<PAGE>
Exhibit 4(b)
NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY
Seven Year 7.65% Notes due June 15, 2007
1. INDENTURE. (a) This Note is one of the duly authorized issue of debt
securities of the Company (herein referred to as the "Debt Securities") of the
series hereinafter specified, all issued or to be issued under and pursuant to
an indenture dated as of October 1, 1992 (herein referred to as the
"Indenture"), duly executed and delivered by the Company to State Street Bank
and Trust Company, as successor Trustee (herein referred to as the "Trustee"),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, limitations of rights, obligations, duties
and immunities thereunder of the Trustee, the Company and the holders (the words
"holders", "holder", "Securityholders" or "Securityholder" meaning the
registered holders or registered holder) of the Debt Securities.
(b) The Debt Securities may be issued in one or more series, which
different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest, if any, at different rates, may be
subject to different redemption provisions, if any, may be subject to different
sinking funds, if any, may be subject to additional covenants and Events of
Default and may otherwise vary as provided in the Indenture. This Note is one of
the series designated as the Seven Year 7.65% Notes due June 15, 2007 of the
Company and such series is limited in aggregate principal amount to
$125,000,000. References herein to "Notes" shall mean the Notes of said series.
(c) All capitalized terms used in this Note which are defined in the
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Indenture.
2. OPTIONAL REDEMPTION. The Notes will be redeemable, as a whole or in
part, at the option of the Company at any time or from time to time on at least
30 days' but not more than 90 days' prior notice mailed to the registered
address of each holder. The redemption prices will be equal to the greater of
(i) 100% of the principal amount of the Notes to be redeemed or (ii) the sum of
the present values of the Remaining Scheduled Payments (as defined below)
discounted on a semiannual basis (assuming a 360-day year consisting of twelve
30-day months) at a rate equal to the sum of the Treasury Rate and 15 basis
points. In the case of each of clause (i) and (ii), accrued interest will be
payable to the redemption date.
"Treasury Rate" means, with respect to any redemption date, the rate
per annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes that would be utilized, at the time of selection
and in accordance with customary financial practice, in pricing
<PAGE>
- 2 -
new issues of corporate debt securities of comparable maturity to the remaining
term of the Notes. "Independent Investment Banker" means one of the Reference
Treasury Dealers appointed by the Company.
"Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of the Reference Treasury Dealer Quotations for such redemption
date after excluding the highest and lowest of such Reference Treasury Dealer
Quotations or (ii) if the Trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of all such quotations. "Reference
Treasury Dealer Quotations" means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the Trustee, of
the bid and asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing to the Trustee
by such Reference Treasury Dealer at 3:30 p.m., New York City time, on the third
business day preceding such redemption date.
"Reference Treasury Dealer" means each of three primary U.S. Government
securities dealers appointed by the Trustee (each, a "Primary Treasury Dealer").
If any of the foregoing shall cease to be a Primary Treasury Dealer, the Company
shall substitute another nationally recognized investment banking firm that is a
Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to each Note to be
redeemed, the remaining scheduled payments of principal of and interest on such
Note that would be due after the related redemption date but for such
redemption. If such redemption date is not an interest payment date with respect
to such Note, the amount of the next succeeding scheduled interest payment on
such Note will be reduced by the amount of interest accrued on such Note to such
redemption date.
On and after the redemption date, interest will cease to accrue on the
Notes or any portion of the Notes called for redemption (unless the Company
defaults in the payment of the redemption price and accrued interest). On or
before the redemption date, the Company will deposit with the paying agent (or
the Trustee) money sufficient to pay the redemption price of and accrued
interest on the Notes to be redeemed on such date. If less than all of the Notes
are to be redeemed, the Notes to be redeemed shall be selected by the Trustee by
such method as the Trustee shall deem fair and appropriate.
3. MAINTENANCE OF BOOK-ENTRY SYSTEM. (a) If DTC notifies the Company
that it is unwilling or unable to continue as the Depository for this Global
Note or if at any time DTC ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, and, in each case, the Company does
not appoint a successor clearing system within 90 days after receiving such
notice from DTC or on becoming aware that DTC is no longer so registered, the
Company will issue or cause to be issued individual certificates in registered
form on registration of or transfer of, or in exchange for, book-entry interests
in the Notes represented by this Global Note upon delivery of this Global Note
for cancellation. In addition, if the Company determines not to have the Notes
represented by a Global Note, which the Company may do, the Company will issue
or cause to be issued individual certificates in registered form in exchange for
book-entry interests in the Notes represented by this Global Note upon delivery
of this Global Note for cancellation.
<PAGE>
- 3 -
(b) The Company hereby agrees with the Trustee and the holders of Notes
that at all times, notwithstanding any provision to the contrary set forth in
the Indenture, (i) it will use its best efforts to maintain the Notes in
book-entry form with DTC or any successor thereto and to appoint a successor
depository to the extent necessary to maintain the Notes in book-entry form and
(ii) it will waive any discretionary right that it otherwise may have under the
Indenture to cause the Notes to be issued in certificated form.
