MCI Board Accepts New Verizon Offer

    March 29, 2005

Verizon Communications announced it had agreed with MCI to amend the terms of the agreement to acquire MCI.

The MCI Board of Directors is recommending approval of the amended agreement to its shareholders.

Under the amended agreement, Verizon will acquire MCI for $23.10 per MCI common share, not including the 40 cents per share cash dividend recently paid by MCI to its shareholders. MCI’s shareholders will receive $23.50 per share including the recent 40 cent dividend, or approximately $7.6 billion in aggregate.

Under the revised agreement, MCI shareholders will receive total cash of $8.35 per share of MCI common stock. This represents up to $5.60 per share in special cash dividends (not including the 40 cents per share recently paid by MCI) and $2.75 per share in cash consideration. Verizon increased the cash consideration to be paid to MCI shareholders by $2.75 per share. In addition, MCI intends at the time of shareholder approval to accelerate payment of a $1.50 per share dividend for a total of up to $5.60 in dividends, less any interim dividends paid.

Verizon believes the revised terms provide MCI shareholders with substantial additional value. Verizon will issue no less than 0.4062 shares of Verizon stock for each share of MCI stock and has agreed to a downside protection mechanism that assures that the value of this stock component will be no less than $14.75 regardless of a decline in Verizon’s stock price between signing and closing. In addition, the MCI shareholders will participate in the upside benefit if Verizon’s stock price rises above the level that delivers the agreed minimum of $14.75 of value.

Under the amended terms, Verizon may elect to require MCI to put the proposed transaction with Verizon to a vote of the MCI shareholders. MCI has agreed that the “break-up fee” to be paid by MCI to Verizon under certain circumstances will be $240 million, and it has also agreed to reimburse Verizon for up to $10 million in expenses in certain circumstances.

Ivan Seidenberg, Verizon’s chairman and CEO, said, “Verizon and MCI together create a formidable and highly competitive company delivering a full range of mission-critical voice and data products to businesses and government. We believe our agreement with MCI represents superior value and is a compelling proposition for MCI’s shareholders, customers, employees and creditors.”

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