<PAGE> PAGE 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 16, 1995
(January 26, 1995)
MCI COMMUNICATIONS CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 0-6457 52-0886267
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
1801 Pennsylvania Avenue, N.W., Washington, D.C. 20006
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(Address of Principal Executive Offices)
Registrant's telephone number, including area code (202) 872-1600
<PAGE> PAGE 2
MCI COMMUNICATIONS CORPORATION
FORM 8-K
Item 7. Financial Statements and Exhibits
Exhibit No. Description
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1(a) Form of Distribution Agreement.
99(a) Fourth Quarter and Full Year 1994 Earnings Release dated
January 26, 1995, Income Statements for the three and
twelve months ended December 31, 1994 and 1993,
Attachment A, Balance Sheets at December 31, 1994 and
1993.
<PAGE> PAGE 3
SIGNATURE
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Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto
duly authorized.
MCI COMMUNICATIONS CORPORATION
Date: February 16, 1995 Signed: BRADLEY E. SPARKS
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Bradley E. Sparks
Vice President
and Controller
<PAGE> PAGE 4
MCI COMMUNICATIONS CORPORATION
FORM 8-K
EXHIBIT INDEX
Exhibit No. Description
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1(a) Form of Distribution Agreement.
99(a) Fourth Quarter and Full Year 1994 Earnings Release dated
January 26, 1995, Income Statements for the three and
twelve months ended December 31, 1994 and 1993,
Attachment A, Balance Sheets at December 31, 1994 and
1993.
<PAGE> Exhibit 1(a)
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MCI COMMUNICATIONS CORPORATION
Senior and/or Subordinated Medium-Term Notes Due
9 Months or more from Date of Issue
DISTRIBUTION AGREEMENT
February 17, 1995
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
World Financial Center
North Tower - 10th Floor
New York, New York 10281-1310
CITICORP SECURITIES, INC.
399 Park Avenue - 7th Floor
New York, New York 10043
GOLDMAN, SACHS & CO.
85 Broad Street
New York, New York 10004
LEHMAN BROTHERS
Lehman Brothers Inc.
3 World Financial Center - 12th Floor
New York, New York 10285-1200
SALOMON BROTHERS INC
Seven World Trade Center
New York, New York 10048
Dear Sirs:
MCI Communications Corporation, a Delaware corporation (the
"Company"), confirms its agreement with Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citicorp
Securities, Inc., Goldman, Sachs & Co., Lehman Brothers, Lehman
Brothers Inc. (including its affiliate Lehman Government
Securities Inc.) and Salomon Brothers Inc (each, an "Agent", and
collectively, the "Agents") with respect to the issue and sale by
the Company of its Senior Medium-Term Notes (the "Senior Notes")
and Subordinated Medium-Term Notes (the "Subordinated Notes", and
collectively with the Senior Notes, the "Notes"). The Senior
Notes are to be issued pursuant to an indenture, dated as of
<PAGE> Exhibit 1(a)
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February 17, 1995 (the "Senior Indenture"), between the Company
and Citibank, N.A., as trustee (the "Senior Trustee"). The
Subordinated Notes are to be issued pursuant to an indenture,
dated as of October 15, 1989 (the "Subordinated Indenture", and
collectively with the Senior Indenture, the "Indentures"),
between the Company and Bankers Trust Company, as trustee (the
"Subordinated Trustee", and collectively with the Senior Trustee,
the "Trustees"). As of the date hereof, $1,502,000,000 aggregate
principal amount of Senior Notes and no Subordinated Notes are
outstanding, and the Company has made available for issuance up
to an additional U.S. $1,000,000,000 aggregate principal amount
(or its equivalent, based upon the applicable exchange rate at
the time of issuance, in such foreign currency or currency unit
as the Company shall designate at the time of issuance) of Notes
through or to the Agents pursuant to the terms of this Agreement.
It is understood, however, that the Company may from time to time
authorize the issuance of additional Notes and that such Notes
may be distributed through or sold to the Agents pursuant to the
terms of this Agreement, all as though the issuance of such Notes
were authorized as of the date hereof.
This Agreement provide for the sale of Notes through the
Agents acting as agents of the Company in soliciting purchases of
the Notes, or (as may from time to time be agreed to by the
Company and one or more Agents) to such Agent or Agents as prin-
cipal for resale to investors and other purchasers.
