identical in all material respects to the corresponding Verizon Pension
Plan in which the applicable Represented Employees participated immediately
prior to the Distribution Date. Spinco shall provide Frontier with a
copy of those plans and such trust prior to their adoption in order to provide
Frontier an opportunity to comment on their form. Spinco agrees to
consult with Frontier and, subject to the obligations of the Parties under this
Agreement, to reasonably consider such comments, but Frontier’s comments shall
be advisory only and Spinco shall retain full discretion as to the form of the
plans and trusts.
As of and from the Distribution Date
and until the Effective Time, Spinco, and as of and from the Effective Time,
Frontier, shall be responsible for taking or causing to be taken all necessary,
reasonable, and appropriate action to establish, maintain and administer the
Spinco Union Pension Plans so that they qualify under Section 401(a) of the Code
and the related trust thereunder is exempt from Federal income taxation under
Section 501(a) of the Code. For the avoidance of doubt, prior to and
following the Effective Time, Verizon shall provide Frontier all reasonably
requested information, files, and documents necessary for Frontier to so
maintain and administer the Spinco Union Pension Plans.
(a) Assumption of Liabilities by
Spinco Pension Plans. Subject to the Pension Plan Asset
Allocation specified below, effective as of the Distribution Date, all
Liabilities under the Verizon Pension Plans relating to persons who are Spinco
Employees and to persons who are entitled to receive a benefit in respect of
such a Spinco Employee shall cease to be Liabilities of the Verizon Pension
Plans and shall be assumed in full and in all respects by the corresponding
Spinco Pension Plan. The “corresponding” plan shall
be: (i) the Spinco Management Pension Plan with respect to
participants in the VMPP; and (ii) the applicable Spinco Union Pension Plan
with respect to participants in the Stand-Alone Plans and the Mid-Atlantic
Associates Plan. Effective as of the Distribution Date, all
Liabilities under the Verizon Excess Plan relating to persons who are Spinco
Employees and to persons who are entitled to receive a benefit in respect of
such a Spinco Employee shall cease to be Liabilities of the Verizon Excess Plan
and shall be assumed in full and in all respects by the Spinco Excess Pension
Plan. Frontier shall be solely responsible for all ongoing rights of
or relating to Spinco Employees for future participation in the Spinco Pension
Plans.
(b) Calculation of Pension Plan
Asset Allocation. As soon as practicable after the
Distribution Date, Verizon’s actuary shall calculate and certify the Pension
Plan Asset Transfer Amount that is to be transferred to each Spinco Pension Plan
(other than the Spinco Excess Pension Plan) as of the Distribution
Date. With respect to each such asset transfer from each Verizon
Pension Plan, the Pension Plan Asset Transfer Amount shall be equal (subject to the subsequent provisions of
this Section 5.2(b)) to the amount determined in accordance with the
requirements of Section 414(l) of the Code and the regulations thereunder, based
on the present value of benefits in respect of Spinco Employees and persons
entitled to receive a benefit in respect of such Spinco Employees, calculated on
a plan termination basis, and, where applicable, giving effect to the allocation
of assets under Section 4044 of ERISA, but without regard to the de minimis rule
available under the regulations promulgated under Section 414(l). For
the avoidance of doubt, in no event shall any Verizon Pension Plan transfer to
any Spinco Pension Plan assets in excess of the amount required to be
transferred based on the present value of the accrued benefits of participants,
as determined in accordance with Section 414(l). In the event that
the aggregate of the Pension Plan Asset Transfer Amounts for all of the Verizon
Pension Plans that are qualified under Section 401(a) of the Code (the “Aggregate Assets”)
has a value which is less than the aggregate Projected Benefit Obligations
(“PBO”) for all
the Spinco participants under all such qualified Verizon Pension Plans (the
“Aggregate
PBO”), Verizon will be responsible for the differential between the
Aggregate PBO and the Aggregate Assets (the “Differential”) as
described in the next sentence. Verizon will pay the Differential to
either Frontier or an underfunded Spinco Pension Plan (or Plans) identified by
Frontier; provided, however, that if the Differential is paid directly to
Frontier, Frontier shall contribute the entire amount to one or more of the
underfunded Spinco Pension Plans as soon as practicable. The
assumptions to be used with respect to the determination of the amount of assets
to be transferred from any Verizon Pension Plan and in determining the PBO in
respect of any Pension Plan and the Aggregate PBO are set forth in Exhibit A
hereto entitled Actuarial Assumptions and Methods for Pension Asset
Transfer.
Within ten (10) days after the date
Verizon certifies to Frontier the Pension Plan Asset Transfer Amount to be
transferred to each Spinco Pension Plan, Verizon’s actuary shall provide
Frontier’s actuary with a complete computer file containing the employee data
and all other relevant information used by Verizon’s actuary or otherwise
reasonably requested by Frontier’s actuary as needed to calculate the Pension
Plan Asset Transfer Amount (including data and information related to such
calculation and otherwise appropriate for Frontier’s actuary to consider, and
any other data and information reasonably requested by Frontier’s
actuary). The Pension Plan Asset Transfer Amount shall become final
and binding upon the Parties at the close of business on the 30th day
following Frontier’s receipt of such computer file and any such additional data
used by Verizon’s actuary to make its determination and any additional
information reasonably requested by Frontier’s actuary, unless prior to such
30th
day Frontier delivers a written notice to Verizon stating that Frontier believes
that the calculation of the Pension Plan Asset Transfer Amount contains factual
or mathematical errors or otherwise fails to comport with the actuarial
assumptions expressly set forth in Exhibit A and states in reasonable detail the
basis for such belief. Should Frontier timely provide such notice,
the Parties shall use their reasonable best efforts to resolve promptly any
disagreements regarding such calculations. In the event that the
Parties cannot resolve such disagreements, the Parties shall jointly select an
independent third actuary with whom none of the Parties have a material
relationship, who shall render its determination promptly in accordance with the
requirements of this Section 5.2(b) and whose determination shall be binding on
the Parties. The third actuary shall be required to confirm the
determination of the Verizon actuary unless, and solely to the extent that, the
third actuary determines that such determination (i) contains factual or
mathematical errors or (ii) applying an abuse of discretion standard such that
the determination of the Verizon actuary shall be confirmed unless it has no
reasonable basis, otherwise fails to comport with the actuarial assumptions set
forth in Exhibit A. In no event (except for inaccuracy of the data
provided) shall the amount determined by the third actuary be more than the
amount claimed by Frontier or less than the amount shown in the calculations of
Verizon’s actuary. Each of the Parties shall bear the fees, costs and
expenses of their respective actuaries, and the fees, costs and expense of the
third actuary shall be borne one half by Verizon and one half by
Frontier. Any decision by the third actuary shall be treated as
Confidential Information by the parties, except as may be required to obtain
judgment on the award or enforce performance thereof or except as disclosure may
be required by law.
(c) Transfer of Assets to Spinco
Pension Trust
(i) As
soon as practicable and no more than ten (10) (or, with respect to any Verizon
Pension Plan in respect of which a Section 4044 allocation may be required,
sixty (60)) days after and effective as of the Distribution Date, Verizon shall
cause to be transferred from the master trust established under the Verizon
Pension Plans (the “Verizon Trust”) to a
master trust established in respect of the Spinco Pension Plans other than the
Spinco Excess Pension Plan (the “Spinco Trust”), an
initial amount of assets (the “Initial Asset
Transfer”). The amount of the
Initial Asset Transfer shall be equal to 80% of the amount the enrolled actuary
for such Verizon Plan determines in good faith to be the approximate Pension
Plan Asset Transfer Amount.
