Item 1.01 Entry into Material Definitive Agreements

On November 17, 2006, Verizon Communications Inc. (“Verizon”) spun off the companies that comprised its domestic print and Internet yellow pages directories publishing operations (the “Distribution”). In connection with the Distribution, Verizon transferred to Idearc Inc. (the “Company”) all of its ownership interest in Idearc Information Services LLC (formerly Verizon Information Services) and other assets, liabilities, businesses and employees primarily related to Verizon’s domestic print and Internet yellow pages directories publishing operations (the “Contribution”). The Distribution was completed by making a pro rata distribution to Verizon’s stockholders of all of the outstanding shares of common stock of the Company.

In connection with the Distribution, the Company entered into agreements with Verizon to effect the Contribution and the Distribution, and to define responsibility for obligations arising before and after the date of the Distribution, including, among others, obligations relating to employees, transition services, branding, intellectual property, and taxes.

Transition Services Agreement

On November 17, 2006, Idearc Media Corp. (“Idearc Media”) entered into a Transition Services Agreement (the “Transition Services Agreement”) with Verizon Information Technologies LLC (“Verizon IT”), pursuant to which Verizon IT and its affiliates will provide specified services to Idearc Media and its affiliates on an interim basis. Among the principal services provided by Verizon IT are information technology application and support services, as well as data center services. The Transition Services Agreement generally provides that the services will be provided from six to eighteen months following the spin-off, unless a particular service is terminated pursuant to the agreement. Idearc Media will generally be able to terminate a particular service on 30 days’ advance notice, subject to extension by Verizon IT of up to an additional 30 days.

Idearc Media will pay to Verizon IT approximately $30 million in fees (exclusive of reimbursements of third party costs) for services provided pursuant to the Transition Services Agreement, assuming each service runs for the full period as contemplated by the Transition Services Agreement.

Publishing Agreement

On November 17, 2006, Idearc Media entered into a Publishing Agreement (the “Publishing Agreement”) with Verizon and Verizon Services Corp. (“Verizon Services”), pursuant to which Verizon and Verizon Services named Idearc Media their exclusive official print directory publisher of print listings and classified advertisements for wireline telephone customers in the geographic areas in which Verizon is currently the incumbent local exchange carrier. Under the Publishing Agreement, Idearc Media agreed

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to fulfill Verizon’s legal and contractual obligations to publish and distribute white pages and yellow pages directories, and to include listing information, in each of Verizon’s service areas, generally at no cost to Verizon or its customers. At Verizon’s option, Idearc Media will be obligated to fulfill Verizon’s publishing obligations in any new areas in which Verizon becomes the incumbent local exchange carrier in the future, unless Idearc Media determines in good faith that the costs associated with fulfilling those obligations would outweigh the benefits of obtaining the rights provided in the Branding Agreement (discussed under “Branding Agreement” below) for these areas.

Non-Competition Agreement

On November 17, 2006, Idearc Media entered into a Non-Competition Agreement (the “Non-Competition Agreement”) with Verizon, pursuant to which Verizon generally agreed not to, and to cause its affiliates not to, publish, market, sell or distribute tangible or digital media directory products in Verizon’s service areas or any of Idearc Media’s independent markets.

The Non-Competition Agreement restricts Verizon from competing with Idearc Media in the Internet yellow pages business for a period ending one year after the effective date of the agreement, but does not prohibit Verizon from competing with Idearc Media in the electronic delivery products business, including by competing with SuperPages.com (although Verizon is prohibited from using the SuperPages and Directories Corp. brands).

With respect to the Verizon service areas, the Non-Competition Agreement will remain in effect for 30 years from the date of the spin-off. With respect to each of Idearc Media’s current and certain prospective independent markets, the Non-Competition Agreement will remain in effect until the fifth anniversary of the date of the spin-off, except that it may be terminated earlier with respect to any independent market if Verizon becomes a local exchange carrier in the independent market subject to legal and contractual obligations to publish and distribute directories.

Branding Agreement

On November 17, 2006, Idearc Media entered into a Branding Agreement (the “Branding Agreement”) with Verizon Licensing Company (“Verizon Licensing”), pursuant to which Verizon Licensing granted Idearc Media a limited right to (1) for a limited time and on a non-exclusive basis, phase out Idearc Media’s use of certain Verizon marks in connection with the operation of Idearc Media’s business, (2) for the term of the Branding Agreement and on an exclusive basis, use certain Verizon marks in connection with publishing print directories in Verizon’s current wireline local exchange service areas and identify itself as Verizon’s official print directory publisher, (3) for the term of the branding agreement and on a non-exclusive basis, use certain Verizon marks in connection with publishing print directories in Idearc Media’s current independent

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markets, (4) for a period of time and on a non-exclusive basis, use certain Verizon marks in connection with publishing directories in certain geographic areas outside Verizon’s service areas and (5) for the term of the Branding Agreement and on a non-exclusive basis, use certain Verizon brands in connection with Idearc Media’s wireless yellow pages directories business.