Subject to (a) the terms and conditions stated herein and
(b) the reservation by the Company of the right to sell Notes
directly to investors on its own behalf in those jurisdictions
where it is authorized to do so and to appoint, upon 30 days'
prior written notice to the Agents, additional persons to serve
as Agents hereunder (provided that each such additional person
agrees to be bound by all of the terms and conditions of this
Agreement (including the schedule of commissions set forth in
Schedule A hereto)), the Company hereby (i) appoints the Agents
as the exclusive agents of the Company for the purpose of
soliciting purchases of the Notes from the Company by others and
(ii) agrees that whenever the Company determines to sell Notes
directly to one or more of the Agents as principal for resale to
others, it will enter into a Terms Agreement (as hereafter
defined) relating to such sale in accordance with the provisions
of Section 2(b) hereof. Each Agent will make reasonable efforts
to assist the Company in obtaining performance by each purchaser
whose offer to purchase Notes from the Company has been solicited
by such Agent as agent and accepted by the Company, but such
Agent shall not have any liability to the Company in the event
any such purchase is not consummated for any reason.
<PAGE> Exhibit 1(a)
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The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on
Form S-3 (No. 33-57155) for the registration of debt securities,
including the Notes, and common stock, par value $0.10 per share,
under the Securities Act of 1933, as amended (the "1933 Act"),
and the offering thereof from time to time in accordance with
Rule 415 of the rules and regulations of the Commission under the
1933 Act (the "1933 Act Regulations"). Such registration
statement has been declared effective by the Commission and the
Indentures have been qualified under the Trust Indenture Act of
1939, as amended (the "1939 Act"). Such registration statement
(and any further registration statements which may be filed by
the Company for the purpose of registering additional debt
securities and in connection with which this Agreement is
included as an exhibit) and the prospectus constituting a part
thereof, and any prospectus supplement relating to the Notes,
including all documents incorporated therein by reference, as
from time to time amended or supplemented by the filing of
documents pursuant to the Securities Exchange Act of 1934, as
amended (the "1934 Act"), the 1933 Act or otherwise, are referred
to herein as the "Registration Statement" and the "Prospectus",
respectively, except that if any revised prospectus shall be
provided to the Agents by the Company for use in connection with
the offering of the Notes which is not required to be filed by
the Company pursuant to Rule 424(b) of the 1933 Act Regulations,
the term "Prospectus" shall refer to such revised prospectus from
and after the time it is first provided to each Agent for such
use.
The Company may accept offers to purchase Notes through or
from a person other than an Agent, provided that (i) the Company
shall not have solicited such offers, (ii) the Company and such
person shall have executed an agreement with respect to such
purchases having the same terms and conditions (including,
without limitation, commission and discount rates) with respect
to such purchases as the terms and conditions that would apply to
such purchases under this Agreement if such person were an Agent
hereunder (which may be accomplished by incorporating by
reference in such agreement the terms and conditions of this
Agreement) and (iii) the Company shall notify the Agents prior to
the execution of any such agreement and shall provide the Agents
with a copy of such agreement promptly following the execution
thereof.
SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to each of the
Agents as of the date hereof, as of the date of each acceptance
by the Company of an offer for the purchase of Notes (whether
<PAGE> Exhibit 1(a)
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through an Agent as agent or to an Agent as principal), as of the
date of each delivery of Notes (whether through an Agent as agent
or to an Agent as principal) (the date of each such delivery to
an Agent as principal being hereafter referred to as a "Settle-
ment Date"), and as of the times referred to in Section 6(a)
hereof (each of the times referenced above being referred to
hereafter as a "Representation Date"), as follows:
(i) Due Incorporation and Qualification. The Company
has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of
its incorporation with corporate power and authority to own,
lease and operate its properties and to conduct its business
as described in the Prospectus; and the Company is duly
qualified as a foreign corporation to transact business and
is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the owner-
ship or leasing of property or the conduct of business,
except where the failure to so qualify would not have a
material adverse effect on the condition, financial or
otherwise, or the earnings or business affairs of the
Company and its subsidiaries considered as one enterprise.
(ii) Subsidiaries. Each subsidiary of the Company
which is a significant subsidiary, as defined in Rule 405 of
Regulation C of the 1933 Act Regulations (each, a
"Significant Subsidiary"), has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus,
and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in
which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of busi-
ness, except where the failure to so qualify would not have
a material adverse effect on the condition, financial or
otherwise, or the earnings or business affairs of the
Company and its subsidiaries considered as one enterprise;
and all of the issued and outstanding capital stock of each
Significant Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and all such shares
owned by the Company, directly or through subsidiaries, are
owned free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or security (except for any
lien or encumbrance permitted pursuant to Article VI of the
Revolving Credit Agreement, dated as of June 8, 1994, among
the Company and Bank of America National Trust and Savings
Association, as agent for the financial institutions party
thereto, Articles X and XII of the Senior Indenture,
<PAGE> Exhibit 1(a)
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Article X of the Subordinated Indenture and Article XIII of the
Indenture, dated as of October 15, 1989, between the Company and
Bankers Trust Company, as trustee).