(ii) As
soon as practicable and no more than ten (10) days after the final calculation
of each Verizon Plan’s Pension Plan Asset Transfer Amount pursuant to Section
5.2(b), if such amount exceeds the Initial Asset Transfer plus the Benefit
Payments (as described below), Verizon will cause the applicable Verizon Trust
to transfer to the Spinco Trust (the “Final Asset
Transfer”) assets in an amount equal to the Pension Plan Asset Transfer
Amount with respect to each Verizon Pension Plan less the sum of (A) the
Initial Asset Transfer and (B) the aggregate amount of benefit payments
(the “Benefit
Payments”) made by the applicable Verizon Pension Plan in respect of
Spinco Employees from and after the Distribution Date. The amount
determined under the preceding sentence shall be increased or decreased, as the
case may be, by the investment return on the applicable amount determined in
accordance with the letter of direction agreed to by the Parties and attached
hereto as Schedule 5.2(c)(ii) (the “Letter of
Direction”). If the sum of the Initial Asset Transfer plus the
Benefit Payments exceeds the Pension Plan Asset Transfer Amount for a Spinco
Pension Plan, then the portion of the Spinco Trust relating to such plan shall
return such excess, increased or decreased by the investment return determined
in accordance with the Letter of Direction from the date of the Initial Asset
Transfer (or the date of the Benefit Payment, as the case may be) to the date of
return, to the portion of the Verizon Trust relating to the corresponding
Verizon Pension Plan.
(iii) The
applicable investment return under subsection (c)(ii) above and the
identification of the types of assets (cash and/or in kind assets) to be
transferred from the Verizon Trust to the Spinco Trust in either the Initial
Asset Transfer or the Final Asset Transfer shall be determined in accordance
with the Letter of Direction, as the same may be amended by mutual agreement of
Verizon and Frontier prior to the date of such Final Asset
Transfer. Verizon and Frontier shall cooperate in determining what
assets are transferred in kind (if any) as part of the Initial Asset Transfer
and the Final Asset Transfer and Verizon shall not
transfer any asset in kind which Frontier reasonably determines is not readily
tradable or capable of being valued on a substantial and established market
(except as otherwise agreed by the Parties).
(iv) For
the avoidance of doubt, the calculation and the potential payment of the
Differential shall not be taken into account in determining the Initial Asset
Transfer and the Final Asset Transfer. The Differential shall be
calculated as soon as administratively practicable and no later than twenty (20)
days following the determination of the Final Asset Transfer and shall be paid
no later than ten (10) days following such calculation.
(v) Unless
Verizon shall otherwise agree in writing, under no circumstances shall Verizon
or any Verizon Pension Plan be obligated, whether under this Agreement or
otherwise, to transfer any additional amounts to Frontier or any Spinco Pension
Plans or any other Person or Governmental Authority in respect of the
Liabilities transferred to the Spinco Pension Plans pursuant to Section 5.2(a),
including, but not limited to, any circumstance under which any Person or
Governmental Authority states a claim to any portion or all of any Pension Plan
Asset Transfer Amount.
(vi) Young Litigation
Exception. Verizon has disclosed to Frontier that it is party
to litigation pending in the District Court for the Northern District of
Illinois entitled, Young v. Verizon’s Xxxx Atlantic Cash Balance Pension Plan
(the “Young
Litigation”) that pertains to claims relating to the Xxxx Atlantic Cash
Balance Pension Plan, which has been merged into the VMPP. Verizon
represents that the plan administrator of the VMPP has determined that no
additional benefits are due and owing under the VMPP based on the claims
asserted in the Young Litigation and that such determination was made in
accordance with the VMPP’s claims procedure. Notwithstanding anything
else to the contrary in this Agreement, including, but not limited to, this
Section 5.2, Verizon shall retain any and all obligations for benefits that may
be determined to be due and owing to any Spinco Employees solely by reason of
the adjudication or settlement of the Young Litigation and any other Liabilities
directly related to the Young Litigation and no assets will be transferred to
any Spinco Plans with respect to any additional benefits determined to be
payable by reason of the adjudication or settlement of the Young Litigation, in
each case, unless otherwise required (i) pursuant to the adjudication or
settlement of the Young Litigation or other binding resolution of the claims
made thereunder or (ii) by the Internal Revenue Service or the Department of
Labor.
Between the Distribution Date and the
Effective Time, Spinco, and as of the Effective Time, Frontier shall cause the
Spinco Pension Plans and the Spinco Excess Pension Plan to recognize and
maintain all existing elections, including, but not limited to, beneficiary
designations, payment forms and other rights of alternate payees under qualified
domestic relation orders as were in effect under the corresponding Verizon
Pension Plan or Verizon Excess Plan, unless and until changed or modified in
accordance with the terms of the applicable plan or otherwise in accordance with
applicable law. To the extent applicable, the provisions of this
Article V shall also apply to Spinco Dependents. As soon as
administratively practicable, but in no event later than sixty (60) days,
following the Effective Time, Verizon or a member of the Verizon Group shall
provide to Frontier copies of all such beneficiary designations, payments forms,
and all other documents, files and other information that Frontier may need to
administer the Spinco Pension Plans and the Spinco Excess Pension Plan in
accordance with the terms of this Agreement. No later than thirty
(30) days prior to the Effective Time, Verizon shall provide Frontier with a
list of all qualified domestic relations orders as in effect as of a reasonably
practicable prior date, and within ten business (10) days after the Effective
Time, a final list of all qualified domestic relations orders in effects at the
Effective Time. From the Effective Time, Verizon shall cooperate with
Frontier to provide any reasonably requested information regarding such
administrative matters that has not yet been provided.
Section
5.4. Verizon Business
Plans. Notwithstanding anything else contained in this
Agreement to the contrary, Verizon or a member of the Verizon Group shall retain
all Liabilities in respect of or relating to any Former Verizon Business
Employees under any Verizon Business Plan.
HEALTH
AND WELFARE
(a) Verizon
or one or more of its Subsidiaries maintain health and welfare plans, including,
but not limited to, plans providing active severance and active post-retirement
health, dental and life insurance benefits, for the benefit of eligible Verizon
Employees and certain former employees, including Former Spinco Employees who
have retired as of the date the Merger Agreement is executed or will retire
prior to the Effective Time (the “Verizon Welfare
Plans”). As of the Distribution Date, each person who is a
Spinco Employee or Spinco Dependent on such date shall cease to be covered under
the Verizon Welfare Plans and, except as provided below, all Liabilities in
respect of or relating to such Spinco Employees or Spinco Dependents under the
Verizon Welfare Plans shall cease to be Liabilities of any member of the Verizon
Group or the Verizon Welfare Plans and any and all such Liabilities shall be
assumed by Spinco and the Spinco Welfare Plans. Notwithstanding the
foregoing, Verizon and the Verizon Welfare Plans shall be responsible for all
Liabilities relating to (i) Former Spinco Employees and (ii) Spinco Employees or
Spinco Dependents with respect to (A) medical, vision, or dental plan claims in
respect of services that were performed or goods provided prior to the Effective
Time, (B) life insurance claims in respect of deaths occurring on or prior to
the Effective Time, and (C) any payments due any Spinco Employees under the
terms of a Verizon short-term disability plan with respect to any period prior
to the Effective Time; provided, that, Frontier shall not be responsible for any
claims that were incurred prior to the Effective Time under any long term care
plans. For the avoidance of doubt, with respect to any payments due
to any Spinco Employee for short-term disability, the obligations to make
payments with respect to any period at or after the Effective Time shall be the
sole responsibility of Frontier or a Spinco Plan.
