Proxy Statement
Compensation Tables

Summary Compensation Table

Name and
Principal Position
(a)

Year
(b)

Salary
($)
(c)

Bonus
($)
(d)

Stock
Awards1
($)
(e)

Option
Awards
($)
(f)

Non-Equity
Incentive Plan
Compensation2
($)
(g)

Change in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings3
($)
(h)

All Other
Compensation4
($)
(i)

Total
($)
(j)

Lowell C. McAdam*

2011

1,400,000

0

18,750,099

0

2,362,500

127,181

480,719

23,120,499

Chairman & CEO

2010

913,462

0

4,307,642

0

1,736,538

28,410

209,848

7,195,900

 

2009

825,000

0

8,156,404

0

696,094

310,755

284,534

10,272,787

Daniel S. Mead

2011

725,000

0

3,806,258

0

734,063

175,217

220,103

5,660,641

Executive Vice President &

2010

598,077

0

2,565,964

0

815,625

68,475

133,690

4,181,831

President & CEO

                 

Verizon Wireless Joint Venture

                 

Virginia Ruesterholz

2011

700,000

0

3,675,035

0

708,750

174,941

142,625

5,401,351

Executive Vice President

2010

700,000

0

3,123,791

0

787,500

93,220

118,934

4,823,445

Francis J. Shammo

2011

675,000

0

3,543,775

0

683,438

4,499

144,351

5,051,063

Executive Vice President & CFO

2010

611,538

0

2,677,535

0

759,375

5,024

106,416

4,159,888

Randal S. Milch

2011

621,154

0

3,125,042

0

632,813

61,182

126,026

4,566,217

Executive Vice President &

                 

General Counsel

                 

Ivan G. Seidenberg*

2011

2,100,000

0

19,548,757

0

3,543,750

341,654

920,946

26,455,107

Former Chairman & CEO

2010

2,100,000

0

24,937,737

0

3,937,500

264,610

707,644

31,947,491

 

2009

2,100,000

0

17,962,893

0

2,953,125

521,924

880,282

24,418,224

*

Mr. McAdam became CEO on August 1, 2011, when Mr. Seidenberg stepped down from that position. Mr. Seidenberg resigned from his position as Chairman effective at the close of business on December 31, 2011 and Mr. McAdam assumed that position at that time. Mr. Seidenberg retired from the Company on December 31, 2011.

1

The amounts in this column reflect the grant date fair value of the PSUs and RSUs computed in accordance with FASB ASC Topic 718 based on the closing price of Verizon’s common stock on the grant date. The grant date fair value of PSUs granted to the named executive officers in the designated year as part of Verizon’s annual long term incentive award program and, in the case of Mr. McAdam, the special PSU award granted in 2011 in connection with his appointment to CEO and the special PSU award granted in 2009 in connection with the Company’s succession plan, has been determined based on the vesting of 100% of the nominal PSUs awarded, which is the performance threshold the Company believed was most likely to be achieved under the grants on the grant date. The following table reflects the grant date fair value of these PSUs, as well as the maximum grant date fair value of these awards based on the closing price of Verizon’s common stock on the grant date if, due to the Company’s performance during the applicable performance cycle, the PSUs vested at their maximum level:

 

Grant Date Fair Value of PSUs

Maximum Value of PSUs

Name

2009
($)

2009
Special
Award
($)

2010
($)

2011
($)

2011
Special
Award
($)

2009
($)

2009
Special
Award
($)

2010
($)

2011
($)

2011
Special
Award
($)

Mr. McAdam

2,193,905

4,500,000

2,584,573

5,250,034

7,000,031

4,387,810

9,000,000

5,169,146

10,500,068

14,000,062

Mr. Mead

NA

NA

1,539,578

2,283,755

NA

NA

NA

3,079,156

4,567,510

NA

Ms. Ruesterholz

NA

NA

1,874,263

2,205,028

NA

NA

NA

3,748,526

4,410,056

NA

Mr. Shammo

NA

NA

1,606,515

2,126,265

NA

NA

NA

3,213,030

4,252,530

NA

Mr. Milch

NA

NA

NA

1,875,025

NA

NA

NA

NA

3,750,050

NA

Mr. Seidenberg

11,079,000

NA

11,156,252

7,875,033

NA

22,158,000

NA

22,312,504

15,750,066

NA

 

The amounts in the Stock Awards column for Mr. Seidenberg also include $6,423,690 for 2011, $13,781,485 for 2010 and $6,883,893 for 2009, respectively, representing the value of the portions of Mr. Seidenberg’s 2009-2011, 2008-2010 and 2007-2009 PSU awards that were earned by Mr. Seidenberg as a result of his achievement of strategic initiatives. The amount for the 2009-2011 PSU award is also reported in the Grants of Plan-Based Awards Table and the Option Exercises and Stock Vested Table and related narrative and is described in the Compensation Discussion and Analysis section of this proxy statement. The amounts for the 2008-2010 and 2007-2009 PSU awards were previously reported in the Option Exercises and Stock Vested Tables and related narratives and described in the Compensation Discussion and Analysis sections of the 2011 Definitive Proxy Statement and the 2010 Definitive Proxy Statement, respectively.

2

The amounts in this column for 2011 reflect the 2011 Short-Term Plan award paid to the named executive officers in February 2012 as described on pages 34-36.

3

The amounts in this column for 2011 reflect the sum of the change in the actuarial present value of the accumulated benefit under the defined benefit plans and the above-market earnings on amounts held in nonqualified deferred compensation plans as follows: $97,513 and $29,668 for Mr. McAdam; $109,342 and $65,875 for Mr. Mead; $138,191 and $36,750 for Ms. Ruesterholz; $31,647 and $29,535 for Mr. Milch; and $35,997 and $305,657 for Mr. Seidenberg. Mr. Shammo is not eligible for pension benefits. Accordingly, the amounts shown in this column for 2011 for Mr. Shammo reflect above market earnings only. Verizon’s defined benefit plans were frozen as of June 30, 2006, and Verizon stopped all future benefit accruals under these plans as of that date. All accruals under the Verizon Wireless pension plan were frozen as of December 31, 2006.

4

The following table provides the detail for 2011 compensation reported in the “All Other Compensation” column:

Name

Personal
Use of
Company
Aircrafta
($)

Personal
Use of
Company
Vehicleb
($)

Company
Contributions
to the
Qualified
Savings Plan
($)

Company
Contributions
to the
Nonqualified
Deferral Plan
($)

Company
Contributions
to the Life
Insurance
Benefitc
($)

Otherd
($)

All Other
Compensation
Total
($)

Mr. McAdam

110,204

1,937

18,987

215,580

134,011

0

480,719

Mr. Mead

0

0

14,700

117,307

70,801

17,295

220,103

Ms. Ruesterholz

0

0

18,987

96,294

27,344

0

142,625

Mr. Shammo

0

0

18,988

91,066

24,297

10,000

144,351

Mr. Milch

0

0

18,987

78,362

18,677

10,000

126,026

Mr. Seidenberg

216,660

10,894

18,988

448,918

206,672

18,814

920,946

a)

The aggregate incremental cost of the personal use of a Company aircraft is determined by multiplying the total 2011 personal flight hours by the incremental aircraft cost per hour. The incremental aircraft cost per hour is derived by adding the annual aircraft maintenance costs, fuel costs, aircraft trip expenses and crew trip expenses, and then dividing by the total annual flight hours.

b)

The aggregate incremental cost of the personal use of a Company vehicle is determined by (i) calculating the incremental vehicle cost per mile by dividing the annual lease and fuel costs by the total annual miles; (ii) multiplying the total 2011 personal miles by the incremental vehicle cost per mile; and (iii) adding the incremental driver cost (the 2011 driver hours for personal use multiplied by the driver’s hourly rate).