Under the Branding Agreement, Idearc Media may grant sublicenses with respect to specified licenses to its subsidiaries, resellers, agents, distributors and dealers in connection with conduct in specified geographic areas. Idearc Media may not, however, grant any sublicense without Verizon Licensing’s prior written approval, and sublicensees must agree in writing to compliance with the terms of the Branding Agreement.

Under the Branding Agreement, Idearc Media is prohibited from including on prominent portions of its directory products, including the front or back cover or spines of its print directory products any advertising for, or any name or brand identified with, any provider of telecommunications services or video services other than Verizon, except as required by applicable laws and regulations.

Idearc Media may terminate the Branding Agreement at any time. Verizon Licensing may terminate the Branding Agreement with respect to any of Verizon’s service areas if Idearc Media fails to correct a deficiency in its use of any of the Verizon marks after Verizon Licensing has given notice of the deficiency. If Idearc Media or any of its subsidiaries directly or indirectly engages in the provision of telecommunication services or video services in any of Verizon’s service areas, Verizon Licensing may terminate the Branding Agreement with respect to the affected service area. If, however, an owner or an affiliate of Idearc Media is a provider of telecommunication services outside of Verizon’s service areas, Verizon Licensing may not terminate the Branding Agreement, so long as Idearc Media’s owner or affiliate does not provide telecommunication services in connection with Idearc Media’s directory products in any of Verizon’s service areas. If Verizon Licensing has terminated the Branding Agreement with respect to 20% or more of its subscribers in the service areas, it may then terminate the Branding Agreement in its entirety.

Unless otherwise terminated, the Branding Agreement will terminate upon the termination of the Publishing Agreement. If the Publishing Agreement is terminated with respect to some but not all of Verizon’s service areas, the Branding Agreement will automatically terminate with respect to these service areas. If Verizon disposes of any of its access lines, or if Verizon ceases operations as a local exchange carrier in a service area, the Branding Agreement will terminate with respect to the applicable Verizon service area or portion thereof.

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Listings License Agreement

On November 17, 2006, Idearc Media entered into a Listings License Agreement (the “Listings License Agreement”) with specified Verizon telephone operating companies (the “Verizon Telephone Companies”), pursuant to which the Verizon Telephone Companies granted Idearc Media a non-exclusive, non-transferable restricted license of subscriber listing information at prices set forth in the agreement. The Listings License Agreement is consistent with regulations promulgated by the Federal Communications Commission, which require that telephone companies license their subscriber listing information to publishers of directories. Pursuant to the Listings License Agreement, Idearc Media is entitled to use the listing information (other than information regarding non-listed subscribers) for publishing directories in any format, and for soliciting advertising and listings for these directories. Idearc Media is entitled to use the listing information (including the non-listed subscriber information) for purposes of distributing directories in any format.

The Listings License Agreement has an initial term of one year, subject to automatic renewal for additional one year terms until either the Verizon Telephone Companies or Idearc Media terminate the agreement. Idearc Media will pay the Verizon Telephone Companies approximately $2.5 million per year for services rendered pursuant to the Listings License Agreement.

Billing Services Agreement

On November 17, 2006, Idearc Media entered into a Billing Services Agreement (the “Billing Services Agreement”) with Verizon Services, pursuant to which Verizon Services will continue to bill and collect from customers that are not migrated to Idearc Media’s billing system. These remaining customers, who are also Verizon local telephone customers, consist primarily of smaller customers serviced by the Company’s telephone call center. Idearc Media will pay Verizon Services approximately $1.3 million for services rendered pursuant to the Billing Services Agreement.

Intellectual Property Agreement

On November 17, 2006, Idearc Media entered into an Intellectual Property Agreement (the “Intellectual Property Agreement”) with Verizon Services, pursuant to which Idearc Media has the right to use specified intellectual property owned or licensed by Verizon Services in the operation of its print and online directory business. The Intellectual Property Agreement governs Idearc Media’s relationship with Verizon with respect to patents, software, copyrights, know how and other proprietary information.

Under the Intellectual Property Agreement, Idearc Media granted to Verizon Services a royalty-free, fully paid-up, irrevocable, nonexclusive license under certain of its statutory intellectual property to make, use or sell products and services. Idearc Media

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also irrevocably assigned to Verizon Services all right, title and interest in and to its customer listing data. Verizon Services granted to Idearc Media a personal, royalty-free, fully paid-up, irrevocable, nonexclusive and nontransferable license to use, in the United States, intellectual property owned by Verizon Services, to the extent used in Idearc Media’s business as of the date of the Distribution. Idearc Media has the right to copy, reproduce and improve this intellectual property. In addition, Verizon Services irrevocably assigned to Idearc Media all right, title and interest of Verizon Services in and to specified statutory intellectual property.