(iii) Registration Statement and Prospectus. At the
time the Registration Statement became effective, the Regis-
tration Statement complied, and as of the applicable Repre-
sentation Date will comply, in all material respects with
the requirements of the 1933 Act and the 1933 Act Regula-
tions and the 1939 Act and the rules and regulations of the
Commission promulgated thereunder. The Registration State-
ment, at the time it became effective, did not, and at each
time thereafter at which any amendment to the Registration
Statement becomes effective and any Annual Report on Form
10-K is filed by the Company with the Commission and as of
the applicable Representation Date will not, contain an
untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading; and the
Prospectus, as of the date hereof, does not, and as of the
applicable Representation Date will not, include an untrue
statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made,
not misleading; provided, however, that the representations
and warranties in this subsection shall not apply to state-
ments in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing jointly by
the Agents expressly for use in the Registration Statement
or the Prospectus or to that part of the Registration
Statement which constitute the Statements of Eligibility of
the Trustees on Form T-1.
(iv) Incorporated Documents. The documents incorpo-
rated by reference in the Prospectus, at the time they were
or hereafter are filed with the Commission, complied and
will comply, as the case may be, in all material respects
with the requirements of the 1934 Act and the rules and
regulations promulgated thereunder (the "1934 Act
Regulations"), and, when read together and with the other
information in the Prospectus, did not and will not, as the
case may be, include an untrue statement of a material fact
or omit to state a material fact required to be stated
therein or necessary in order to make the statements there-
in, in light of the circumstances under which they were or
are made, not misleading.
(v) Accountants. The accountants who certified the
financial statements included or incorporated by reference
<PAGE> Exhibit 1(a)
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in the Prospectus are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(vi) Financial Statements. The financial statements of
the Company and its consolidated subsidiaries included or
incorporated by reference in the Registration Statement and
the Prospectus present fairly the consolidated financial
position of the Company and its consolidated subsidiaries as
of the dates indicated and the consolidated results of their
operations for the periods specified; and, except as stated
therein, said financial statements have been prepared in
conformity with generally accepted accounting principles in
the United States applied on a consistent basis.
(vii) Material Changes. Since the respective dates as
of which information is given in the Registration Statement
and the Prospectus, except as otherwise stated therein or
contemplated thereby, there has been no material adverse
change in the condition, financial or otherwise, or in the
earnings or business affairs of the Company and its subsidi-
aries considered as one enterprise, whether or not arising
in the ordinary course of business.
(viii) No Defaults. Neither the Company nor any of its
subsidiaries is in violation of its charter or in default in
the performance or observance of any material obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument to which it is a party or by which it or any of
them or their properties is bound, except where such viola-
tion or default would not have a material adverse effect on
the condition, financial or otherwise, or the earnings or
business affairs of the Company and its subsidiaries con-
sidered as one enterprise; and the execution and delivery of
this Agreement and the Indentures and the consummation of
the transactions contemplated herein and therein have been
duly authorized by all necessary corporate action and do not
conflict with or constitute a breach of, or default under,
or result in the creation or imposition or violation of any
lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to, (A) the
charter or by-laws of the Company, (B) any law, administra-
tive regulation or administrative or court order or decree
applicable to the Company, or (C) any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to
which the Company or any such subsidiary is a party or by
which it or any of them is bound or to which any of the
property or assets of the Company or any such subsidiary is
subject where, in the case of clause (c), such conflict,
breach or default, or lien, charge or encumbrance, would
<PAGE> Exhibit 1(a)
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have a material adverse effect on the condition, financial
or otherwise, or the earnings or business affairs of the
Company and its subsidiaries considered as one enterprise.
(ix) Legal Proceedings; Contracts. Except as included
or incorporated by reference in the Prospectus, there is no
action, suit or proceeding before or by any court or govern-
mental agency or body, domestic or foreign, now pending, or,
to the knowledge of the Company, threatened against or
affecting the Company or any of its subsidiaries, which
might, in the opinion of the Company, result in any material
adverse change in the condition, financial or otherwise, or
in the earnings or business affairs of the Company and its
subsidiaries considered as one enterprise, or might materi-
ally and adversely affect the properties or assets thereof
or might materially and adversely affect the consummation of
the transactions contemplated by this Agreement or the
Indentures; and there are no contracts or documents of the
Company or any of its subsidiaries which are required to be
filed as exhibits to the Registration Statement by the 1933
Act or by the 1933 Act Regulations which have not been so
filed or incorporated by reference as exhibits thereto.
(x) No Authorization, Approval or Consent Required.
No authorization, approval, consent, order or decree of any
court or governmental authority or agency is necessary in
connection with the sale by the Company of the Notes, except
those which have been previously obtained.
(xi) Regulatory Certificates, Authorities and Permits.