c)

Executive life insurance is available to executives on a voluntary basis. Executives who choose to participate in this program are excluded from the basic and supplemental life insurance programs that Verizon provides to management employees. The executive owns the insurance policy and is responsible for paying the premiums. However, Verizon pays each executive an amount, which is shown in this column, that is equal to a portion of the premium. Executives who choose not to participate in the executive life insurance plan do not receive that payment. For Messrs. McAdam, Mead, Shammo and Milch the executive life insurance policy provides a death benefit equal to two times the sum of the executive’s base salary plus his short-term incentive opportunity at the threshold level if the executive dies before a designated date. For Messrs. McAdam, Mead and Shammo, this date is the latest of the participant’s retirement date, the date on which the participant reaches age 60 or the fifth anniversary of plan participation. For Mr. Milch, this date is the earlier of five years post-retirement or the date on which he reaches age 65. For Mr. Seidenberg and Ms. Ruesterholz the executive life insurance policy provides for a death benefit equal to approximately $10 million and $4.0 million, respectively, subject to 5% annual benefit increases if the executive is both active and age 60 or younger as a result of the preservation of benefits under a predecessor company’s plan.

d)

This column represents the total amount of other perquisites and personal benefits provided, none of which individually exceeded the greater of $25,000 or 10% of the total amount of all perquisites. These other benefits consist of: (i) for Messrs. Shammo and Milch financial planning services; (ii) for Mr. Mead financial planning services and personal travel; and (iii) for Mr. Seidenberg, financial planning services in 2011 and amounts he became entitled to receive upon his retirement for financial planning services. The Company provides each of the named executive officers who elect to participate in the program with a financial planning benefit equal to the Company’s payment for the services, up to $10,000. The aggregate incremental cost of personal travel for Mr. Mead is equal to the direct expense related to Mr. Mead’s spouse’s attendance at a business event at the request of the Company. These expenses include lodging, ground transportation, meals and other travel-related items.

Plan-Based Awards

The following table provides information about the 2011 awards granted under the Short-Term Plan and the Long-Term Plan to each named executive officer.

Grants of Plan-Based Awards

Name
(a)

Type
of
Award1

Grant
Date
(b)




Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards2

 




Estimated Future Payouts
Under Equity Incentive
Plan Awards3

All Other
Stock
Awards:
Number
of Shares
of Stock
or Units4
(#)
(i)

All Other
Option
Awards:
Number of
Securities
Underlying
Options
(#)
(j)

Exercise
or Base
Price of
Option
Awards
($/Sh)
(k)

Grant Date
Fair Value
of Stock
and Option
Awards5
($)
(l)

Threshold
($)
(c)

Target
($)
(d)

Maximum
($)
(e)

 

Threshold
(#)
(f)

Target
(#)
(g)

Maximum
(#)
(h)

Mr. McAdam

STIP

1,750,000

2,625,000

3,500,000

 

 

 

 

 

 

 

 

 

PSU

2/3/2011

 

 

 

 

72,156

144,311

288,622

 

 

 

5,250,034

 

PSU

8/1/2011

 

 

 

 

97,575

195,150

390,300

 

 

 

7,000,031

 

RSU

2/3/2011

 

 

 

 

 

 

 

96,207

 

 

3,500,011

 

RSU

8/1/2011

 

 

 

 

 

 

 

83,636

 

 

3,000,023

Mr. Mead

STIP

543,750

815,625

1,087,500

 

 

 

 

 

 

 

 

 

PSU

2/3/2011

 

 

 

 

31,388

62,775

125,550

 

 

 

2,283,755

 

RSU

2/3/2011

 

 

 

 

 

 

 

41,850

 

 

1,522,503

Ms. Ruesterholz

STIP

525,000

787,500

1,050,000

 

 

 

 

 

 

 

 

 

PSU

2/3/2011

 

 

 

 

30,306

60,611

121,222

 

 

 

2,205,028

 

RSU

2/3/2011

 

 

 

 

 

 

 

40,407

 

 

1,470,007

Mr. Shammo

STIP

506,250

759,375

1,012,500

 

 

 

 

 

 

 

 

 

PSU

2/3/2011

 

 

 

 

29,223

58,446

116,892

 

 

 

2,126,265

 

RSU

2/3/2011

 

 

 

 

 

 

 

38,964

 

 

1,417,510

Mr. Milch

STIP

468,750

703,125

937,500

 

 

 

 

 

 

 

 

 

PSU

2/3/2011

 

 

 

 

25,770

51,540

103,080

 

 

 

1,875,025

 

RSU

2/3/2011

 

 

 

 

 

 

 

34,360

 

 

1,250,017

Mr. Seidenberg

STIP

2,625,000

3,937,500

5,250,000

 

 

 

 

 

 

 

 

 

PSU

2/3/2011

 

 

 

 

108,233

216,466

432,932

 

 

 

7,875,033

 

PSU

12/31/2011

 

 

 

 

 

160,112

 

 

 

 

6,423,6906

 

RSU

2/3/2011

 

 

 

 

 

 

 

144,311

 

 

5,250,034

1

These awards are described in the Compensation Discussion and Analysis on pages 34-40.

2

The actual amount awarded in 2011 was paid in February 2012 and is shown in column (g) of the Summary Compensation Table on page 44.

3

These columns reflect the potential payout range of PSU awards granted in 2011. The February 3, 2011 grants are the grants made in accordance with the Company’s annual compensation process, as described on pages 37-38. The August 1, 2011 grant to Mr. McAdam is the grant associated with his appointment to CEO, as described on page 40. With respect to the February 3, 2011 PSU grants, at the conclusion of the three-year performance cycle, payouts can range from 0% to 200% of the target number of units awarded based on Verizon’s relative TSR position as compared with the Related Dow Peers, as described in more detail on page 38. PSUs and the applicable dividend equivalents are paid only if Verizon’s relative TSR meets or exceeds threshold performance objectives. When dividends are distributed to shareholders, dividend equivalents are credited on the PSU awards in an amount equal to the dollar amount of dividends on the total number of PSUs credited as of the dividend distribution date and divided by the fair market value of the Company’s common stock on that date. With respect to the August 1, 2011 PSU grant to Mr. McAdam, the number of PSUs that vest at the end of the five-year performance cycle will be determined based on Verizon’s average annual ROE during the performance cycle, and the final award will include dividend equivalents that accrue on the vested portion of the award. No PSUs will vest unless Verizon’s average annual ROE meets the minimum threshold of 10%. If Verizon’s average annual ROE meets the target percentage of 15%, 100% of the nominal number of the PSUs granted will vest. A maximum of two times the nominal number of PSUs granted will vest if Verizon’s average annual ROE is at least 20% at the conclusion of the performance cycle. If Verizon’s average annual ROE during the five-year performance cycle is greater than 10% but less than 15%, or is greater than 15% but less than 20%, the Committee will determine the extent to which the PSUs will vest, provided that the vested percentage must be between 50% and 100% and between 100% and 200%, respectively.

4

This column reflects the RSU awards granted in 2011 to the named executive officers. When dividends are distributed to shareholders, dividend equivalents are credited on the RSU awards in an amount equal to the dollar amount of dividends on the total number of RSUs credited as of the dividend distribution date and divided by the fair market value of the Company’s common stock.

5

This column reflects the grant date fair value of each equity award computed in accordance with FASB ASC Topic 718 based on the closing price of Verizon’s common stock on the grant date. For PSUs, the grant date fair value has been determined based on the vesting of 100% of the nominal PSUs awarded, which is the performance threshold the Company believes is the most likely to be achieved under the grants.