Under the Intellectual Property Agreement, Verizon Services also agreed not to grant any licenses to use specified intellectual property to any person who competes directly with Verizon or Idearc Media. The Intellectual Property Agreement is terminable by Verizon Services only in the event of Idearc Media’s bankruptcy, or in an event of default by Idearc Media.

Employee Matters Agreement

On November 17, 2006, the Company entered into an Employee Matters Agreement (the “Employee Matters Agreement”) with Verizon which addresses the treatment of employees and former employees with respect to their participation in employee benefit plans as well as certain human resources matters relating to policies, programs, labor contracts and employee status. The Employee Matters Agreement also addresses the distribution of liabilities relating to employees and former employees under the employee benefit plans.

Under the Employee Matters Agreement, the Company’s workforce will generally participate in employee benefit plans sponsored by the Company, which will provide comparable benefits to those benefits provided to these employees before the Distribution. The Employee Matters Agreement also contains additional information relating to service recognition under the Company’s plans; recognition of co-pays, deductibles, and out of pocket maximums and the like under the Company’s welfare benefit plans; and the transfer of assets and liabilities from Verizon plans to Company plans.

Tax Sharing Agreement

On November 17, 2006, the Company entered into a Tax Sharing Agreement (the “Tax Sharing Agreement”) with Verizon. The Tax Sharing Agreement governs Verizon’s and the Company’s respective rights, responsibilities, and obligations with respect to tax liabilities and benefits for the periods prior to and subsequent to the spin-off, along with the preparation and filing of tax returns, the control of audits and other tax matters. The Tax Sharing Agreement requires the Company to indemnify Verizon and its affiliates against all tax-related liabilities caused by the spin-off failing to qualify for tax-free treatment for United States Federal income tax purposes, to the extent these

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liabilities arise as a result of any action taken by the Company or any of its affiliates following the spin-off or otherwise result from any breach of any representation, covenant or obligation of the Company or any of its affiliates under the Tax Sharing Agreement or any other agreement entered into in connection with the spin-off.

Though valid as between Verizon and the Company, the Tax Sharing Agreement is not binding on the IRS and does not affect the several liability of Verizon and the Company for all United States Federal income taxes of the consolidated group relating to periods prior to the spin-off.

Long-Term Incentive Plan

On November 16, 2006, the Human Resources Committee of the Company’s board of directors and Verizon, acting as the Company’s sole stockholder, approved the Company’s Long-Term Incentive Plan (the “LTIP”). The LTIP, which is similar to Verizon’s existing long-term incentive plan, is designed to (1) optimize the Company’s profitability and growth through long-term incentives that are consistent with the Company’s goals, and that link the interests of participants to those of the Company’s stockholders, (2) provide participants with an incentive for excellence in individual performance, (3) provide flexibility to help the Company motivate, attract, and retain the services of participants who make significant contributions to its success, and (4) allow participants to share in the Company’s success. All of the Company’s and its subsidiaries’ employees and non-employee directors are eligible to participate in the LTIP, which is administered by the Company’s Human Resources Committee.

Under the LTIP, the Human Resources Committee may grant various types of awards to employees, including:

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The Company is authorized to issue up to 2,500,000 shares of common stock, adjusted for certain capital changes, under the LTIP. Specified transactions, such as a payout in cash of an award originally awarded in shares, cancellation or forfeiture of shares subject to an award, or payment of an option price or tax withholding obligation with previously acquired shares, will restore the number of shares available under the LTIP. During the term of the LTIP, no more than 200,000 shares may be covered by awards made to any one participant in any calendar year, and no more than $5,000,000 may be earned by a participant under a performance based cash incentive award.

To protect rights of the participants, the LTIP provides that, in the event of a change in control of the Company, all stock options and stock appreciation rights awarded under the LTIP will become immediately exercisable, and any restriction periods on awards will lapse, with all awards payable in full.

Other

Copies of the Transition Services Agreement, the Publishing Agreement, the Non-Competition Agreement, the Branding Agreement, the Listings License Agreement, the Billing Services Agreement, the Intellectual Property Agreement, the Employee Matters Agreement, the Tax Sharing Agreement, and the LTIP are attached as Exhibits 10.1, 10.2, 10.3, 10.4, 10.5, 10.6, 10.7, 10.8, 10.9, and 10.10 to this Current Report on Form 8-K, respectively, and are incorporated herein by reference.