(b) Prior
to, and effective as of, the Distribution Date, Verizon and Spinco shall
establish welfare benefit plans for the benefit of Spinco Employees (the “Spinco Welfare
Plans”), based on the corresponding Verizon Welfare
Plans. Spinco or Verizon shall provide Frontier with a copy of the
Spinco Welfare Plans prior to their adoption in order to provide Frontier an
opportunity to comment on their form and for use in Frontier’s preparations for
assuming these plans. Spinco agrees to consult with Frontier and,
subject to the obligations of the Parties under this Agreement, to reasonably
consider such comments, but Frontier’s comments shall be advisory only and
Spinco shall retain full discretion as to the form of the plans. As
of and immediately after the Distribution Date, all Liabilities in respect of or
relating to such Spinco Employees under the Verizon Welfare Plans shall cease to
be Liabilities of any member of the Verizon Group or the Verizon Welfare Plans
and any and all such Liabilities shall be assumed as of the Distribution Date by
Spinco and the Spinco Welfare Plans, and as of the Effective Time, by Frontier,
Spinco and the Spinco Welfare Plans. Notwithstanding the foregoing,
all Liabilities associated with Former Spinco Employees under Verizon Welfare
Plans and such Liabilities that have been expressly retained by Verizon or the
Verizon Plans under Sections 2.1(b)(ii) and 6.1(a) above shall remain with the
Verizon Group.
(c) Except
for the FRP account balances described in Section 6.2(c), nothing in this
Agreement shall require Verizon, any Verizon Group member or any Verizon Welfare
Plan to transfer assets or reserves with respect to the Verizon Welfare Plans,
including, but not limited to, any plan providing severance, post-retirement
health, dental or life insurance benefits, to Frontier, any member of the
Frontier Group, or the Spinco Welfare Plans.
(a) As
of the Distribution Date, Spinco shall maintain or cause to be maintained for
the benefit of eligible Spinco Employees and, to the extent applicable, of
eligible Spinco Dependents of such employees, health and welfare plans,
including, but not limited to, plans providing active severance and active
post-retirement health, dental and life insurance benefits that provide benefits
that are identical in all material respects to the corresponding Verizon Welfare
Plans in which Spinco Employees and Spinco Dependents of such employees
participated immediately prior to the Distribution Date. Immediately
after the Effective Time, the terms of the Spinco Welfare Plans, as they relate
to Spinco Employees that are not Represented Employees, shall be governed by
Section 4.1(e) and Frontier shall have all rights described under the last
sentence of Section 3.2.
(b) Terms of Participation in
Spinco Welfare Plans. Spinco shall cause the Spinco Welfare
Plans to (i) waive all limitations as to preexisting conditions,
exclusions, service conditions and waiting period limitations, and any evidence
of insurability requirements applicable to any such Spinco Employees and Spinco
Dependents other than such limitations, exclusions, and conditions that were in
effect with respect to Spinco Employees and Spinco Dependents as of the
Distribution Date, in each case under the corresponding Verizon Welfare Plan and
(ii) honor any deductibles, out-of-pocket maximums and co-payments incurred
by Spinco Employees and Spinco Dependents under the corresponding Verizon
Welfare Plan in satisfying the applicable deductibles, out-of-pocket expenses or
co-payments under such Verizon Welfare Plan for the calendar year in which the
Effective Time occurs.
(c) Transfer of FRP Assets. Verizon
will make available to Frontier, not less than 30 business days prior to the
Effective Time, a list of individuals who will become or continue to be Spinco
Employees as of the Effective Time and who are participants in the FRP (the
“FRP
Participants”), together with the elections made prior to the Effective
Time with respect to such accounts through the Effective Time.
(i)
Frontier shall take all actions necessary and legally permissible to
ensure that as of the Effective Time, it includes the FRP Participants in the
Spinco Plan that constitutes a Code Section 125 plan and any flexible
spending arrangements thereunder (“Spinco
FSA”). Frontier shall further take all actions necessary and
legally permissible to amend Spinco’s FSA to provide that as of the Effective
Time and for the plan year in which the Effective Time occurs, but not for any
specific time thereafter, subject to any collective bargaining obligations,
(A) the FRP Participants shall become participants in Spinco’s FSA as of
the beginning of the FRP’s plan year and at the level of coverage provided under
the FRP, (B) the FRP Participants’ salary reduction elections shall be
taken into account for the remainder of Spinco’s FSA plan year as if made under
Frontier’s FSA; and (C) Frontier’s FSA shall reimburse medical expenses
incurred by the FRP Participants at any time during the FRP’s plan year
(including, but not limited to, claims incurred prior to the Effective Time but
unpaid prior to the Effective Time), up to the amount of the FRP Participants’
election and reduced by amounts previously reimbursed by the FRP.
(ii)
Verizon shall take
all actions necessary and legally permissible to amend the FRP to provide that
the FRP Participants shall cease to be eligible for reimbursements from the FRP
as of the Effective Time.
(iii) As
soon as practicable following the Effective Time, Verizon shall transfer to
Frontier, and Frontier agrees to accept, those amounts (plus all related
individual participant records and accountings) which represent the debit and
credit balances under the FRP of the FRP Participants and the transfer of such
amounts shall take into account on a net basis participants’ payroll deductions
and claims paid through the Effective Time. Verizon represents and
covenants that as of the Effective Time it has or shall have properly withheld
from the pay of FRP Participants all amounts in accordance with their FRP
elections.
As of the Effective Time, Frontier
shall be responsible for administering compliance with the continuation coverage
requirements for “group health plans” under Title X of the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended (“COBRA”), and the
portability requirements under the Health Insurance Portability and
Accountability Act of 1996 with respect to Spinco Employees and any Spinco
Dependents for the period after the Effective Time. Verizon will
retain any Verizon Liabilities under the Verizon Plans to provide COBRA coverage
to any Former Spinco Employee and any of his or her eligible dependents who
incurred a qualifying event under COBRA at or prior to the Effective Time and
who is still eligible to receive such continuing coverage as of or after the
Effective Time. For the avoidance of doubt, no provision of this
Agreement, the Distribution Agreement or the Merger Agreement and no actions
taken by any member of the Verizon Group, the Frontier Group or the Spinco Group
in connection with the Internal Restructuring, Distribution, or Merger shall
cause a termination of employment of any Spinco Employee or shall cause any
Spinco Employee to be entitled to COBRA coverage as of the Effective
Time.