6

This reflects the portion of Mr. Seidenberg’s 2009-2011 PSU award that he earned as a result of his achievement of strategic initiatives during the three-year performance period ending on December 31, 2011 in accordance with the terms of his 2009-2011 PSU award that was approved in early 2009, as described on pages 39-40. This amount was paid in February 2012. This amount was also included in the amount reported for Mr. Seidenberg for 2011 in column (e) of the Summary Compensation Table on page 44.

Outstanding Equity Awards at Fiscal Year-End

Option Awards

Stock Awards

Name
(a)

Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
(b)

Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
(c)

Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options
(#)
(d)

Option
Exercise
Price
($)
(e)

Option
Expiration
Date
(f)

Number of
Shares or
Units of
Stock
That Have
Not
Vested1
(#)
(g)

Market
Value of
Shares or
Units of
Stock
That Have
Not
Vested2
($)
(h)

Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested3
(#)
(i)

Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or Other
Rights That
Have Not
Vested4
($)
(j)

       Grant
       Date

Mr. McAdam5

420,863

0

0

13.89

3/31/2014

0

0

246,580

9,892,790

12/18/2009

 

 

 

 

 

 

68,539

2,749,785

205,614

8,249,234

2/4/2010

 

 

 

 

 

 

100,134

4,017,376

300,404

12,052,208

2/3/2011

 

 

 

 

 

 

84,783

3,401,494

395,651

15,873,518

8/1/2011

Mr. Mead

0

0

0

0

0

42,277

1,696,153

126,831

5,088,460

2/4/2010

 

 

 

 

 

 

43,558

1,747,547

130,675

5,242,681

2/3/2011

Ms. Ruesterholz

52,420

0

0

45.23

1/23/2012

51,468

2,064,896

154,402

6,194,608

2/4/2010

 

30,472

0

0

35.81

2/2/2013

42,057

1,687,327

126,171

5,061,981

2/3/2011

Mr. Shammo

0

0

0

0

0

44,115

1,769,894

132,345

5,309,681

2/4/2010

 

 

 

 

 

 

40,555

1,627,067

121,664

4,881,160

2/3/2011

Mr. Milch

62,431

0

0

45.23

1/23/2012

40,264

1,615,392

120,791

4,846,135

2/4/2010

 

 

 

 

 

 

35,763

1,434,812

107,288

4,304,395

2/3/2011

Mr. Seidenberg

810,421

0

0

45.23

1/23/2012

0

0

919,054

36,872,446

2/4/2010

 

529,804

0

0

35.81

2/2/2013

150,202

6,026,104

450,606

18,078,313

2/3/2011

 

504,077

0

0

34.15

2/3/2014

 

 

 

 

 

1

The annual 2010 and 2011 RSU awards vest on December 31, 2012 and December 31, 2013, respectively. Mr. McAdam’s 2011 special RSU award vests on July 31, 2016. RSUs accrue quarterly dividends that are reinvested into the participant’s account as additional RSUs and will be included in the final RSU payment if the awards vest. This column includes dividend equivalent units that have accrued through December 31, 2011.

2

This column represents the value of the RSU awards listed in column (g) based on a share price of $40.12, the closing price of Verizon’s common stock on December 30, 2011.

3

The 2010 and 2011 PSU awards vest on December 31, 2012 and December 31, 2013, respectively. Mr. McAdam’s 2009 Special PSU award vests on December 31, 2012, and his 2011 Special PSU award vests on July 31, 2016. PSUs accrue quarterly dividends that are reinvested into the participant’s account as additional PSUs. PSUs and the applicable dividend equivalents are paid to the extent that Verizon’s performance meets or exceeds the applicable threshold performance objectives. As required by SEC rules, the number of units in this column represents the 2010 PSU awards at maximum value, the 2011 PSU awards at maximum value, Mr. McAdam’s 2009 Special PSU Award at the top end of the vesting range, and Mr. McAdam’s 2011 Special PSU Award at the maximum value, in each case including accrued dividend equivalents through December 31, 2011 that will be paid to the executives if the awards vest at the indicated levels.

4

This column represents the value of the PSU awards listed in column (i) based on a share price of $40.12, the closing price of Verizon’s common stock on December 30, 2011.

5

Each option award listed for Mr. McAdam represents unexercised partnership value appreciation rights granted by Verizon Wireless, his employer on the date the rights were granted. When he exercises these rights he will receive a cash amount equal to the difference between the then current value of the corresponding Verizon Wireless partnership rights over the exercise price for such rights as reported in the table. The Option Awards section of the table shows the number of unexercised partnership value appreciation rights held by Mr. McAdam at year-end, the exercise price and expiration date of the award. The values in the Stock Awards section of the table are attributable to grants of Verizon RSU and PSU awards.

Value Realized from Stock Options and Certain Stock-Based Awards

The following table reports the number of options that the named executive officers exercised in 2011 and the value realized from the vesting of the following stock-based awards:

  • 2009 PSUs that vested on December 31, 2011; and
  • 2009 RSUs that vested on December 31, 2011 for Mr. McAdam, Mr. Mead, Ms. Ruesterholz, Mr. Shammo and Mr. Milch.

In 2012, based on the Company’s relative TSR, the Committee, and for Messrs. McAdam and Seidenberg the independent members of the Board, approved a payment of 75% of the target number of PSU awards granted for the 2009-2011 performance cycle for all participants, including the named executive officers. The Committee and the independent members of the Board also approved the portion of Mr. Seidenberg’s 2009 PSU award relating to strategic initiatives as described on pages 39-40. The values of the 2009 PSU awards for Mr. McAdam, Mr. Mead, Ms. Ruesterholz, Mr. Shammo, Mr. Milch and Mr. Seidenberg were $2,688,431, $1,710,749, $2,183,156, $1,485,860, $1,784,517 and $20,000,000, respectively, and the value of the 2009 RSUs for Mr. McAdam, Mr. Mead, Ms. Ruesterholz, Mr. Shammo and Mr. Milch were $2,389,548, $1,520,668, $1,940,584, $1,320,952 and $1,586,407, respectively.

Option Exercises and Stock Vested

 

Option Awards

Stock Awards

Name
(a)

Number of Shares
Acquired on
Exercise
(#)
(b)

Value Realized on
Exercise
($)
(c)

Number of Shares
Acquired on
Vesting1
(#)
(d)

Value Realized on
Vesting1
($)
(e)

Mr. McAdam

0

0

126,570

  5,077,979

Mr. Mead

0

0

  80,544

  3,231,417

Ms. Ruesterholz

10,000

42,900

102,785

  4,123,740

Mr. Shammo

0

0

  69,960

  2,806,812

Mr. Milch

14,388

52,237

  84,021

  3,370,924

Mr. Seidenberg

0

0

498,504

20,000,000

1

The amounts include dividend equivalents that were credited on the PSU and RSU awards that vested on December 31, 2011 in accordance
with the terms of the awards.

Pension Plans

Effective June 30, 2006, Verizon froze all future pension accruals under its management tax-qualified and nonqualified defined benefit pension plans. All accruals under the Verizon Wireless defined benefit retirement plan (tax-qualified and nonqualified) were frozen as of December 31, 2006. Each of the named executive officers other than Mr. Shammo is eligible for a frozen pension benefit.