The Company and its subsidiaries possess such certificates,
authorities or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary
to conduct the business now operated by them, except where
the failure to possess such certificates, authorities or
permits would not have a material adverse effect on the
condition, financial or otherwise, or the earnings or busi-
ness affairs of the Company and its subsidiaries considered
as one enterprise; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating
to the revocation or modification of any such certificate,
authority or permit which, singly or in the aggregate, if
the subject of an unfavorable decision, ruling or finding,
would materially and adversely affect the condition, finan-
cial or otherwise, or the earnings or business affairs of
the Company and its subsidiaries considered as one enter-
prise.
<PAGE> Exhibit 1(a)
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(xii) Authorization and Validity of Indentures. Each of
the Indentures has been duly and validly authorized, exe-
cuted and delivered by the Company and (assuming each of the
Indentures has been duly authorized, executed and delivered
by the applicable Trustee) constitutes a valid and binding
agreement of the Company, enforceable against it in accor-
dance with its terms, except in each case that enforcement
thereof may be limited by bankruptcy, insolvency, reorgani-
zation, moratorium or other laws affecting creditors' rights
generally and by general principles of equity, and except
further as enforcement thereof may be limited by (A) re-
quirements that a claim with respect to any Note denominated
other than in U.S. dollars (or a foreign currency or foreign
currency unit judgment in respect of such claim) be
converted into U.S. dollars at a rate of exchange prevailing
on a date determined pursuant to applicable law or (B) any
statute, law, judgment, decree, order, regulation or rule of
any court or governmental authority that limits, delays, or
prohibits the making of payments in a foreign currency or
currency unit or payments outside the United States.
(xiii) Authorization and Validity of the Notes. The
Notes have been duly authorized for issuance and sale pur-
suant to this Agreement and, when issued, authenticated and
delivered pursuant to the provisions of this Agreement and
the applicable Indenture against payment of the considera-
tion therefor specified pursuant to this Agreement, the
Notes will constitute valid and binding obligations of the
Company, enforceable against it in accordance with their
terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other similar laws affecting
creditors' rights generally or by general principles of
equity, and except further as enforcement thereof may be
limited by (A) requirements that a claim with respect to any
Note denominated other than in U.S. dollars (or a foreign
currency or currency unit judgment in respect of such claim)
be converted into U.S. dollars at a rate of exchange
prevailing on a date determined pursuant to applicable law
or (B) any statute, law, judgment, decree, order, regulation
or rule of any court or governmental authority that limits,
delays or prohibits the making of payments in a foreign
currency or currency unit or payments outside the United
States; the Notes will be substantially in the forms
heretofore delivered to the Agents, and the Notes and the
applicable Indenture conform in all material respects to all
statements relating thereto contained in the Prospectus; and
the Notes will be entitled to the benefits provided by the
applicable Indenture.
<PAGE> Exhibit 1(a)
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(xiv) Authorization of this Agreement. This Agreement
has been duly authorized, executed and delivered by the
Company.
(xv) Doing Business with Cuba. The Company has com-
plied, and as of each Representation Date will comply, with
all of the provisions of Section 517.075 of the Florida
Statutes, and all rules and regulations promulgated there-
under, relating to issuers doing business in Cuba.
(b) Additional Certification. Any certificate signed by
any officer of the Company and delivered to the Agents or to
counsel for the Agents in connection with an offering of Notes
shall be deemed a representation and warranty by the Company to
the Agents or the applicable Agent or Agents, as the case may be,
as to the matters covered thereby as of the date of such
certificate and, except as otherwise may be provided in such
certificate, at each Representation Date subsequent thereto.
SECTION 2. Solicitations as Agent; Purchases as Principal.
(a) Solicitations as Agent. On the basis of the represen-
tations and warranties contained herein, and subject to the terms
and conditions set forth herein, each of the Agents agrees, as an
agent of the Company, to use its best efforts to solicit offers
to purchase the Notes upon the terms and conditions set forth
herein and in the Prospectus. The Agents are not authorized to
appoint sub-agents in connection with such solicitations.
The Company reserves the right, in it sole discretion, to
suspend solicitation of purchases of the Notes through the
Agents, as agents, commencing at any time for any period of time
or permanently. Upon receipt of instructions from the Company,
the Agents will forthwith suspend solicitation of purchases on
behalf of the Company until such time as the Company has advised
the Agents that such solicitation may be resumed. The Agents
acknowledge that the Company reserves the right to sell Notes
directly to investors on it own behalf and, in the case of any
such sale not resulting from a solicitation made by any Agent, no
commission will be payable to any Agent with respect to such
sale.
The Company agrees to pay each Agent a commission, in the
form of a discount, equal to the applicable percentage of the
principal amount of each Senior Note or Subordinated Note, as the
case may be, sold by the Company as a result of a solicitation
made by such Agent as set forth in Schedule A hereto.
Commissions with respect to Notes sold through an Agent having
maturities in excess of 30 years shall be agreed upon by the
<PAGE> Exhibit 1(a)
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Company and such Agent at the time of the related sale. All
Notes through an Agent as agent will be sold at 100% of their
principal amount unless otherwise agreed to by the Company and
the applicable Agent.