Effective as of the Effective Time,
Frontier shall assume all Liabilities (other than any liabilities related to
medical or other similar services performed, as specified in Section 2.1(b)(ii),
or compensation in respect of lost work for periods prior to the Effective Time)
for Spinco Employees related to any and all workers’ compensation claims and
coverage, whether arising under any law of any state, territory, or possession
of the U.S. or the District of Columbia or otherwise, and Frontier shall be
fully responsible for the administration of all such claims; provided, however,
that to the extent that any Spinco Employee workers’ compensation claims related
to periods after the Effective Time are covered by workers compensation
insurance policies owned by a member of Verizon Group at the Effective Time, any
benefits payable under any such insurance policy in respect of any such Spinco
Employee shall reduce the obligations of Frontier and the members of the
Frontier Group to such Spinco Employee. No later than thirty (30)
days prior to the expected Effective Time (with updated information provided no
later than ten (10) days after the Effective Time), Verizon shall provide to
Frontier all information, data, records and documents that are related to any
such workers’ compensation claims and Liabilities or that are necessary for
Frontier to efficiently administer all such claims. As requested by
Frontier (before or after the Effective Time), Verizon shall also make available
to Frontier for reasonable consultation such Verizon personnel who may have
knowledge that could assist’s Frontier efficient administration of such claims
and Liabilities. If Frontier is unable to assume any such Liability
or the administration of any such claim because of the operation of applicable
state law or for any other reason, Verizon shall retain such Liabilities and
Frontier shall reimburse and otherwise fully indemnify Verizon for all such
Liabilities (subject to reduction for any amounts payable from insurance),
including, but not limited to, the costs of administering the plans, programs or
arrangements under which any such Liabilities have accrued or otherwise arisen,
provided, that Frontier shall
enter into reasonable arrangements acceptable to Verizon (such acceptance not to
be unreasonably withheld) to secure the payment of such
Liabilities. All reimbursement amounts shall be paid in
accordance with the procedure set forth in Section 11.2.
Frontier shall be responsible for the
administration and compliance of all leaves of absences and related programs
(including, but not limited to, compliance with the United Services Employment
and Reemployment Rights Act, the Family and Medical Leave Act or similar state
laws) affecting Spinco Employees for the period at and after the Effective
Time.
The Frontier Group shall credit each
Spinco Employee with the amount of accrued but unused vacation time, sick time
and other time-off benefits (together the “Time-Off Benefits”)
as such individual had with the Verizon Group or the Spinco Group as of the
Effective Time and shall provide such individuals with the same rights,
benefits, and entitlements in respect to such Time-Off Benefits as they were
entitled to from the Verizon Group or the Spinco Group as of the Effective
Time. Verizon shall provide Frontier with accurate data regarding
accrued but unused vacation time, sick time and other time-off benefits for all
Spinco Employees as of a current date not less than fifteen (15) days before the
date that Verizon reasonably estimates will be the Effective Time.
SAVINGS
PLANS
(a) Verizon
shall cause the appropriate member of the Spinco Group to establish three
defined contribution plans and trusts to be effective as of the Distribution
Date for the benefit of Spinco Employees who participate in a Verizon Savings
Plan immediately prior to the Distribution Date (the “Spinco Savings
Plans”). Two of the Spinco Savings Plans (the “Spinco Union Savings
Plans”) shall be identical in all material respects to the Verizon Union
Savings Plans, such that each Verizon Union Savings Plan shall have one and only
one corresponding Spinco Union Savings Plan. The third Spinco Savings
Plan (the “Spinco
Management Savings Plan”) shall be identical in all material respects to
a combined version of the Verizon Management Savings Plans (which themselves are
identical in all material respects). Verizon shall provide Frontier
with a copy of the Spinco Savings Plans prior to their adoption in order to
provide Frontier an opportunity to comment on their form. Verizon
agrees to consult with Frontier and, subject to the obligations of the Parties
under this Agreement, to reasonably consider such comments, but Frontier’s
comments shall be advisory only and Verizon shall retain full discretion as to
the form of the plans. As of and from the Distribution Date and until
the consummation of the Merger, Spinco and, as of and from the Effective Time,
Frontier shall be responsible for taking or causing to be taken all necessary,
reasonable and appropriate action to establish, maintain and administer the
Spinco Savings Plans so that they qualify under Section 401(a) of the Code and
the related trusts thereunder are exempted from Federal income taxation under
Section 501(a)(1) of the Code.
(a) Effective
as of the Distribution Date, but subject to the asset transfer specified in
Section 7.2(b) below, each Spinco Union Savings Plan shall assume and be
solely responsible for all Liabilities for or relating to Spinco Employees under
the applicable Verizon Union Savings Plan. Effective as of the
Distribution Date, but subject to the asset transfer specified in
Section 7.2(b) below, the Spinco Management Savings Plan shall assume and
be solely responsible for all Liabilities for or relating to Spinco Employees
under the Verizon Management Savings Plans. Frontier shall be solely
responsible for all ongoing rights of or relating to Spinco Employees for future
participation (including, but not limited to, the right to make contributions
through payroll deductions) in the Spinco Savings Plans.
(b) Effective
as of or as soon as administratively practicable after the Distribution Date,
Verizon shall cause the account balances (including, but not limited to, any
outstanding loan balances) in the applicable Verizon Savings Plan attributable
to Spinco Employees to be transferred to the corresponding Spinco Savings Plan
in cash and in-kind (including, but not limited to, participant loans), provided
that, with respect to any in-kind transfers other than participant loans,
Frontier shall receive sixty (60) days notice of such transfers and shall have
an opportunity to comment on them. Frontier’s comments shall be
advisory only and Verizon shall retain full discretion as to the type of
transfers to be made, but Verizon shall not transfer any asset in kind which
Frontier reasonably determines is not readily tradable or capable of being
valued on a substantial and established market (except with respect to any
participant loans or any other transfers otherwise agreed to by the
Parties). Subject to the immediately preceding sentence, if prior to
the Effective Time, Spinco, and if after the Effective Time, Frontier shall
cause each Spinco Savings Plan to accept such transfer of accounts and
underlying assets and, effective as of the date of such transfer, to assume and
to fully perform pay or discharge, all obligations of the Verizon Savings Plans
relating to the accounts of Spinco Employees (to the extent those assets related
to those accounts are actually transferred from a Verizon Savings
Plan). The transfers shall be conducted in accordance with Section
414(l) of the Code, Treasury Regulation Section 1.414(l)-1, and Section 208 of
ERISA.
EQUITY
BASED INCENTIVE AWARDS
Verizon shall retain all Liabilities in
respect of all stock based incentive compensation awards granted to Spinco
Employees and Former Spinco Employees that are outstanding as of the Effective
Time, whether or not such awards would be settled in stock or cash (the “Outstanding Awards”),
and Frontier shall assume no Liabilities with respect to such Outstanding
Awards. In addition, Verizon shall retain all other obligations
related to the Outstanding Awards, including, but not limited to, all
responsibility for the administration and settlement of such Outstanding
Awards.