Verizon Management Pension Plan and Verizon Excess Pension Plan.  The Verizon Management Pension Plan is a tax-qualified defined benefit pension plan and the Verizon Excess Pension Plan is a nonqualified defined benefit pension plan. Messrs. Mead, Milch and Seidenberg and Ms. Ruesterholz are eligible for benefits under the Verizon Management Pension Plan and the Verizon Excess Pension Plan. Mr. McAdam is not eligible for benefits under either of these plans because he was employed by Verizon Wireless prior to January 1, 2007. Under the Verizon Management Pension Plan and the Verizon Excess Pension Plan, the normal retirement age is age 65 with at least 5 years of service and the early retirement age for unreduced benefits is age 55 with 15 or more years of service, and total age plus years of service equal to at least 75. Mr. Seidenberg is eligible for normal retirement benefits, and Mr. Mead and Ms. Ruesterholz are eligible for early retirement benefits under the Verizon Management Pension Plan. For Messrs. Mead, Milch and Seidenberg and Ms. Ruesterholz, their benefit under the Verizon Excess Pension Plan is based on the cash balance formula noted below, and each of them is vested in the benefit.

Until June 30, 2006, Mr. Seidenberg and Ms. Ruesterholz earned pension benefits under either (i) a cash balance formula that provided for retirement pay credits equal to between four and seven percent (depending on age and service) of annual eligible pay for each year of service or (ii) a highest average pay formula based on 1.35% of the executive’s average annual eligible pay for the five highest consecutive years for each year of service. Until June 30, 2006, Mr. Milch earned pension benefits under the cash balance formula. Under the cash balance formula, a participant’s account balance is also credited with monthly interest based upon the prevailing market yields on certain U.S. Treasury obligations. Eligible pay under the Verizon Management Pension Plan consisted of the employee’s base salary and the short-term incentive award, up to the IRS qualified plan compensation limit. Pension benefits for all eligible pay in excess of the IRS limit were provided under the Verizon Excess Pension Plan based on the cash balance formula. At the time that the tax-qualified and nonqualified pension plans were frozen to future pension accruals on June 30, 2006, plan participants were provided with a one-time additional 18 months of benefits as a transition matter.

As a former employee of GTE Wireless Incorporated, Mr. Mead earned a pension benefit under the Verizon Management Pension Plan based on the better of two highest average pay formulas. The first formula was based on 1.35% of his average annual eligible pay for the five highest consecutive eligible years of service. The second formula was based on eligible pay for the five highest consecutive eligible years of service and was integrated with social security, with a 1.15% accrual for eligible pay under the social security integration level and a 1.45% accrual above the social security integration level. Both of these formulas were discontinued on May 31, 2004 for former GTE Wireless Incorporated employees employed by Verizon Wireless, and Mr. Mead ceased to accrue a pension under those formulas on May 31, 2004. Effective October 23, 2005, Mr. Mead transferred from Verizon Wireless to Verizon, and he started to again earn a pension under the better of (i) the 1.35% highest average pay formula or (ii) the cash balance formula. Mr. Mead’s service with Verizon Wireless from June 1, 2004 through October 22, 2005 was excluded from any pension calculation. As noted above, accruals under the 1.35% highest average pay formula and cash balance formula were frozen effective June 30, 2006.

At the time of Mr. Mead’s transfer from Verizon Wireless to Verizon effective October 23, 2005, the value of his nonqualified benefit was determined as a lump sum, and a nonqualified cash balance account was created under the Verizon Excess Pension Plan using this value as the opening balance as of November 1, 2005. Mr. Mead earned retirement pay credits equal to 7% (based on age and eligible service) of annual eligible pay in excess of the pay cap for each year of service after October 23, 2005, including monthly interest credits. As noted above, accruals under the nonqualified cash balance formula were frozen effective June 30, 2006.

Verizon Wireless Retirement Plan.  In 2001, Verizon Wireless consolidated the pension plans of several predecessor companies under the Verizon Wireless Retirement Plan. Mr. McAdam is entitled to both a tax-qualified and a nonqualified pension benefit under this plan. Mr. McAdam’s tax-qualified pension benefit was determined under two formulas: (i) for the period from January 1, 2001 until May 31, 2004, a cash balance formula that provided pay credits equal to two percent of annual eligible pay up to the IRS compensation limit (under the cash balance formula, a participant’s account balance is also credited on an ongoing basis with interest credits based upon the 30-year Treasury bond); and (ii) a final average pay formula based on 24 years of service multiplied by 1.45% of Mr. McAdam’s average annual eligible pay for the five final consecutive years for each year of service through the end of 2006. The normal retirement age under the Verizon Wireless Retirement Plan is 65. The early retirement age (for unreduced benefits) under the plan is 55. In 2008, the Verizon Wireless Retirement Plan was amended to recognize eligibility service and age increases for employees who transferred to Verizon on or after January 1, 2001. As a result, Mr. McAdam continues to earn service towards early retirement benefits, based on his frozen pension accrual service as of December 31, 2006. Mr. McAdam’s nonqualified plan benefit was determined using the 1.45% final average pay formula and was calculated based on 10 years of service and only included his eligible pay in excess of the IRS compensation limit through the end of 2006, at which time no further adjustments to eligible pay were recognized under the plan. For Mr. McAdam, eligible pay consisted of base salary and the short-term incentive award. No participant under the plan was eligible for cash balance credits under the nonqualified portion of the plan.

The following table illustrates the actuarial present value as of December 31, 2011 of pension benefits accumulated by the named executive officers, other than Mr. Shammo, who is not eligible for pension benefits.

Pension Benefits

Name
(a)

Plan Name
(b)

Number of Years
Credited Service
(#)
(c)

Present Value of
Accumulated
Benefit1
($)
(d)

Payments During
Last Fiscal Year
($)
(e)

Mr. McAdam

Verizon Wireless Retirement Plan - Qualified

28

1,112,334

0

 

Verizon Wireless Retirement Plan - Nonqualified

10

1,678,509

0

Mr. Mead

Verizon Management Pension Plan

33

1,141,507

0

 

Verizon Excess Pension Plan

6

3,349,845

0

Ms. Ruesterholz

Verizon Management Pension Plan

28

848,433

0

 

Verizon Excess Pension Plan

7

167,657

0

Mr. Milch

Verizon Management Pension Plan

18

176,491

0

 

Verizon Excess Pension Plan

7

108,146

0

Mr. Seidenberg

Verizon Management Pension Plan

46

1,699,897

0

 

Verizon Excess Pension Plan

7

1,316,676

0

1

The values are based on the assumptions for the actuarial determination of pension benefits as required by the relevant accounting standards as described in note 11 to the Company’s consolidated financial statements for the year ended December 31, 2011, as included in the Company’s 2011 Annual Report to Shareowners. However, in accordance with the requirements for this table, the values are calculated using the executive’s retirement at the earliest age at which he or she can retire without having the retirement benefit reduced under the plan. For Mr. McAdam, the assumptions are generally the same as described above.

Defined Contribution Savings Plans

The named executive officers are participants in the Company’s tax-qualified defined contribution savings plan, the Verizon Management Savings Plan, which is referred to as the Savings Plan, and its nonqualified defined contribution savings plan, the Verizon Executive Deferral Plan, which is referred to as the Deferral Plan. The named executive officers participate in these plans on the same terms as other participants in these plans.

Under the terms of the Savings Plan, participants are eligible to defer up to 16% of their eligible pay into the Savings Plan up to the IRS qualified plan compensation limit. Verizon provides a matching contribution equal to 100% of the first 6% of eligible pay that any participant contributes to the Savings Plan. Under the Deferral Plan, a participant may defer up to 100% of base salary in excess of the IRS qualified plan compensation limit, short-term incentive compensation and long-term incentive compensation. Verizon provides a matching contribution equal to 100% of the first 6% of base salary and short-term incentive compensation that a participant contributes to the Deferral Plan. Deferrals of long-term incentive compensation, such as PSUs and RSUs, are not eligible for Company matching contributions. Participants in the Savings Plan and the Deferral Plan are eligible for an additional discretionary matching contribution of up to 3% of eligible pay, in the case of the Savings Plan, and eligible deferrals, in the case of the Deferral Plan. In determining whether to make a discretionary matching contribution, the Committee uses the same criteria it uses to determine the short-term incentive award paid to employees at the corporate level. For example, if the Short-Term Plan award for corporate employees is paid at target, employees who participate in the Savings Plan and employees who participate in the Deferral Plan would be eligible for up to an additional 2% in Company matching contributions. Employees must contribute at least 6% of their eligible pay to the Savings Plan and the Deferral Plan in order to be eligible for the full discretionary matching contribution. For 2011, the discretionary matching contribution was 1.5%.