As agent, each Agent is authorized to solicit offers to
purchase the Notes. Each Agent shall communicate to the Company,
orally or in writing, each reasonable offer to purchase Notes
received by such Agent as agent. Each Agent shall have the
right, in its discretion reasonably exercised, to reject any
offer to purchase Notes received by such Agent which it does not
deem reasonable, and any such rejection shall not be deemed a
breach of such Agent's agreement contained herein. The Company
shall have the sole right to accept offers to purchase Notes and
may reject any such offer in whole or in part.
(b) Purchases as Principal. Each sale of Notes to one or
more Agents as principal shall be made in accordance with the
terms contained herein and pursuant to a separate agreement which
will provide for the sale of such Notes to, and the purchase and
reoffering thereof by, such Agent or Agents. Each such separate
agreement (which may be an oral agreement between the applicable
Agent or Agents and the Company confirmed in writing, which may
be by facsimile transmission) is herein referred to as a "Terms
Agreement". Unless the context otherwise requires, each
reference contained herein to "this Agreement" shall be deemed to
include any applicable Terms Agreement. Each such Terms Agree-
ment, whether oral (and confirmed in writing, which may be by
facsimile transmission) or in writing, shall be with respect to
such information (as applicable) as is specified in Exhibit A
hereto. Each Agent's commitment to purchase Notes pursuant to
any applicable Terms Agreement shall be deemed to have been made
on the basis of the representations and warranties of the Company
contained herein and shall be subject to the terms and conditions
set forth herein. Each Terms Agreement shall specify the princi-
pal amount of Notes to be purchased by the applicable Agent or
Agents pursuant thereto, the price to be paid to the Company for
such Notes (which, if not as specified in such Terms Agreement,
shall be at a discount equivalent to the applicable commission
set forth in Schedule A hereto), the time and place of delivery
of and payment for such Notes, any provisions relating to a
default by one or more applicable Agents and such other provi-
sions (including further terms of the Notes) as may be mutually
agreed upon. The applicable Agent or Agents may utilize a
selling or dealer group in connection with the resale of the
Notes purchased as principal. The applicable Terms Agreement
shall also specify the requirements for the officers' certifi-
cates, opinions of counsel, comfort letter and stand-off
agreement pursuant to Sections 6(a), 6(b), 6(c) and 3(j) hereof.
<PAGE> Exhibit 1(a)
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(c) Administrative Procedures. The purchase price,
interest rate or formula, stated maturity date and other terms of
the Notes shall be agreed upon by the Company and the applicable
Agent or Agents at the time of pricing such Notes. Except as may
be otherwise agreed, the Notes will be issued in denominations of
U.S. $1,000 or integral multiples thereof. Administrative proce-
dures with respect to the sale of the Notes shall be agreed upon
from time to time by the Company, the Agents and the Trustees
(the "Administrative Procedures"). The Company and the Agents
agree, and the Company agrees to cause each of the Trustees to
agree, to perform the respective duties and obligations specifi-
cally provided to be performed by them herein and in the
Administrative Procedures, as applicable.
SECTION 3. Covenants of the Company.
The Company covenants with each Agent as follows:
(a) Notice of the Certain Events. The Company will notify
each Agent immediately of (i) the effectiveness of any amendment
to the Registration Statement, (ii) the transmittal to the
Commission for filing of any supplement to the Prospectus or any
document to be filed pursuant to the 1934 Act which will be
incorporated by reference in the Prospectus, (iii) the receipt of
any comments from the Commission with respect to the Registration
Statement or the Prospectus, (iv) any request by the Commission
for any amendment to the Registration Statement or any amendment
or supplement to the Prospectus or for additional information,
and (v) the issuance by the Commission of any stop order suspend-
ing the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose. The Company will
make every reasonable effort to prevent the issuance of any stop
order and, if any stop order is issued, to obtain the lifting
thereof at the earliest possible moment.
(b) Notice of Certain Proposed Filings. The Company will
give each Agent notice of its intention to file or prepare any
additional registration statement with respect to the registra-
tion of additional Notes, any amendment to the Registration
Statement or any amendment or supplement to the Prospectus (other
than a Pricing Supplement (as hereafter defined) relating solely
to the establishment of the specific terms of Notes sold through
or to another Agent), whether by the filing of documents pursuant
to the 1934 Act, the 1933 Act or otherwise, and will furnish each
Agent with copies of any such amendment or supplement or other
documents proposed to be filed or prepared a reasonable time in
advance of such proposed filing or preparation, as the case may
be, and will not file or use any such amendment, supplement or
other document to which the Agents shall reasonably object.