Each Outstanding Award that is an
option in respect of Verizon Common Stock granted under a Verizon Plan that is
held by a Spinco Employee as of the Effective Time (each, an “Original Option”) shall remain
an option in respect of Verizon Common Stock subject to a Verizon Plan (each, a
“Remaining
Option”). Subject to any limitation required to comply with
the provisions of Section 409A of the Code, each Remaining Option held by any
person who is or becomes a Spinco Employee at the Effective Time shall remain
exercisable until the expiration of the stated term of the Original
Option. In the event that the fair market value of the Verizon Common
Stock decreases at the Effective Time, the exercise price and number of shares
subject to each Remaining Option shall be adjusted pursuant to the terms of the
applicable Verizon Plan but in a manner consistent with the requirements of
Section 424 of the Code. As a result, the Remaining Option shall be
adjusted in accordance with clauses (A) and (B) below (to be
interpreted and applied in such a way as to minimize any adverse consequences
from any possible application of FAS 123R and Section 409A of the Code to such
conversions):
(A) the
number of shares of Verizon Common Stock subject to such Remaining Option shall
be equal to the product of (x) the number of shares of Verizon Common Stock
subject to the corresponding Original Option immediately prior to the Effective
Time and (y) the Verizon Share Ratio, with fractional shares rounded down
to the nearest whole share; and
(B) the
per-share exercise price of such Remaining Option shall be equal to the quotient
of (x) the per-share exercise price of the corresponding Original Option
immediately prior to the Effective Time and (y) the Verizon Share Ratio,
rounded up to the nearest whole cent.
(a) Generally. Each
individual who holds an Outstanding Award that is a Restricted Stock Unit (each,
an “RSU”) or a
Performance Share Unit (each, a “PSU”) that relates to
Verizon Common Stock and that was granted under a Verizon Plan, shall continue
to hold such RSU or PSU after the Effective Time under such Verizon Plan,
provided that with respect to each such outstanding award, there shall be
credited by Verizon on behalf of each holder thereof a dividend equivalent
amount equal to the opening cash value on the day following the completion of
the Distribution, of the number of shares of Spinco Common Stock that would have
been distributed to such holders had each such RSU or PSU award been outstanding
shares of Verizon Common Stock. For the avoidance of doubt, Verizon
shall remain liable for all outstanding RSUs and PSUs, and Frontier shall have
no Liability with respect to any RSU or PSU.
(b) Performance Conditions/Board
Approval. Notwithstanding anything else contained herein to
the contrary, nothing in this Section 8 shall be construed or interpreted to
modify, waive, eliminate or otherwise alter any performance conditions required
to be satisfied for a Spinco Employee or employee of any member of the Verizon
Group to become vested in any Outstanding Award (including, but not limited to,
any PSU). Moreover, any requirement for approval by the Verizon Board
or a duly authorized committee thereof of the level of achievement against any
such performance restrictions applicable to such Outstanding Award shall
continue to apply on the same basis as they did prior to the Effective
Time.
(c) Vesting of PSUs and
RSUs. Any outstanding PSU or RSU awards granted by Verizon
that are held by a Spinco Employee at the Effective Time shall immediately vest
in full on the Distribution Date, subject, if applicable, to the achievement of
any applicable performance criteria and the approval thereof by the Verizon
Board or a duly authorized committee thereof. Each such award will be
paid by Verizon in the ordinary course during the first seventy-five (75) days
of the first quarter of the calendar year next following the applicable
performance period for which, and subject to the extent to which, it becomes
payable.
Any Outstanding Award that is a
chairman’s award will be treated in substantially the same manner and subject to
substantially the same conditions outlined above with respect to annual RSU
grants, that is, each such chairman’s award will be appropriately adjusted to
reflect the distribution of Spinco, will be deemed immediately vested on the
Distribution Date and will be paid by Verizon promptly on the regularly
scheduled payment date after the end of the applicable award cycle.
At the discretion of, and subject to
such terms and conditions as shall be established by the appropriate committee
of its Board of Directors, Verizon may provide that any stock option in respect
of Verizon Common Stock granted under a Verizon Plan that is (i) held as of
the Record Date by either a Spinco Employee or a Verizon Employee or a permitted
transferee of any such employee, and (ii) is exercised by such holder following
the Record Date and prior to or on the Distribution Date (each, a “Record Date
Option”), shall be adjusted pursuant to the
terms of the plan document governing such Record Date Option to entitle such
holder to participate in the Distribution and to receive, as of the Distribution
Date and in addition to the number of shares of Verizon Common Stock deliverable
upon the exercise of such Record Date Options, the number of shares of Spinco
Common Stock which such person would have received had such person been a
Verizon stockholder on the Record Date. If the appropriate committee
of the Verizon Board of Directors does not exercise its discretion to adjust any
stock options in respect of Verizon Common Stock in the manner permitted under
the immediately preceding sentence, the number of Record Date Options for
purposes of this Agreement and the Distribution Agreement shall be
zero.
Prior to the Effective Time, the
appropriate committee of the Board of Directors of Frontier shall take any and
all actions that it shall deem necessary or appropriate, in accordance with its
authority under each of the equity incentive plans of Frontier (the “Frontier Equity
Plans”) under which there shall be outstanding at the Effective Time any
stock options, stock appreciation rights, restricted stock or other forms of
compensatory equity-based compensation awards (the “Frontier Equity
Awards”), to prevent the accelerated vesting or exercisability of, or the
waiver of any service or other conditions associated with, such Frontier Equity
Awards solely in connection with the consummation of the transactions
contemplated in the Merger Agreement.
SHORT
TERM INCENTIVES AND SALES COMMISSION PROGRAMS
Verizon or a member of the Verizon
Group shall pay any amounts that are due and payable under the Sales Commission
Programs to Spinco Employees prior to the Effective Time. The
Frontier Group shall be responsible for all Liabilities under each Short Term
Incentive Plan and each Sales Commission Program for amounts that become due and
payable in accordance with the terms of such plans and programs on or after the
Effective Time. The Frontier Group shall maintain in effect the Short
Term Incentive Plans and each Sales Commission Program until the end of the
calendar year in which the Effective Time occurs; provided, however, Frontier
shall have the right to amend each such Short Term Incentive Plan and Sales
Commission Program as necessary to reflect the changes resulting from the
Merger, including, without limitation, changes to the performance metrics under
such plans and programs to use Frontier performance metrics similar to the
metrics used for other similarly situated Frontier employees.
DEFERRED
COMPENSATION PLANS
Verizon shall retain all Liabilities
for, and all responsibility related to the administration and distribution of,
any benefits accrued by Spinco Employees and Former Spinco Employees under the
EDP, ESP and IDP.
All unvested account balances under the
EDP and ESP shall vest at the Effective Time. Any Spinco Employee who
is a participant in the EDP, ESP or IDP, shall be paid out at such time and in
such manner as determined in accordance with the terms of the relevant
plan. Notwithstanding the foregoing, any and all distributions from
the EDP, ESP and IDP shall, to the extent applicable, be administered in a
manner consistent with the provisions of Section 409A of the Code and the
regulations promulgated thereunder.
ASSUMPTION
OF LIABILITIES
(a) By
Spinco. Except as otherwise expressly provided for in this
Agreement, not later than the Distribution Date, Spinco shall or shall cause a
member of the Spinco Group to assume, perform, and discharge all of the
following, regardless of when or where such Liabilities arose or arise or are
incurred:
(i)
all Liabilities to or relating to Spinco Employees and their
dependents and beneficiaries, to the extent relating to, arising out of or
resulting from employment with any member of the Verizon Group or the Spinco
Group on or prior to the Distribution Date, including, but not limited to, all
Liabilities governed by the ILEC CBAs or any Spinco Benefit Agreement identified
on Schedule 5.12(a)(ii) of the Spinco Disclosure Letter, but excluding all
Liabilities retained by Verizon as provided in this Agreement including, but not
limited to, the Liabilities retained by Verizon pursuant to Section 11.1(c)
below; and
(ii)
all other Liabilities relating to, or arising out
of, or resulting from obligations, liabilities, and responsibilities expressly
assumed or retained by Spinco or a member of the Spinco Group pursuant to this
Agreement or the ILEC CBAs.