Messrs. McAdam, Mead and Shammo were participants in the Verizon Wireless Executive Deferral Plan while they were employed at Verizon Wireless. Under the Verizon Wireless Executive Deferral Plan, a participant may defer up to 100% of base salary in excess of the IRS qualified plan compensation limit and short-term incentive compensation. Verizon Wireless provides a matching contribution equal to 100% of the first 6% of base salary and short-term incentive compensation that a participant contributes to the plan. Participants are eligible for an additional discretionary profit-sharing contribution to the Verizon Wireless Executive Deferral Plan of up to 3% of eligible pay and eligible deferrals. In determining whether to make a profit-sharing contribution, the Verizon Wireless Human Resources Committee uses the same criteria it uses to determine the short-term incentive award paid to employees at the company level.

Participants in the Deferral Plan and the Verizon Wireless Executive Deferral Plan may elect to invest their deferrals in a hypothetical cash account that earns a return rate equal to the long-term, high-grade corporate bond yield average as published by Moody’s Investor Services or in the other hypothetical investment options available to all plan participants under the Savings Plan. Participants in the Deferral Plan and the Verizon Wireless Executive Deferral Plan may generally elect to receive their benefits in a lump sum or installments, commencing on a separation from service or specific date elected by the participant.

Messrs. Mead, Milch and Seidenberg and Ms. Ruesterholz also have account balances under the Income Deferral Plan (referred to as the IDP). The IDP is a nonqualified deferred compensation plan that was the predecessor to the Deferral Plan. The IDP was amended to freeze the accrual of benefits under the plan as of the close of business on December 31, 2004. Participants in the IDP no longer accrue any additional benefits other than market-based investment earnings or losses on their individual accounts. No new deferrals were permitted after 2004. Participants retain the ability to invest their frozen accounts in the investment options available under the plan. Participants in the IDP do not receive matching contribution credits or retirement credits under the plan.

Messrs. McAdam, Mead, and Shammo also have account balances under the Verizon Wireless Executive Savings Plan (referred to as the ESP). The ESP is a nonqualified deferred compensation plan that was the predecessor to the Verizon Wireless Executive Deferral Plan. The ESP was amended to freeze the accrual of benefits under the plan as of the close of business on December 31, 2004. Participants in the ESP no longer accrue any additional benefits other than market-based investment earnings or losses on their individual accounts. No new deferrals were permitted after 2004. Participants retain the ability to invest their frozen accounts in the investment options available under the ESP. Participants in the ESP do not receive matching contribution credits or retirement credits under the plan.

The following table shows the 2011 account activity for each named executive officer and includes each executive’s contributions, Company matching contributions, earnings, withdrawals and distributions and the aggregate balance of his or her total deferral account as of December 31, 2011.

Nonqualified Deferred Compensation

 
 
 
Name
(a)

 

Executive
Contributions
in Last FY1

($)
(b)

Registrant
Contributions
in Last FY2

($)
(c)

Aggregate
Earnings
in Last FY3

($)
(d)

Aggregate
Withdrawals/
Distributions4

($)
(e)

Aggregate
Balance at
Last FYE4

($)
(f)

Mr. McAdam

Verizon Executive Deferral Plan

173,493

215,580

315,445

0

3,521,134

 

Verizon Wireless Executive Deferral Plan

0

0

21,352

0

419,357

 

Verizon Wireless Executive Savings Plan

0

0

101,532

0

1,994,111

Mr. Mead

Verizon Executive Deferral Plan

3,399,271

93,747

716,095

0

9,887,641

 

Verizon Income Deferral Plan

0

0

13,473

0

265,142

 

Verizon Wireless Executive Deferral Plan

0

23,560

87,877

0

1,731,460

 

Verizon Wireless Executive Savings Plan

0

0

81,666

0

1,351,849

Ms. Ruesterholz

Verizon Executive Deferral Plan

3,384,298

96,294

542,153

630,275

6,464,496

 

Verizon Income Deferral Plan

0

0

244,978

0

3,168,871

Mr. Shammo

Verizon Executive Deferral Plan

88,563

91,066

318,231

109,716

2,357,202

 

Verizon Wireless Executive Deferral Plan

0

0

6,495

0

127,571

 

Verizon Wireless Executive Savings Plan

0

0

119,091

0

1,079,586

Mr. Milch

Verizon Executive Deferral Plan

151,829

78,362

201,557

0

2,685,237

 

Verizon Income Deferral Plan

0

0

334,009

0

4,587,800

Mr. Seidenberg

Verizon Executive Deferral Plan

347,550

448,918

750,371

0

8,210,273

 

Verizon Income Deferral Plan

0

0

4,031,467

0

59,696,457

1

Of the amounts listed in this column, the following amounts are also included in the Summary Compensation Table in columns (c) and (j): for Mr. McAdam, $69,300; for Mr. Mead, $144,000; for Ms. Ruesterholz, $45,500; for Mr. Shammo, $43,000; for Mr. Milch, $22,454; and for Mr. Seidenberg, $111,300.

2

The amounts listed in this column are also included in columns (i) and (j) of the Summary Compensation Table.

3

Of the amounts listed in this column, the following amounts are also included in the Summary Compensation Table in columns (h) and (j): for Mr. McAdam, $29,668; for Mr. Mead, $65,875; for Ms. Ruesterholz, $36,750; for Mr. Shammo, $4,499; for Mr. Milch, $29,535; and for Mr. Seidenberg, $305,657.

4

The aggregate amounts shown in columns (e) and (f) include the following amounts that were reported as compensation to the named executive officer in the Summary Compensation Table in previous proxy statements of the registrant:

  • For Mr. McAdam, a total of $1,707,402 was reported (2008 to 2011);
  • For Mr. Mead, a total of $503,836 was reported (2010 to 2011);
  • For Ms. Ruesterholz, a total of $197,155 was reported (2010 to 2011);
  • For Mr. Shammo, a total of $129,055 was reported (2010 to 2011); and
  • For Mr. Seidenberg, a total of $42,141,677 was reported (2008 to 2011).

Potential Payments Upon Termination or Change in Control

The following summaries and tables describe and quantify the potential payments and benefits that would be provided to each of our named executive officers if a termination of employment or change in control of Verizon had occurred at the end of 2011 under Verizon’s compensation plans and agreements.

Payments Made Upon Termination

Regardless of the manner in which a named executive officer’s employment terminates, the executive is entitled to receive amounts earned during the term of employment. This includes amounts accrued and vested under our pension plans and nonqualified deferred compensation plans, which are reported in the “Pension Benefits” and “Nonqualified Deferred Compensation” tables above. Those benefits are not included in the summaries and tables below.

In addition, amounts earned under our 2011 Short-Term Plan awards and amounts earned under our 2009 Long-Term Plan awards are not included in the summaries or tables below. Amounts earned under our 2011 Short-Term Plan awards are discussed in the Compensation Discussion and Analysis on pages 34-36 and are reported in the Summary Compensation Table on page 44. Amounts earned under our 2009 Long-Term Plan awards are discussed in the Compensation Discussion and Analysis on pages 38-40 and are reported in the Option Exercises and Stock Vested table on page 48. If a named executive officer’s employment had terminated on December 31, 2011 for any reason other than for cause, the full amount of the 2011 Short-Term Plan award and the full amount of the 2009 Long-Term Plan awards, in each case to the extent earned, would have been payable. These amounts would be determined and payable at the same time as awards are determined and paid to participating employees generally under those plans. In the event of a termination for cause, no amount would have been payable under these awards.

