SOEC - LOCAL BARGAINING

12/17/2007
The Union does not advise taking ANY A-Time, (unpaid time). The company does look at this when declaring a surplus!

FINAL BARGAINING REPORT (SUMMARY)
CWA- VERIZON NORTHEAST COMMON ISSUES
SEPTEMBER 2003

TERMS OF CONTRACT
The five-year contract is effective August 3, 2003 and expires August 2, 2008. Each year beginning in April and continuing for 30 days, the union and the company will meet to discuss wages, pensions and job security issues. These wage discussions will not decrease or diminish any wage or COLA increases. All contract terms and conditions are protected and cannot be modified unless agreed to by both parties.
The terms of the Job Security letter for current employees will remain in effect for five years.

MOVEMENT OF WORK
The company cannot transfer any more than 0.7% of existing jobs to other areas.

JOB SECURITY LETTER
The job security letter (JSL) continues for current employees.

ANNUAL DISCUSSIONS
The union and the company will meet each April during the terms of the contract and may discuss job security wan wage issues.

LUMP SUM PAYMENT
Upon ratification bargaining unit members will be paid a lump sum wage payment equal to 3% of current wages. The payment will be made in October.

GUARANTEED ANNUAL W/AGE INCREASE
In August of each year from 2004 through 2007, a 2% increase will be made to base wage.

COST-OF-LIVING ADJUSTMENT
A COLA, effective 2006 and 2007 will be made to base wage rates. The adjustments are as follows:

2006: The change in CPI-W during the period of May 2004 through May 2006, minus 4%, divided by two.

2007: The change in CPI-W during the period of May 2006 through May 2007, minus 2%, divided by two.

ANNUAL DISCUSSIONS
Beginning in Apri12004 and each April of the Contract, the Union and Company will meet to discuss wages and job security issues.

CORPORATE PROFIT-SHARING
The Corporate Profit-Sharing plan (CPS) is continued. There are new minimum distribution amounts prorating for partial years:
Payable in March 2004: $500.00 for Performance Year 2003 2005:' $ 550.00 for Performance Year 2004 2006: $ 600.00 for performance year 2005 2007: $ 650.00 for performance year 2006 2008: $ 700.00 for performance year 2007

PENSION AND LUMP SUM CASH OUT
PENSION BAND INCREASE
Between November 1, 2003 and August 2, 2008 pension bands will increase 11.46% on a compounded basis. Annual increases are as follows:
10/1/03- 12/31/03: 5% window (temporary) one time

11/1/04: 2% Permanent pension band increase 10/1/05: 3% Pension Increase

10/1/06: 3% pension increase

10/1/07: 3% Pension increase.

LUMP SUM CASH-OUT
Between October I, 2003 and December 31, 2003 there will be a special incentive window when pension bands will be increased 5%. At the end of the period, the %5 incentive will end. The lump sum cash-out will be available during the incentive period, and then for temporary period lump sums will not be available. Lump sum cash-outs will be available again on November I, 2004 and will remain in effect through the term of the contract. Other provisions include:
Retiring employee may elect to take the cash-out on the day after separation from the company.
The Lump Sum will be calculated according to one of three options, depending on which produces the largest amount: the GATT formula included in the Pension Plan on 8/2/03;
The PBGC formula included in the Pension Plan on 8/2/03; or any legally mandated interest rate and mortality table that might subsequently be enacted into the IRS Code for the purpose of determining pension lump sum amounts
A joint committee will be established to review and recommend alternative interest rate factor to be used in the event the 30-year Treasury Bond ceases to be published during the contract term.
New rules have been established that offer beneficiaries new options in the event an employee dies before making an election about the form of pension payment or if disability payments terminated during January 1, 2004 and November 30, 2004 period when the lump sums will not be available.

VOLUNTARY TERMINATION BONUS
During the terms of the contract, employees who leave voluntarily pursuant to any Income Protection Plan (IPP) or enhanced IPP offering are eligible for a lump sum payment of $ 10,000. This payment is in addition to any IPP amount for which the employee is eligible. In addition, medical coverage for these employees will be extended for six months of medical coverage if they are not otherwise eligible for coverage.

HEALTH PLAN CHANGES FOR ACTIVE EMPLOYEES
Health Care Premiums
There are NO employee health care premiums.