(b) By
Frontier. At the Effective Time, Frontier shall or shall cause
a member of the Frontier Group or a Spinco Plan to assume, perform, and
discharge all Spinco Liabilities, regardless of when or where such Liabilities
arose or arise or are incurred. To the extent that any Frontier
Subsidiary is responsible for any of the Spinco Liabilities, each member of the
Frontier Group shall be jointly and severally liable for the payment of such
Liabilities by such Frontier Subsidiary.
(c) By
Verizon. Verizon shall or shall cause the applicable Verizon
Plan or Verizon Group member to retain and discharge all of the
following:
(i) all
Liabilities to or relating to Retained Employees and Former Spinco Employees,
and any individuals who are not Spinco Employees (and the foregoing’s dependents
and beneficiaries), to the extent relating to, arising out of or resulting from
former, present, or future employment with the Verizon Group, including, but not
limited to, all Liabilities governed by the collective bargaining agreements
that cover Retained Employees, Former Spinco Employees, and any individuals who
are not Spinco Employees (and the foregoing’s dependents and
beneficiaries);
(ii) all
Liabilities arising under the Verizon Business Plans;
(iii) all
Liabilities with respect to Outstanding Awards;
(iv) all
Liabilities under the EDP, ESP or IDP;
(v) all
Liabilities expressly assumed or retained under Sections 2.1(b)(ii), 5.2(c)(vi)
and 6.1(a);
(vi) all
Liabilities under the Sales Commission Programs for amounts that become due and
payable under the terms of such programs prior to the Effective Time;
and
(vii) all
other Liabilities relating to, or arising out of, or resulting from obligations,
liabilities, and responsibilities expressly assumed or retained by a member of
the Verizon Group or a Verizon Plan pursuant to this Agreement or the collective
bargaining agreements that cover Retained Employees, Former Spinco Employees,
and any individuals who are not Spinco Employees (and the foregoing’s dependents
and beneficiaries).
To the extent that any Verizon
Subsidiary is responsible for any of the Liabilities listed above or in Section
11.1(a), Verizon and each member of the Verizon Group shall be jointly and
severally liable for the payment of such Liabilities by such Verizon
Subsidiary.
(d) Allocation
of Liabilities among Verizon, Spinco and Frontier with respect to grievances and
demands for arbitration pending as of the Effective Time shall be as set forth
in Sections 11.1(a), (b) and (c). Verizon shall retain liability for
such claims relating solely to Verizon Employees or the Verizon Business and,
except as provided in Section 11.1(c), Frontier shall assume liability for such
claims relating solely to the Spinco Employees or the Spinco
Business.
(e) The
procedures for resolving and defending any grievances and demands for
arbitrations pending as of the Effective Time that relate to both Verizon
Employees and Spinco Employees or to both the Spinco Business and the Verizon
Business or to both Verizon and Frontier, shall be set forth in the Joint
Defense Agreement, as defined in the Merger Agreement.
(a) By
Frontier. From time to time after the Effective Time, Frontier
shall promptly reimburse Verizon, but in no event more than fifteen (15) business days after
delivery by Verizon of an invoice therefor containing reasonable substantiating
documentation of such costs and expenses, for the cost of any obligations or
Liabilities that Verizon or a Verizon Plan elects to, or is compelled to, pay or
otherwise satisfy, that are or that pursuant to this Agreement have become, the
responsibility of Frontier or any Frontier Subsidiary; provided, however, that if
payment in respect of any such Liability is made by a Verizon Plan, Frontier or
the appropriate Spinco Plan shall reimburse the Verizon Plan
directly.
(b) By
Verizon. From time to time after the Effective Time, Verizon
shall promptly reimburse Frontier, but in no event more than fifteen (15)
business days after delivery by Frontier of an invoice therefor containing
reasonable substantiating documentation of such costs and expenses, for the cost
of any obligations or Liabilities that Frontier or a Spinco Plan elects to, or
is compelled to, pay or otherwise satisfy, that are or that pursuant to this
Agreement have become, the responsibility of Verizon; provided, however, that if
payment in respect of any such Liability is made by a Spinco Plan, Verizon or
the appropriate Verizon Plan shall reimburse such Spinco Plan
directly.
(a) Frontier
and any member of the Frontier Group responsible for operating the Spinco
Business after the Effective Time, shall indemnify, defend and hold harmless the
Verizon Indemnitees from and against all Indemnifiable Losses arising out of or
due to (i) the failure
of any member of the Frontier Group to pay, perform, discharge or satisfy any
Liabilities assumed in Section 11.1(b) of this Agreement (other than any
Liabilities which arise due to the failure of Verizon to satisfy its obligations
under Article VIII hereof or to satisfy any Liability assumed in Section 11.1(a)
and (c) hereof), and (ii) any other breach of the duties or obligations of
any member of the Frontier Group, as set forth in this
Agreement. Frontier shall take commercially reasonable efforts to
procure insurance against any Indemnifiable Losses arising from the obligations
set forth in this Agreement.
(b) Verizon
shall indemnify, defend and hold harmless the Frontier Indemnitees from and
against all Indemnifiable Losses arising out of or due to (i) the matters
discussed in Section 5.2(c)(vi) hereof, (ii) the failure of any member of
the Verizon Group to pay, perform, discharge or satisfy any Verizon Liabilities
(other than Verizon Liabilities which arise due to the failure of any member of
the Frontier Group or any Spinco Plans to satisfy any liabilities assumed by
Frontier in Section 11.1(b) hereof) and (iii) any other breach of the
duties and obligations of any member of the Verizon Group, as set forth in this
Agreement. Verizon shall take commercially reasonable efforts to
procure insurance against any Indemnifiable Losses arising from the obligations
set forth in this Agreement.
Except as specifically set forth in
this Agreement, in the event that Verizon or any other Verizon Indemnitee shall
seek indemnification in respect of any Frontier Liabilities, or Frontier or any
Frontier Indemnitee shall seek indemnification in respect of any Verizon
Liabilities, such person shall comply with and follow the procedures regarding
indemnification set forth in Article X of the Merger Agreement, which shall
apply to claims for indemnification hereunder in the same manner as though such
claims were eligible for indemnification under the Merger Agreement, but
assuming that such claims were not subject to any limitation on the ability to
claim indemnification under such Merger Agreement.