<PAGE> Exhibit 1(a)
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(c) Copies of the Registration Statement and the
Prospectus. The Company will deliver to each Agent one signed
and as many conformed copies of the Registration Statement (as
originally filed) and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and
documents incorporated by reference in the Prospectus) as such
Agent may reasonably request. The Company will furnish to each
Agent as many copies of the Prospectus (as amended or supple-
mented) as such Agent shall reasonably request so long as such
Agent is required to deliver a Prospectus in connection with
sales or solicitations of offers to purchase the Notes.
(d) Revisions of Prospectus -- Material Changes. Except as
otherwise provided in subsection (k) of this Section 3, if any
event shall occur or condition exist as result of which it is
necessary, in the reasonable opinion of counsel for the Agents or
counsel for the Company, to further amend or supplement the
Prospectus in order that the Prospectus will not include an
untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances existing at the time it is delivered
to a purchaser, not misleading or if it shall be necessary, in
the opinion of either such counsel, to amend or supplement the
Registration Statement or the Prospectus in order to comply with
the requirements of the 1933 Act or the 1933 Act Regulations,
then, after receipt by he Company of any such opinion, immediate
notice shall be given, and confirmed in writing, to each Agent to
cease the solicitation of offers to purchase the Notes in the
capacity as agent and to cease sales of any Notes the Agents may
then own as principal, and the Company will promptly prepare and
file with the Commission such amendment or supplement, whether by
filing documents pursuant to the 1934 Act, the 1933 Act or other-
wise, as may be necessary to correct such untrue statement or
omission or to make the Registration Statement and the Prospectus
comply with such requirements.
(e) Prospectus Revisions -- Periodic Financial Information.
Except as otherwise provided in subsection (k) of this Section 3,
on or prior to the date on which there shall be released to the
general public interim financial statement information related to
the Company with respect to each of the first three quarters of
any fiscal year or preliminary financial statement information
with respect to any fiscal year, the Company shall furnish such
information to each Agent, confirmed in writing, and promptly
after such release shall cause the Prospectus to be amended or
supplemented to include or incorporate by reference capsule
financial information with respect thereto and corresponding
information for the comparable period of the preceding fiscal
year, as well as such other information and explanations as shall
<PAGE> Exhibit 1(a)
------------
(13 of 38)
be necessary for an understanding thereof or as shall be required
by the 1933 Act or the 1933 Act Regulations.
(f) Prospectus Revisions -- Audited Financial Information.
Except as otherwise provided in subsection (k) of this Section 3,
on or prior to the date on which there shall be released to the
general public financial information included in or derived from
the audited financial statements of the Company for the preceding
fiscal year, the Company shall cause the Registration Statement
and the Prospectus to be amended, whether by the filing of docu-
ments pursuant to the 1934 Act, the 1933 Act or otherwise, to
include or incorporate by reference such audited financial state-
ments and the report or reports, and consent or consents to such
inclusion or incorporation by reference, of the independent
accountants with respect thereto, as well as such other informa-
tion as shall be required by the 1933 Act or the 1933 Act
Regulations.
(g) Earnings Statements. The Company will make generally
available to its security holders as soon as practicable, but not
later than 90 days after the close of the period covered thereby,
an earnings statement (in form complying with the provisions of
Rule 158 under the 1933 Act) covering each twelve month period
beginning, in each case, not later than the first day of the
Company's fiscal quarter next following the "effective date" (as
defined in such Rule 158) of the Registration Statement with
respect to each sale of Notes.
(h) Blue Sky Qualifications. The Company will endeavor, in
cooperation with the Agents, to qualify the Notes for offering
and sale under the applicable securities laws of such states and
other jurisdictions of the United States as the Agents may desig-
nate, and will maintain such qualifications in effect for as long
as may be required for the distribution of the Notes; provided,
however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified.
The Company will file such statements and reports as may be
required by the laws of each jurisdiction in which the Notes have
been qualified as provided above. The Company will promptly
advise the Agents of the receipt by the Company of any notifi-
cation with respect to the suspension of the qualification of the
Notes for sale in any such state or jurisdiction or the initia-
ting or the threatening of any proceeding for such purpose.
(i) 1934 Act Filings. The Company, during the period when
the Prospectus is required to be delivered under the 1933 Act,
will file all documents required to be filed with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act on
or before the time such documents are required to be filed.
<PAGE> Exhibit 1(a)
------------
(14 of 38)
(j) Stand-Off Agreement. If required pursuant to the terms
of a Terms Agreement, between the date of any Terms Agreement and
the Settlement Date with respect to such Terms Agreement, the
Company will not, without the prior written consent of the
applicable Agent or Agents, as the case may be, offer or sell, or
enter into any agreement to sell, any debt securities of the
Company (other than the Notes that are to be sold pursuant to
such Terms Agreement, commercial paper in the ordinary course of
business and borrowings under the Company's revolving credit
facilities).