Working Spouse/Partner Surcharge
Contributions will be required for working spouses or partners who have access to coverage elsewhere and who decline that coverage.

The premium surcharge will be $ 40.00 per month effective January 2004

Working spouses/partners who earn $ 25,000 annually or less or whose health plan requires annual premium payments of $ 900.00 ($75.00.permonth) or more will!!Q1 be required to contribute.

The surcharge does not apply if both husband and wife or partners are Verizon employees unless

one spouse/partner is eligible for the management health plan.

Prescription Drug Plan

A new Medco pharmacy network will be introduced effective January 2004, which will offer deeper discounts than available under the current network. The network includes 56,000 pharmacies in Verizon east region. In addition the co-pay structure for both retail and mail order drugs has been redesigned to encourage use of generic drugs and mail order:

IN-NETWORK RETAIL PRESCRIPTION DRUGS (30 day supply)

Generic: 15% of Discounted Network Price (DNP) up to $ 25.00

Brand with no generic alternatives or prescription is written Dispense as Written (DA W): 20% of DNP up to up to $ 40.00 maximum

Brand with generic alternative and no DA W: 30% of DNP up to $ 50.00 maximum.

OUT OF NETWORK RETAIL PRESCRIPTION DRUGS (30 day supply)

$ 50.00 deductible

Generic: 15% of retail cost with maximum of $ 25.00

Brand with no generic alternative or with D A W : 20$ of retail cost up to $ 40.00 max. Brand with generic alternative and no DAW: 30% of retail cost up to $ 50.00 max.

MAIL ORDER PRESCRIPTION DRUG PLAN ( 90 day supply)

Generic: $ 8.00 or DNP

Brand with no generic alternative or with DAW: $ 12.00 or DNP Brand with a generic alternative and no DAW: $ 20.00 or DNP

Where it is administratively feasible and where it has not already been done, the Company, in consultation with the ACHC, may carve out prescription drugs from HMO coverage and offer this prescription drug plan instead for those lIMO enrollees.

A NEW PPO NETWORK FOR THE MEP
The traditional indemnity plan will be redesigned and updated by including a PPO provider network option. The union-management Advisory Committee on Health Care (ACHC) will review bids and jointly select a third party administrator for the new plan. In the event the administrator is changed, the new administrator will use R & C schedules utilized by the current plan administrator for Verizon.

If a PPO provider is not used, then the traditional indemnity plan will remain in place and deductibles and coinsurance provisions will apply. If a PPO provider is used, a new copay structure will be in effect:

PPO DOCTOR OFFICE VISITS

$ 10.00 per visit copay effective 1/1/04

$ 15.00 per visit copay effective 1/1/06

PPO HOSPITAL ADMISSION

All necessary hospital charges covered 100% effective 1/1/04

OTHER COVERED CHARGES

Physical therapy and other charges currently reimbursed at 80% will still be covered at that rate, but instead will be calculated on negotiated network fee rather than billed or reasonable and customary fees. This will lower the cost to employees.

There will be no billing for charges in excess of 20% of the network-negotiated fee

NEW PREVENTIVE CARE BENEFITS (PPO network only)

Effective 1/1/04 the MEP will cover preventive care benefits under the PPO provisions of the plan and according to a negotiated frequency schedule

Preventive Care benefits will be covered at 100%

The new benefits include annual physical exams for individuals over age 50, and one complete regimen of immunizations and flu vaccine annually for children and adults.

Mammograms, P AP smears, PSA tests, and other tests and screenings covered at 100% with the associated doctor office visit subject to copays listed above.

OMER MEP TRADITIONAL INDEMNITY PLAN MODIFICATIONS

The MEP indemnity plan deductible and out of pocket maximum will be increased over the term of the contract if the employee lives within the MEP indemnity PPO service area.

The deductible will rise from $ 150.00 currently to $ 200.00 on 1/1/06 and to $ 250.00 on 1/1/08

Family deductible will equal 2.5 times the individual deductible instead of3 times

Out of pocket maximum will increase from $ 600.00 to $ 650.00 effective 1/1/06 and $ 700.00 effective 1/1/08

The current $200.00 out of pocket max for prescription drugs will rise to $ 250.00 effective 1/1/06

and $ 300.00 effective 1/1/08.