Potential Payments Upon Qualifying Separation or Involuntary Termination Without Cause

Messrs. McAdam and Seidenberg.  As Chairman and CEO, Mr. McAdam is not eligible to participate in the Senior Manager Severance Plan described below. Mr. McAdam is also not a party to an employment agreement with Verizon or any other agreement that would provide him with cash severance benefits in the event his employment is involuntarily terminated by Verizon without cause. As the former Chairman and CEO, Mr. Seidenberg was also not eligible to participate in the Senior Manager Severance Plan. Mr. Seidenberg was also not a party to an employment agreement with Verizon or any other agreement that would have provided him with cash severance benefits in the event his employment was involuntarily terminated by Verizon without cause. Mr. Seidenberg retired from Verizon on December 31, 2011.

Senior Manager Severance Plan.  Verizon provides severance benefits to certain employees, including all of the named executive officers other than the Chairman and CEO, under its Senior Manager Severance Plan. Under the plan, a named executive officer is eligible to receive severance benefits if he or she experiences a “qualifying separation” from Verizon, which is generally defined as an involuntary termination by Verizon without cause, a voluntary termination by the executive solely due to the executive’s refusal to accept a qualifying reclassification or relocation (as those terms are defined in the plan) or a determination by the independent members of the Board that the named executive officer has incurred a qualifying separation. A severance benefit, if triggered, is payable to an executive only if the executive executes a release of claims against Verizon in the form satisfactory to Verizon and agrees not to compete or interfere with any Verizon business for a period of one year after termination from employment and always to protect Verizon’s trade secrets and proprietary information.

If a named executive officer incurs a qualifying separation under the plan, he or she is eligible to receive the following benefits: (i) a lump-sum cash separation payment equal to two times the sum of his or her base salary and target short-term incentive opportunity; and (ii) continued medical, dental and vision coverage for two years.

In addition, if the executive’s qualifying separation occurs prior to the last day of the year, the executive will receive a prorated Short-Term Plan award for the year in which the termination occurs, determined based on the actual level of achievement of the performance criteria under the Short-Term Plan for the applicable year and payable at the time that awards are payable to participating employees generally under the plan. To the extent that an executive also becomes eligible for severance benefits under any outstanding agreement, plan or any other arrangement, the executive’s cash severance payment under the Senior Manager Severance Plan will be reduced on a dollar-for-dollar basis by the amount or single-sum value of the severance benefits payable to the executive under such other agreement, plan or arrangement.

Other Benefits.  Upon an involuntary termination of employment without cause, Messrs. Mead, Shammo, Milch and Ms. Ruesterholz would also be eligible to receive financial planning and outplacement services for one year following termination on the same basis as provided to other senior executives. Messrs. McAdam and Seidenberg would be eligible to receive financial planning services for one year following such a termination on the same basis as provided to other senior executives. Executives are not eligible to receive financial planning services unless they participate in the program in the year in which their employment terminates. In addition, under the terms of the executive life insurance plan, each named executive officer who is retirement eligible upon termination and who continues to pay the annual premiums on the life insurance policy owned by the executive would be eligible to receive an annual payment from Verizon to pay a portion of the annual premium until (i) in the case of Messrs. McAdam, Mead and Shammo, the latest of the executive’s attainment of age 60, the completion of 5 years of plan participation or qualifying retirement; (ii) in the case of Mr. Seidenberg and Ms. Ruesterholz, the later of the executive’s attainment of age 70 or 20 years of plan participation; or (iii) in the case of Mr. Milch, the later of the executive’s attainment of age 65 or 15 years of plan participation. Retirement eligibility is generally defined as having attained 75 points (age plus years of service) with at least 15 years of service.

Estimated Payments.  The following table shows Verizon’s estimate of the amount of benefits the named executive officers, other than Mr. Seidenberg, would have been entitled to receive had their employment been involuntarily terminated without cause or terminated for good reason on the last business day of 2011 and had incurred a qualifying separation under the Senior Manager Severance Plan. The actual payments and benefits that Mr. Seidenberg became entitled to receive upon his retirement on December 31, 2011, and the estimated payments under the other hypothetical termination scenarios, are discussed under the heading “Retirement of Mr. Seidenberg” on pages 56-57.

 
 
Name

Cash Separation
Payment
($)

Continued Health
Benefits1
($)

Outplacement
Services
($)

Financial
Planning2
($)

Executive Life
Insurance Benefit
($)

Mr. McAdam

0

0

0

0

383,667

Mr. Mead

3,081,250

21,492

14,500

10,000

130,361

Ms. Ruesterholz

2,975,000

30,977

14,500

0

825,663

Mr. Shammo

2,868,750

30,977

14,500

10,000

191,767

Mr. Milch

2,656,250

30,977

14,500

10,000

148,773

1

The amounts reflect Verizon’s estimated cost of providing medical, dental and vision coverage for two years.

2

Mr. McAdam and Ms. Ruesterholz did not participate in the financial planning program in 2011 and, as a result, would have been ineligible to receive financial planning services if their employment had terminated on the last business day of 2011.

Potential Payments Upon Death, Disability or Retirement

Under the terms of the executive life insurance plan, the event of disability or a qualifying retirement, a named executive officer who continues to pay the annual premiums on the life insurance policy owned by the executive would be eligible to receive an annual payment from Verizon to pay a portion of the annual premium until: (i) in the case of Messrs. McAdam, Mead and Shammo, the latest of the executive’s attainment of age 60, the completion of 5 years of plan participation or qualifying retirement, (ii) in the case of Messrs. Seidenberg and Ms. Ruesterholz, the later of the executive’s attainment of age 70 or 20 years of plan participation; or (iii) in the case of Mr. Milch, the later of the executive’s attainment of age 65 or 15 years of plan participation.

Under the Short-Term Plan, if the named executive officer’s employment terminates due to death, disability or a qualifying retirement prior to the last day of the year, the executive would be eligible for a prorated Short-Term Plan award for the year in which the termination date occurred, determined based on the actual level of achievement of the performance criteria under the Short-Term Plan for the applicable year and payable at the time that awards are generally payable to participating employees under the plan. As described above, if the executive’s employment terminates on the last day of the year for any reason other than for cause, the full amount of the Short-Term Plan award would have been payable.

In addition, upon death, disability or a qualifying retirement, each named executive officer would also be eligible to receive financial planning services for one year following termination on the same basis as provided to other senior executives. Executives are not eligible to receive financial planning services unless they participate in the program in the year in which their employment terminates. Upon disability, the named executive officers would also be eligible for disability benefits under the tax-qualified and nonqualified disability plans.

Estimated Payments.  The following table shows Verizon’s estimate of the amount of benefits the named executive officers, other than Mr. Seidenberg, would have been entitled to receive had their employment terminated due to death, disability or qualifying retirement on the last business day of 2011. The actual payments and benefits that Mr. Seidenberg became entitled to receive upon his retirement on December 31, 2011, and the estimated payments under the other hypothetical termination scenarios, are discussed under the heading “Retirement of Mr. Seidenberg” below.