(k) Suspension of Certain Obligations. The Company shall
not be required to comply with the provisions of subsections (d),
(e) or (f) of this Section 3 during any period from the time (i)
the Agents shall have suspended solicitation of purchases of the
Notes in their capacity as agents pursuant to a request from the
Company and (ii) the Agents shall not then hold any Notes
purchased as principal, to the time the Company shall determine
that solicitation of purchases of the Notes should be resumed or
shall subsequently enter into a Terms Agreement with one or more
of the Agents.
(l) Preparation of Pricing Supplements. The Company shall
prepare, with respect to any Notes sold through or to an Agent
pursuant to this Agreement, a supplement to the Prospectus (each,
a "Pricing Supplement"), in a form previously approved by the
Agents, and will file such Pricing Supplement pursuant to Rule
424(b)(3) under the 1933 Act not later than the close of business
of the Commission on the fifth business day after the date on
which such Pricing Supplement is first used.
SECTION 4. Payment of Expenses.
Except as may otherwise be provided in a Terms Agreement,
the Company will pay all expenses incident to the performance of
its obligations under this Agreement, including:
(a) The preparation and filing of the Registration
Statement and all amendments thereto and the Prospectus and
any amendments or supplements thereto;
(b) The preparation, filing and reproduction of this
Agreement;
(c) The preparation, printing, issuance and delivery
of the Notes, including any fees and expenses relating to
the issuance of Notes in book-entry form;
<PAGE> Exhibit 1(a)
------------
(15 of 38)
(d) The fees and disbursements of the Company's
accountants and counsel, of the Trustees and their counsel,
and of any calculation agent or exchange rate agent;
(e) The reasonable fees and disbursements of counsel
to the Agents incurred from time to time in connection with
the transactions contemplated hereby;
(f) The qualification of the Notes under securities
laws in accordance with the provisions of Section 3(h),
including the reasonable fees and disbursements of counsel
to the Agents in connection therewith and in connection with
the preparation of any Blue Sky Survey and any Legal
Investment Survey up to a maximum of $10,000 in the
aggregate and filing fees;
(g) The printing and delivery to each Agent in quanti-
ties as hereinabove stated of copies of the Registration
Statement and any amendment thereto, and of the Prospectus
and any amendments or supplements thereto, and the delivery
by an Agent of the Prospectus and any amendments or supple-
ments thereto in connection with solicitations or confirma-
tions of sales of Notes;
(h) The preparation, reproduction and delivery to each
Agent of copies of the Indentures;
(i) Any fees charged by rating agencies for the rating
of the Notes;
(j) The fees and expenses, if any, incurred with
respect to any filing with the National Association of
Securities Dealers, Inc.;
(k) Any advertising and other out-of-pocket expenses
of an Agent incurred with the approval of the Company; and
(l) The cost of providing any CUSIP or other
identification numbers for the Notes.
SECTION 5. Conditions of Obligations.
The obligations of each Agent to solicit offers to purchase
the Notes as agent of the Company, the obligations of any pur-
chaser of the Notes sold through each Agent as agent and the
obligation of an Agent to purchase Notes as principal will be
subject at all times to the accuracy of the representations and
warranties on the part of the Company herein and to the accuracy
of the statements of the Company's officer made in any
<PAGE> Exhibit 1(a)
------------
(16 of 38)
certificate furnished pursuant to the provisions hereof, to the
performance and observance in all material respects by the
Company of all covenants and agreements herein contained and to
the following additional conditions precedent:
(a) Legal Opinions. On the date hereof, the Agents shall
have received the following legal opinions, dated as of the date
hereof and in form and substance reasonably satisfactory to the
Agents:
(1) Opinion of Company Counsel. The opinion of
Kramer, Levin, Nessen, Kamin & Frankel, counsel to the
Company, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing
under the laws of the State of Delaware.
(ii) The Company has the corporate power and
authority to own, lease and operate its properties and
conduct its business as described in the Prospectus.
(iii) This Agreement (and, if the opinion is being
given pursuant to Section 6(b) hereof on account of the
Company having entered into a Terms Agreement, the
applicable Terms Agreement) has been duly authorized,
executed and delivered by the Company.
(iv) Each of the Indentures has been duly and
validly authorized, executed and delivered by the
Company and (assuming each of the Indentures has been
duly authorized, executed and delivered by the
applicable Trustee thereunder) constitutes a valid and
binding agreement of the Company, enforceable against
it in accordance with its terms, except in each case
that (A) enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and by
general principles of equity and (B) the remedy of
specific performance and injunctive and other forms of
equitable relief are subject to certain equitable
defenses and to the discretion of the court before
which any proceeding therefor may be brought, and
except further as enforcement thereof may be limited by
(Y) requirements that a claim with respect to any Note
denominated other than in U.S. dollars (or a foreign
currency or foreign currency unit judgment in respect
of such claim) be converted into U.S. dollars at a rate
of exchange prevailing on a date determined pursuant to
applicable law or (Z) any statute, law, judgment,
<PAGE> Exhibit 1(a)
------------
(17 of 38)
decree, order, regulation or rule of any court or
governmental authority that limits, delays or prohibits
the making of payments in a foreign currency or
currency unit or payments outside the United States.