(a) The
amount that any Indemnifying Party is or may be required to pay to any
Indemnitee pursuant to this Article XI shall be reduced (retroactively or
prospectively) by (i) any insurance proceeds or other amounts actually
recovered from third parties by or on behalf of such Indemnitee in respect of
the related Indemnifiable Losses arising from the obligations set forth in this
Agreement (net of all costs of recovery, including, but not limited to,
deductibles, co-payments or other payment obligations) and (ii) any tax
benefit actually realized by the Indemnitee in respect of the related
Indemnifiable Losses arising under the obligations set forth in this
Agreement. The existence of a claim by an Indemnitee for insurance or
against a third party in respect of any Indemnifiable Loss or the availability
of potential tax benefits shall not, however, delay or reduce any payment
pursuant to the indemnification provisions contained herein and otherwise
determined to be due and owing by an Indemnifying Party. The
Indemnifying Party shall make payment in full of such amount so determined to be
due and owing by it and, if, and to the extent that, there exists a claim
against any third party (other than an insurer) in respect of such Indemnifiable
Loss, the Indemnitee shall assign such claim against such third party to the
Indemnifying Party. Any tax benefit actually received by an
Indemnified Party shall be paid over to the Indemnifying Party to the extent
such tax benefit relates to an Indemnifiable Loss for which indemnification has
already been received. Notwithstanding any other provisions of this
Agreement, it is the intention of the Parties hereto that no insurer or any
other third party shall be (i) entitled to a
benefit it would not be entitled to receive in the absence of the foregoing
indemnification provisions or (ii) relieved of
the responsibility to pay any claims for which it is obligated. If an
Indemnitee shall have received the payment required by this Agreement from an
Indemnifying Party in respect of any Indemnifiable Losses and shall subsequently
actually receive insurance proceeds, tax benefits or other amounts in respect of
such Indemnifiable Losses, then such Indemnitee shall hold such insurance
proceeds in trust for the benefit of such Indemnifying Party and shall promptly
pay to such Indemnifying Party a sum equal to the amount of such insurance
proceeds, tax benefits or other amounts actually received, up to the aggregate
amount of any payments received from such Indemnifying Party pursuant to this
Agreement in respect of such Indemnifiable Losses.
(b) In
the event that any claim is made by, on behalf of or in respect to a Spinco
Employee against any member of the Frontier Group or the Spinco Group, or
in respect of any Spinco Plans for which insurance and/or insurance
reimbursement may be available under a Policy in accordance with the provisions
of Section 6.5 of the Distribution Agreement, then solely for purposes of
Section 6.5 of the Distribution Agreement, such claim shall be treated as a
Spinco Liability under the Distribution Agreement. The purpose of
this provision is to make available to Frontier the benefit of any Policy solely
to the extent that benefits under such Policy would be available to Frontier
were Liabilities addressed in this Agreement not excluded from the definition of
Spinco Liabilities under the Distribution Agreement, and this provision shall
not be construed to expand or otherwise alter the terms of such Section 6.5 of
the Distribution Agreement or the definition of Liabilities in this Agreement.
For purposes of this Section 11.5(b), the term “Policy” shall have the meaning
ascribed to it in the Distribution Agreement.
(a) If
the indemnification provided for in this Article XI is unavailable to, or
insufficient to hold harmless, any Indemnitee in respect of any Losses for which
indemnification is provided for herein, then the relevant Indemnifying Party
shall contribute to the Losses for which such indemnification is unavailable or
insufficient in such proportion as is appropriate to reflect the relative fault
of such Indemnifying Party and such Indemnitee in connection with the
circumstances which resulted in such Losses as well as any other relevant
equitable considerations.
(b) The
relative fault of Verizon and Frontier shall be determined by reference to,
among other things, the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent the applicable act, failure to
act, statement or omission that is the basis for the Liability (the “Liability Event”),
and whether the Liability event occurred because of one Party’s reasonable
reliance on the other.
(c) Verizon
and Frontier agree that it would not be just and equitable if contribution
pursuant to this Section 11.6 were determined by any method of allocation which
does not take account of the equitable considerations referred to in Section
11.6(b). The aggregate amount of losses, liabilities, claims, damages
and expenses incurred by an Indemnitee shall be deemed to include any legal or
other expenses reasonably incurred by such Indemnitee in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.
In no event shall an Indemnifying Party
be liable for any Indemnitee’s special, punitive, exemplary, incidental,
consequential or indirect damages, or lost profits, whether based on contract,
tort, strict liability, other law or otherwise.
Any Third Party Claim, including, but
not limited to, administrative proceedings, governmental investigations, and
lawsuits in which both a member of the Verizon Group and a member of the
Frontier Group are, or reasonably may be expected to be, named as parties, or
that otherwise implicates both a member of the Verizon Group and a member of the
Frontier Group to a material degree, shall be handled by the Parties in
accordance with the terms of the Joint Defense Agreement, as defined in the
Merger Agreement.
GENERAL
AND ADMINISTRATIVE
(a) General. Each
of the Parties hereto will use its commercially reasonable efforts to promptly
take, or cause to be taken, any and all actions and to do, or cause to be done,
any and all things necessary, proper and advisable under applicable laws and
regulations to consummate the transactions contemplated by this Agreement,
including without limitation, adopting plans or plan amendments. Each
of the Parties hereto shall cooperate fully on any issue relating to the
transactions contemplated by this Agreement for which the other Party seeks a
determination letter or any other filing, consent, or approval with respect to
governmental authorities regarding a benefit plan.
(b) Cooperation in Benefits,
Plan, and Other Employee Transition. Without limitation, the
Parties’ cooperation under this Agreement shall include Verizon (and its
employees and agents) acting to provide Frontier (and its employees and agents)
with all information that is reasonably requested by Frontier in connection with
meeting, and reasonably necessary for Frontier to comply with, its obligations
under this Agreement, including but not limited to, in connection with providing
compensation, benefits, hours and terms and conditions of employment of
Represented Employees that are governed by the ILEC CBAs, establishing and
administering Frontier’s ongoing benefit plans for Spinco Employees, and
assessing appropriate insurances for the period on and after the Effective
Time. The information to be provided to Frontier (and its employees
and agents) shall include, without limitation, names of employees anticipated to
be assigned to Spinco and their respective work status, demographics and data;
plan records; underwriting and risk assessment information; records relating to
worker’s compensation claims; records related to collective bargaining and the
processing of grievances (including, but not limited to all transcripts of
negotiations, written proposals and negotiation binders); access to any
information related to prior events and past practice that become relevant in
future arbitrations; and periodic updates on the foregoing; in each case, so
long as such information is reasonably necessary for Frontier to comply with its
obligations under this Agreement. Such information may be requested
by Frontier at any time following the date the Merger Agreement is executed and
extending following the Effective Time as long as Frontier reasonably has a need
for such information, and shall be provided by Verizon or a Verizon agent as
soon as reasonably practicable without incurring undue expense (with any
increased third party cost being borne by Frontier) and in a de-identified
format to the extent necessary to comply with privacy provisions of federal or
applicable state law. With respect to any proposed changes to the
Verizon Plans applicable to Spinco Employees following the date the Merger
Agreement is executed (such as benefit changes for 2010), Verizon shall provide
Frontier information regarding such proposed changes prior to implementation of
such changes for informational purposes only. After the date the Merger Agreement is
executed, Verizon shall provide or cause to be provided to Frontier, copies of
all summary plan descriptions, summaries of material modification, and
enrollment materials from Verizon or a third party on behalf of Verizon or a
Verizon Plan to employees who are likely to be Spinco Employees, at the same
time such communications are given to the employees. The
Parties’ cooperation under this Agreement shall also include, without
limitation, Frontier (and its employees and agents) acting to provide Verizon
(and its employees and agents) with all information that is reasonably requested
and necessary for Verizon to administer the EDP, ESP and IDP with respect to
Spinco Employees that are participants in such plans.