4. EFFECT OF EVENT OF DEFAULT. In the event that an Event of Default
shall have occurred and be continuing, the principal hereof may be declared, and
upon such declaration shall become, due and payable, in the manner, with the
effect and subject to the conditions provided in the Indenture.
5. AMENDMENTS AND WAIVERS. The Indenture contains provisions permitting
the Company and the Trustee, with the written consent of the holders of a
majority in principal amount of the outstanding Debt Securities of each series
affected by a supplemental indenture (with each series voting as a class), to
enter into a supplemental indenture to add any provisions to or to change or
eliminate any provisions of the Indenture or of any supplemental indenture or to
modify, in each case in any manner not covered by provisions in the Indenture
relating to amendments and waivers without the consent of holders, the rights of
the Securityholders of each such series. The holders of a majority in principal
amount of the outstanding Debt Securities of each series affected by such waiver
(with each series voting as a class), by notice to the Trustee, may waive
compliance by the Company with any provision of the Indenture, any supplemental
indenture or the Debt Securities of any such series except a default in the
payment of the principal of or interest on any Debt Security. However, without
the consent of each Securityholder affected, an amendment or waiver may not: (1)
reduce the amount of Debt Securities whose holders must consent to an amendment
or waiver; (2) change the rate of or change the time for payment of interest on
any Debt Security; (3) change the principal of or change the fixed maturity of
any Debt Security; (4) waive a default in the payment of the principal of or
interest on any Debt Security; (5) make any Debt Security payable in money other
than that stated in the Debt Security; or (6) make any change in the provisions
of the Indenture (a) with respect to the right of the holders of a majority in
principal amount of any series of Debt Securities by notice to the Trustee to
waive an existing default with respect to that series and its consequences
except a default in the payment of the principal of or interest on any Debt
Security; (b) with respect to the right of any holder of a Debt Security to
receive payment of principal and interest on the Debt Security, on or after the
respective due dates expressed in the Debt Security, the right of any holder of
a coupon to receive payment of interest due as provided in such coupon, or to
bring suit for the enforcement of any such payment on or after such respective
dates; and (c) contained in this sentence.
6. DENOMINATIONS, TRANSFER AND EXCHANGE. (a) The Notes are issuable in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof.
(b) Where certificated Notes are presented to the registrar with a
request to register their transfer or to exchange them for an equal principal
amount of Notes of other authorized denominations, the registrar shall register
the transfer or make the exchange if its requirements for such transactions are
met. The Company will not make any charge for any registration of transfer or
exchange but may require the
<PAGE>
- 4 -
payment by the party requesting such registration of transfer or exchange of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
(c) Ownership of Notes shall be proved by the register for the Notes
kept by the registrar. The Company, the Trustee and any agent of the Company may
treat the person in whose name a Note is registered as the absolute owner
thereof for all purposes.
7. NO LIABILITY OF CERTAIN PERSONS. No director, officer, employee or
shareholder, as such, of the Company shall have any liability for any
obligations of the Company under this Note or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. Each
holder by accepting this Note waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Note.
8. GOVERNING LAW. The laws of the State of New York shall govern the
Indenture and this Note.
<PAGE>
--------------------------------------------------------------------------------
THE FOLLOWING ABBREVIATIONS SHALL BE CONSTRUED AS THOUGH THE WORDS SET
FORTH BELOW OPPOSITE EACH ABBREVIATION WERE WRITTEN OUT IN FULL WHERE
SUCH ABBREVIATION APPEARS:
TEN COM--as tenants in common
TEN ENT--as tenants by the entirety
JT TEN --as joint tenants with
right of survivorship
and not as tenants in common
(Name) CUST (Name) UNIF--(Name) as Custodian
GIFT MIN ACT (state) for (Name) Under the (State)
Uniform Gifts
to Minors Act
ADDITIONAL ABBREVIATIONS MAY ALSO BE USED THOUGH NOT IN THE ABOVE LIST.
--------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT TAXPAYER
IDENTIFICATION NUMBER OF ASSIGNEE
-----------------------------------------
-----------------------------------------
--------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF ASSIGNEE
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
the within Note of New England Telephone and Telegraph Company and all rights
thereunder and hereby irrevocably constitutes and appoints _____________________
attorney to transfer said Note on the books of the Company, with full power of
substitution in the premises
Dated: ___________________________________
Signature
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE WITHIN INSTRUMENT IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER. THE
SIGNATURE(S) SHOULD BE GUARANTEED BY A COMMERCIAL BANK OR TRUST
COMPANY, A MEMBER ORGANIZATION OF A NATIONAL STOCK EXCHANGE OR BY SUCH
OTHER ENTITY WHOSE SIGNATURE IS ON FILE WITH AND ACCEPTABLE TO THE
TRANSFER AGENT.