 
Name

Executive Life Insurance Benefit
($)

Disability  Benefit1
($)

Financial Planning2
($)

Mr. McAdam

     

Death

6,300,000

0

0

Disability

383,667

1,572,453

0

Retirement

383,667

0

0

Mr. Mead

     

Death

2,538,000

0

10,000

Disability

130,361

1,500,840

10,000

Retirement

130,361

0

10,000

Ms. Ruesterholz

     

Death

3,951,000

0

0

Disability

825,663

2,048,246

0

Retirement

825,663

0

0

Mr. Shammo

     

Death

2,364,000

0

10,000

Disability

191,767

399,371

10,000

Retirement3

0

0

0

Mr. Milch

     

Death

2,188,000

0

10,000

Disability

148,773

1,877,070

10,000

Retirement3

0

0

0

1

Assumes that each named executive officer would be immediately eligible for long-term disability benefits from Verizon’s qualified and nonqualified disability benefit plans. Mr. Shammo does not participate in the nonqualified portion of the disability benefit. The assumptions used to calculate the value of the disability benefits include a discount rate of 5.0% and mortality and recovery based on the 1987 National Association of Insurance Commissioners Group Disability Table. These rates represent the probability of death or recovery between the date of disability and the payment end date. The qualified portion of the disability benefit for Mr. McAdam, Mr. Mead, Ms. Ruesterholz, Mr. Shammo and Mr. Milch is estimated at $491,735, $469,340, $656,357, $399,371 and $586,994, respectively, and the nonqualified portion of the benefit is estimated at $1,080,718, $1,031,500, $1,391,889, $0 and $1,290,076, respectively. In order to receive the nonqualified portion of the disability benefit, the executive must pay the premium associated with the qualified portion of the benefit.

2

Mr. McAdam and Ms. Ruesterholz did not participate in the financial planning program in 2011 and, as a result, would have been ineligible to receive financial planning services if their employment had terminated on the last business day of 2011.

3

Messrs. Shammo and Milch would not have been entitled to receive executive life insurance benefits or financial planning benefits because they had not fulfilled the eligibility requirements for retirement under the terms of those programs on the last business day of 2011.

Potential Payments Upon Change in Control

Verizon does not maintain any plans or arrangements that provide for any named executive officer to receive enhanced cash severance or other cash payments in connection with a change in control of Verizon. If the named executive officer’s employment terminates in connection with or following a change in control, he or she would be eligible for the same benefits, if any, that would become payable to the executive upon his or her termination under the circumstances as described above. Under the Short-Term Plan, if a change in control occurs, all outstanding awards will vest and become payable on the regularly scheduled payment date.

Equity Awards

As is the case for all participants under the terms of the Long-Term Plan, upon an involuntary termination of employment without cause, death, disability or qualifying retirement, each named executive officer’s then unvested RSUs will vest and be paid on the regularly scheduled payment date after the end of the applicable award cycle and each named executive officer’s then unvested PSUs will vest and be paid on the regularly scheduled payment date after the end of the applicable award cycle, but only if and to the extent that the applicable performance criteria for the award are achieved at the end of the applicable award cycle. However, Mr. McAdam’s Special PSU award granted in 2009 and the Special PSU and RSU awards granted in 2011 will be forfeited if Mr. McAdam retires prior to December 31, 2012, in the case of the Special 2009 award, or July 31, 2016, in the case of the 2011 Special PSU and RSU awards. Under the Long-Term Plan, a qualifying retirement generally means to retire after having attained at least 15 years of vesting service (as defined under the applicable Verizon tax-qualified savings plan) and a combination of age and years of vesting service that equals or exceeds 75 points. As of December 31, 2011, Messrs. McAdam, Mead and Seidenberg and Ms. Ruesterholz were retirement-eligible under the Long-Term Plan.

In addition, under the Long-Term Plan, if, in the 12 months following a change in control of Verizon, a participant’s employment is involuntarily terminated without cause, all then-unvested RSUs will vest and be paid on the regularly scheduled payment date after the end of the applicable award cycle and all then-unvested PSUs will vest at target level performance and be paid on the regularly scheduled payment date after the end of the applicable award cycle.

Under the Long-Term Plan, a change in control of Verizon is generally defined as the occurrence of any of the following:

  • Any person becomes a beneficial owner of shares representing twenty percent or more of Verizon’s outstanding voting stock;
  • Verizon consummates a merger, consolidation, reorganization or any other business combination; or
  • The Board adopts resolutions authorizing the liquidation or dissolution, or sale of all or substantially all of the assets, of Verizon.

However, a change in control will not occur if:

  • The amount of Verizon voting stock outstanding immediately before the transaction represents at least forty-five percent of the combined voting power of the corporation that survives the transaction;
  • Verizon Directors constitute at least one-half of the board of directors of the surviving corporation;
  • Verizon’s CEO is the CEO of the surviving corporation; and
  • The headquarters of the surviving corporation is located in New York, New York.

Estimated Payments.  The following table shows the estimated value of the payouts that the named executive officers, other than Mr. Seidenberg, could have received in respect of their outstanding unvested equity awards if any of the following events occurred on the last business day of 2011: (i) a change in control of Verizon without a termination of employment; (ii) a change in control of Verizon and an involuntary termination of employment without cause; and (iii) a termination of employment as a result of an involuntary termination without cause, qualifying retirement, or death or disability. The amounts represent the estimated value of the RSU and PSU awards granted in 2010 and 2011, and in addition for Mr. McAdam, his Special 2009 PSU award and his Special 2011 PSU and RSU awards, that would have been payable pursuant to the terms of the award agreements, calculated using the total number of units (including accrued dividends) on the last business day of 2011 and $40.12, Verizon’s closing stock price on that date, and for the PSUs, assuming the award would vest at target performance levels. The actual amount payable under these awards can be determined only at the time the award would be paid. The actual payments and benefits that Mr. Seidenberg became entitled to receive upon his retirement on December 31, 2011, and the estimated payments under the other hypothetical termination scenarios, are discussed under the heading “Retirement of Mr. Seidenberg” below.

 
 
 
Name

 
Change In Control
Without Termination
($)

Change In Control
And Termination
Without Cause
($)

 
Termination
Without Cause
($)

 
 
Retirement1
($)

 
Death or
Disability
($)

Mr. McAdam

0

34,851,321

34,851,321

16,917,882

34,851,321

Mr. Mead

0

8,609,271

8,609,271

8,609,271

8,609,271

Ms. Ruesterholz

0

9,380,497

9,380,497

9,380,497

9,380,497

Mr. Shammo

0

8,492,401

8,492,401

0

8,492,401

Mr. Milch

0

7,625,448

7,625,448

0

7,625,448

1

Messrs. Shammo and Milch would not have been entitled to receive any amount in respect of their outstanding unvested equity awards upon retirement because they had not fulfilled the eligibility requirements for retirement under the terms of the Long-Term Plan on the last business day of 2011.

Retirement of Mr. Seidenberg

Mr. Seidenberg retired from the Company on December 31, 2011. The following table sets forth the payments and benefits Mr. Seidenberg became entitled to receive upon his retirement.

 
Equity1
($)

 
Financial Planning
($)

Executive Life
Insurance Benefit2
($)

33,501,483

10,000

1,848,265

1

Represents the estimated value of the RSU and PSU awards granted in 2010 and 2011. The value of these awards was calculated using the total number of units (including accrued dividends) on the last business day of 2011 and $40.12, Verizon’s closing stock price on that date, and, in the case of the PSUs, assuming the awards would vest at target performance levels. These awards will be paid on the regularly scheduled payment date following the end of the applicable performance period based on the stock price on the last day of the performance period, and in the case of the PSUs, only if and to the extent that the applicable performance criteria have been satisfied.

2

Represents the total amount of annual payments to Mr. Seidenberg to pay a portion of the life insurance policy owned by him, provided that he continues to pay the annual premiums pursuant to the terms of the program.