If any provision of this Agreement is
dependent on the consent of any third party (such as a vendor) and such consent
is withheld, the Parties shall use their reasonable best efforts to implement
the applicable provisions of this Agreement to the full extent
practicable. If any provision of this Agreement cannot be implemented
due to the failure of such third party to consent, the Parties shall negotiate
in good faith to implement the provision in a mutually satisfactory
manner. The phrase “reasonable best efforts” as used in this
Agreement shall not be construed to require the incurrence of any non-routine or
commercially unreasonable expense or liability or the waiver of any
right.
This Agreement shall survive the
Effective Time.
(a) Nothing
in this Agreement shall in any way limit the rights of Frontier under Section
7.24 of the Merger Agreement.
(b) Words
in the singular shall be held to include the plural and vice versa and words of
one gender shall be held to include the other genders as the context
requires. The terms “hereof,” “herein,” and “herewith” and words of
similar import shall, unless otherwise stated, be construed to refer to this
Agreement as a whole (including all Exhibits hereto) and not to any particular
provision of this Agreement. The word “including” and words of
similar import when used in this Agreement shall mean “including, without
limitation,” unless the context otherwise requires or unless otherwise
specified. The word “or” shall not be exclusive.
(a) Nothing
in this Agreement shall confer upon any person (nor any beneficiary thereof) any
rights under or with respect to any plan, program, agreement or arrangement
described in or contemplated by this Agreement and each person (and any
beneficiary thereof) shall be entitled to look only to the express terms of any
such plan, program, agreement or arrangement for his, her or its rights
thereunder. The purpose of this Agreement is to specify the
respective potential responsibilities and obligations of Verizon and Frontier
(and their respective affiliates) as between each other, but it does not affect,
impair, enhance, modify, construe or interpret the rights of any Verizon
Employee or Spinco Employee under or in respect of any such plan, program,
agreement or arrangement.
(b) Nothing
in this Agreement shall create any right of a Person to object or to refuse to
assent to the assumption of or succession to, by any member of the Spinco Group
or the Frontier Group, any benefit plan, collective bargaining agreement or
other agreement relating to conditions of employment, termination of employment,
severance or employee benefits, nor shall this Agreement be construed as
recognizing that any such rights exist.
(c) Nothing
in this Agreement shall amend or shall be construed to amend, or interpret the
terms of, any plan, program, agreement or arrangement described in or
contemplated by this Agreement (other than to change the sponsor of a plan in
accordance with the express terms hereof).
Any notice, demand, claim, or other
communication under this Agreement shall be in writing and shall be deemed given
to a Party when (a) delivered to
the appropriate address by hand or by nationally recognized overnight courier
services (costs prepaid); (b) sent by
facsimile with conformation or transmission; (c) received or
rejected by the addressee, if sent by certified mail, return receipt requested,
in each case to the following addresses and facsimile numbers and marked to the
attention of the person designated below (or to such other address, facsimile
number or person as a party may designate by notice to the other
Parties:
(a) If
to Spinco (prior to the Effective Time) or Verizon, to:
Verizon
Communications Inc.
000
Xxxxxxx Xxxxxx
Xxx Xxxx,
XX 00000
Facsimile:
Attn:
Xxxxxxxx Xxxxx
Senior Vice
President, Deputy General Counsel and
Corporate
Secretary
With
copies to:
Debevoise & Xxxxxxxx
LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxxxx X.
Xxxxx
Xxxxx X. Xxxxxxx
(b) If
to Frontier, to:
Frontier Communications
Corporation
0 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile: 000-000-0000
Attn: Xxxxxx X. Xxxxxxxx
Executive Vice President and Chief
Financial Officer
and
Frontier Communications
Corporation
0 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
Facsimile: 000-000-0000
Attn: Xxxxxx X.
Xxxxxxxx
Senior Vice President, General Counsel and Secretary
With
copies to (which shall not constitute notice):
Xxxxxxxxxx Xxxxxxxx LLP
Suite 900
000 00xx Xxxxxx,
XX
Xxxxxxxxxx,
XX 00000-0000
Attn: Xxxx X. Xxxxxx
and
Cravath, Swaine & Xxxxx
LLP
000 Xxxxxx Xxxxxx
Xxx Xxxx,
XX 00000
Facsimile: (000)
000-0000
Attn: Xxxxxx X. Xxxxxxxx,
III
Xxxxx X. Xxxxxxx
Section
12.7. Governing Law;
Jurisdiction. This Agreement and the legal relations
between the parties hereto shall be governed by and construed in accordance with
the laws of the State of New York, without regard to the conflict of laws rules
thereof to the extent such rules would require the application of the law of
another jurisdiction. Except as provided in Section 5.2(b) with
respect to any disagreement regarding the calculation of any Pension Plan Asset
Transfer Amount, the state or federal courts located within the City of New York
shall have exclusive jurisdiction over any and all disputes between the parties
hereto, whether in law or equity, arising out of or relating to this agreement
and the agreements, instruments and documents contemplated hereby and the
parties consent to and agree to submit to the exclusive jurisdiction of such
courts. Each of the Parties hereby waives and agrees not to assert in
any such dispute, to the fullest extent permitted by applicable law, any claim
that (i) such Party is not personally subject to the jurisdiction of such
courts, (ii) such party and such Party’s property is immune from any legal
process issued by such courts or (iii) any litigation or other proceeding
commenced in such courts is brought in an inconvenient forum.
EACH PARTY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER RELATED DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that, after the
Distribution, the parties shall be entitled to specific performance of the terms
hereof to the extent such terms impose obligations that are to be performed
after the Distribution, in addition to any other remedy at law or in
equity.
This Agreement may not be assigned by
either Party (except by operation of law) without the written consent of the
other, and shall bind and inure to the benefit of the Parties hereto and their
respective successors and permitted assignees. This Agreement may not
be amended or supplemented except by an agreement in writing signed by Verizon,
Spinco, and Frontier. This Agreement may be executed in counterparts,
each of which shall be deemed an original and all of which together shall
constitute one and the same instrument.
IN
WITNESS WHEREOF, each Party has caused its duly authorized officer to execute
this Agreement, as of the date first written above.
| Date: | May 13, 2009 | VERIZON COMMUNICATIONS INC. | ||
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/s/ Xxxx
X. Xxxxxxxxx
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Xxxx
X. Xxxxxxxxx
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Executive
Vice President Strategy,
Planning
and Development
|
| Date: | May 13, 2009 | NEW COMMUNICATIONS HOLDINGS INC. | ||
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/s/
Xxxxxxx X. Xxxxx
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Xxxxxxx
X. Xxxxx
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Vice
President
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| Date: | May 13, 2009 | FRONTIER COMMUNICATIONS CORPORATION | ||
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/s/
Xxxxxx X. Xxxxxxxx
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Xxxxxx
X. Xxxxxxxx
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Executive
Vice President and Chief Financial Officer
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EXHIBIT
A – ACTUARIAL
ASSUMPTIONS AND METHODS FOR PENSION ASSET TRANSFER
EXHIBIT
B – SALES COMMISSIONS PROGRAMS
EXHIBIT
C– SHORT TERM INCENTIVE PROGRAMS
EXHIBIT
2.1 – COLLECTIVE BARGAINING AGREEMENTS
SCHEDULE 4.1 (d) – MINIMUM SEVERANCE BENEFITS FOR
NON-UNION EMPLOYEES
SCHEDULE
4.1.(e) – PERFORMANCE AND BONUS OPPORTUNITIES
SCHEDULE
5.2(c)(ii) – LETTER OF DIRECTION