If an employee or retiree enrolled in MEP lives outside the MEP INDEMNITY PPO service area, and the employee or retiree is not eligible for coverage under the HCN managed care network plan, then increases in deductibles and out of pocket max. will not apply. Because the PPO network does not affect the prescription drug benefit, the prescription drug out of pocket max. will continue to apply.

CHANGES TO THE MANAGED HEAL 1H CARE NETWORK (HCN)
Office visits copay in the HCN increased from $ 5.00 to $ 10.00 effective 1/1/04 and to $ 15.00 in 1/1/05

The new preventive car schedule of benefits described above under the MEP will also be covered by HCN

HMO COVERAGE
Minimum benefit levels for HMO's have been set in the contract:

No office visit copay to exceed $ 10.00 during the term of the contract

No emergency room copay to exceed $ 50.00 during the term of the contract.

No participants will be required to pay any premiums during the term of the contract

The company will retain the right to determine which HMOs are offered and what benefits are offered.

Effective 1/1/04 a supplemental behavioral health benefit will be available to individuals in HMOs. If coverage for mental health or substance abuse treatments is exhausted, coverage will be available under this supplemental program on a 50%-50% basis.

OTHER HEALTH BENEFITS IMPROVEMENTS

Effective 1/1/04

Nutritional counseling will be added to obesity treatment up to $ 500.00 Hearing Aid reimbursement of $1000.00 per 24 month period

Infertility treatment will be covered up to a lifetime max. of $ 20,000

No referral will be required for a network participating oral surgeon.

DENTAL PLAN IMPROVEMENTS

Effective 1/1/04 dental implants will be covered up to $ 1000.00 per implant and up to $ 1500.00 per year. Dental plan will reimburse for services associated with finishing crowns

HEALTH PLAN CHANGES FOR RETIREES RETIREE HEALTH CARE CONTRIBUTION
The company will pay 100% of the cost of coverage for retirees through 2008.

RETIREE HEALTH BENEFITS
Retirees as subject to the same benefit provisions as negotiated for active employees except for:

For current retirees enrolled in the MEP the annual deductible will be recalculated to assure compliance with the current provision ( 1% of the pension up to $ 150.00) The deductible will remain throughout retirement. For future retirees the MEP deductible will be the one in effect at the time of retirement.

For retirees over age 65, the copays for doctor office visits, etc. under the new MEP-PPO and the HCN will remain at $ 5.00 throughout the term of the contract.

Retirees are not subject to the working spouse/partner surcharge.

HCN COVERAGE FOR RETIREES
The company will meet with the union in 2004 to discuss the feasibility of opening up eligibility for HCN benefits to Medicare-eligible retirees beginning in 2005.

COMMUTER ADVANTAGE PROGRAM
The pre-tax Public Transportation and Commuting Program is replaced with the Commuter Advantage Program (CAP). Employees may set aside pre-tax dollars into CAP accounts to pay for eligible commuting expenses. Two accounts are available: a Transportation Reimbursement Account and a Parking Reimbursement Account. Deductions are permitted to the extent allowed by the IRS.

JOINT MEDIATION SESSIONS
The company and union agree to meet in joint mediation sessions to improve the union management relationship and to develop a collaborate, problem solving partnership.

NEW JOINT COMMI1TEE ON ABSENCE CONTROL
Union and management committees, one for New York and one for New England will meet to look at causes of absence levels, review data, and discuss plan for absence reduction.

SAFETY-ACCIDENT NOTIFICATION
The tentative agreement establishes a new process for notifying the union in the event of a serious accident or serious injury.

ERGONOMICS
Representatives from the company and the union will meet to discuss the development and implementation of the inside and outside Ergonomics Program and other issues related.

THIRD MEDICAL OPINION FOR DISABILITY PLAN -
During a six-month trial period, a new medical vendor will be selected jointly. The vendor will be responsible for selecting the third doctor in disability cases where a third opinion is required.

LIMITED EXTENSION AGREEMENT
Upon ratification of the contract, the grievance and arbitration provisions of the contract will be retroactively applied. In addition, the Union Security provisions of the contract will apply during the period from the expirations of the 2000 contract until the new contract goes into effect. Finally, the Union and Company agreed that until ratification or a voting rejecting the tentative agreement, there would be no strikes or lockouts. Upon ratification the terms of the new agreement will apply.