Mr. Seidenberg executed a release of claims satisfactory to Verizon as a condition to the receipt of the foregoing benefits and agreed not to compete or solicit employees or customers of Verizon for two years following his retirement and agreed not to compete or interfere with any Verizon business for a period of two years after termination from employment and always to protect Verizon’s trade secrets and proprietary information.

SEC rules require that we disclose the hypothetical payments and benefits that Mr. Seidenberg would have been entitled to receive if certain events had occurred on December 31, 2011 and Mr. Seidenberg had not retired on that date, notwithstanding the fact that the events did not occur and Mr. Seidenberg retired on that date. If on December 31, 2011 there had been a change in control of Verizon without a termination of Mr. Seidenberg’s employment, Mr. Seidenberg would not have been entitled to any payments or benefits. Mr. Seidenberg would have been entitled to receive a $636,770 disability benefit if he had become disabled on December 31, 2011 and not retired. This assumes that Mr. Seidenberg would have been immediately eligible for long-term disability benefits from Verizon’s qualified and nonqualified disability benefit plans and is based on a discount rate of 5.0% and mortality and recovery based on the 1987 National Association of Insurance Commissioners Group Disability Table, which represent the probability of death or recovery between the date of disability and the payment end date. The qualified portion of the disability benefit is estimated at $199,130, the nonqualified portion of the benefit is estimated at $437,640, and in order to receive the nonqualified portion of the disability benefit, Mr. Seidenberg would have been required to pay the premium associated with the qualified portion of the benefit. Mr. Seidenberg would have been entitled to receive the same life insurance benefit that he received upon his retirement quantified in the table above if his employment had been terminated without cause following a change in control, was terminated without cause under any other circumstance, or he had become disabled on December 31, 2011. If he had died on December 31, 2011, Mr. Seidenberg’s beneficiaries would have been entitled to receive $10,051,000 under the life insurance policy owned by him. He would have been entitled to receive the same financial planning benefit that he received upon his retirement quantified in the table above if his employment was terminated without cause following a change in control, was terminated without cause under any other circumstance, or he died or became disabled on December 31, 2011. In addition, if Mr. Seidenberg was terminated without cause following a change in control, was terminated without cause under any other circumstance, or he died or became disabled on December 31, 2011, Mr. Seidenberg would have been entitled to the same treatment of his equity awards that he received upon his retirement with the same estimated value quantified in the table above and based on the same assumptions and subject to the same terms and conditions described in footnote 1 to that table.

Non-Employee Director Compensation

In 2011, each non-employee Director of Verizon received an annual cash retainer of $85,000, and each Committee Chairperson received an additional annual cash retainer of $15,000, with the exception of the Audit Committee Chairperson who received an additional $25,000 annual cash retainer. Each Director also received an annual grant of Verizon share equivalents valued at $130,000 on the grant date. No meeting fees were paid if a Director attended a Board or Committee meeting on the day before or the day of a regularly scheduled Board meeting. Each Director who attended such a meeting held on any other date received a meeting fee of $2,000.

A new Director who joins the Board receives a one-time grant of 3,000 Verizon share equivalents valued at the closing price on the date that the Director joins the Board.

All share equivalents are automatically credited to the Director’s deferred compensation account and invested in a hypothetical Verizon stock fund. Amounts in the deferred compensation account are paid in a lump sum in the year following the year that the Director leaves the Board.

Under the Verizon Executive Deferral Plan, Directors may defer all or part of their annual cash retainer and meeting fees. A Director may elect to invest these amounts in a hypothetical cash account that earns a return rate equal to the long-term, high-grade corporate bond yield average as published by Moody’s Investor Services or in the other hypothetical investment options available to participants in Verizon’s Management Savings Plan.

Directors who were elected to the Board before 1992 participate in a charitable giving program. Upon a Director’s death, the Company will contribute an aggregate of $500,000 to one or more qualifying charitable organizations designated by the Director. Directors who served as directors of NYNEX Corporation participate in a similar program for which the aggregate contribution is $1,000,000, payable in ten annual installments commencing when a Director retires or attains age 65 (whichever occurs later) or dies. Directors who served as directors of GTE Corporation participate in a similar program for which the aggregate contribution is $1,000,000, payable in five annual installments commencing upon the Director’s death. The GTE and NYNEX programs are financed through the purchase of insurance on the life of each participant. The charitable giving programs are closed to future participants.

Director Compensation

Name
(a)

Fees Earned or
Paid in Cash1

($)
(b)

Stock
Awards2

($)
(c)

Option
 Awards

($)
(d)

Non-Equity
Incentive Plan
Compensation
($)
(e)

Change in Pension
Value and
Nonqualified
Deferred
Compensation
Earnings3

($)
(f)

All Other
Compensation4

($)
(g)

Total
($)
(h)

Richard L. Carrión

95,000

130,000

0

0

5,493

0

230,493

Melanie L. Healey

9,083

124,143

0

0

0

0

133,226

M. Frances Keeth

103,000

130,000

0

0

0

0

233,000

Robert W. Lane

99,000

130,000

0

0

2,192

0

231,192

Sandra O. Moose*

118,000

130,000

0

0

3,821

0

251,821

Joseph Neubauer*

112,000

130,000

0

0

0

0

242,000

Donald T. Nicolaisen*

128,000

130,000

0

0

0

0

258,000

Thomas H. O’Brien**

50,500

130,000

0

0

0

0

180,500

Clarence Otis, Jr.

103,000

130,000

0

0

3,758

0

236,758

Hugh B. Price

97,000

130,000

0

0

318

0

227,318

Rodney E. Slater

97,000

130,000

0

0

0

0

227,000

John W. Snow

95,000

130,000

0

0

0

0

225,000

John R. Stafford**

46,500

130,000

0

0

0

100,000

276,500

*

Denotes a Committee Chairperson.

**

Messrs. O’Brien and Stafford retired from the Board in May 2011 pursuant to the Board’s retirement policy.

1

This column includes all fees earned in 2011, whether paid in cash or deferred.

2

For each Director this column reflects the grant date fair value of the Director’s 2011 annual stock award computed in accordance with FASB ASC Topic 718. For Ms. Healey, this column reflects the grant date fair value of her annual stock award valued at $10,833, which was prorated to reflect the portion of the year that she served on the Board, and includes the one-time grant of 3,000 Verizon share equivalents with the grant date fair value of $113,310 that she received upon her appointment to the Board on December 1, 2011, in each case based on the closing price of Verizon’s common stock on the grant date. The following reflects the aggregate number of stock awards and the aggregate number of option awards outstanding as of December 31, 2011 for each person who served as a non-employee Director during 2011: Richard L. Carrión, 59,284 and 29,843; Melanie L. Healey, 3,287 and 0; M. Frances Keeth, 28,328 and 0; Robert W. Lane, 38,003 and 17,264; Sandra O. Moose, 66,439 and 17,651; Joseph Neubauer, 83,343 and 27,507; Donald T. Nicolaisen, 34,925 and 0; Thomas H. O’Brien, 0 and 4,388; Clarence Otis, Jr., 34,358 and 0; Hugh B. Price, 57,366 and 17,651; Rodney E. Slater, 11,628 and 0; John W. Snow, 27,852 and 0; and John R. Stafford, 55,373 and 17,651.

3

This column reflects above-market earnings on nonqualified deferred compensation plans. Non-employee Directors do not participate in any defined benefit pension plan.

4

The amount in this column for Mr. Stafford reflects the first installment of the charitable contribution to be made on his behalf under the NYNEX Corporation charitable giving program described above following his retirement from the Board in May 2011. In 2011, the aggregate cost of maintaining and administering the legacy charitable giving programs for all participants was $62,185.