(v) The Notes, in the forms certified by the
Company to be true and correct copies, are in the forms
prescribed in or pursuant to the applicable Indenture,
have been duly and validly authorized by all necessary
corporate action and, when executed and authenticated
as specified in or pursuant to the applicable Indenture
and delivered against payment of the consideration
therefor determined in accordance with this Agreement
and any applicable Terms Agreement, will be valid and
binding obligations of the Company, enforceable against
it in accordance with their terms, except in each case
that (A) enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and by
general principles of equity and (B) the remedy of
specific performance and injunctive and other forms of
equitable relief are subject to certain equitable
defenses and to the discretion of the court before
which any proceeding therefor may be brought, and
except further as enforcement thereof may be limited by
(Y) requirements that a claim with respect to any Notes
denominated other than in U.S. dollars (or a foreign
currency or foreign currency unit judgment in respect
of such claim) be converted into U.S. dollars at a rate
of exchange prevailing on a date determined pursuant to
applicable law or (Z) any statute, law, judgment,
decree, order, regulation or rule of any court or
governmental authority that limits, delays or prohibits
the making of payments in a foreign currency or cur-
rency unit or payments outside the United States, and
each holder of Notes will be entitled to the benefits
of the applicable Indenture.
(vi) The statements in the Prospectus under the
captions "Description of Medium-Term Notes", "The
Securities", "Description of Senior Securities",
"Description of Subordinated Securities" and "Federal
Income Tax Consequences", insofar as they purport to
summarize certain provisions of documents specifically
referred to therein, are accurate summaries of such
provisions in all material respects.
(vii) Each of the Indentures is qualified under
the 1939 Act.
<PAGE> Exhibit 1(a)
------------
(18 of 38)
(viii) The Registration Statement is effective
under the 1933 Act and, to the best of such counsel's
knowledge, no stop order suspending the effectiveness
of the Registration Statement has been issued under the
1933 Act or proceedings therefor initiated or
threatened by the Commission.
(ix) At the time the Registration Statement
became effective, the Registration Statement (other
than the financial statements and notes thereto and
related schedules and other financial and statistical
data included or incorporated by reference therein or
omitted therefrom and the Statements of Eligibility of
the Trustees on Form T-1) complied as to form in all
material respects with the requirements of the 1933
Act, the 1939 Act and the regulations promulgated under
each of those Acts.
(x) No authorization, approval, consent, order or
decree of any United States or Delaware court or
governmental authority or agency is necessary in con-
nection with the sale of the Notes, except such as may
be required under the 1933 Act, the 1939 Act, the
regulations promulgated under each of those Acts or
state securities or Blue Sky laws.
(xi) Each document filed pursuant to the 1934 Act
and incorporated by reference in the Prospectus (other
than the financial statements and notes thereto and
related schedules and other financial and statistical
data included or incorporated by reference therein or
omitted therefrom) complied when filed as to form in
all material respects with the 1934 Act and the 1934
Act Regulations thereunder.
(xii) The execution and delivery of this Agreement,
any applicable Terms Agreement and the Indentures and
the consummation of the transactions contemplated
herein and therein do not conflict with or result in
any violation of the provisions of the charter or by-
laws of the Company.
(2) Opinion of John R. Worthington, Esq., Senior Vice
President and General Counsel. The opinion of John R.
Worthington, Esq., Senior Vice President and General Counsel
of the Company, to the effect that:
(i) To the best of such counsel's knowledge, the
Company is duly qualified as a foreign corporation to
transact business and is in good standing in each
<PAGE> Exhibit 1(a)
------------
(19 of 38)
jurisdiction in which such qualification is required,
except where the failure to so qualify would not have a
material adverse effect on the Company and its
subsidiaries considered as one enterprise.
(ii) Each Significant Subsidiary of the Company
has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate
power and authority to own, lease and operate its
properties and conduct its business as described in the
Prospectus, and, to the best of such counsel's
knowledge, is duly qualified as a foreign corporation
to transact business and is in good standing in each
jurisdiction in which such qualification is required,
except where the failure to so qualify would not have a
material adverse effect on the Company and its subsidi-
aries considered as one enterprise; all of the issued
and outstanding capital stock of each Significant
Subsidiary has been duly authorized and validly issued
and is fully paid and non-assessable, and all of such
capital stock owned by the Company, directly or through
subsidiaries, is owned free and clear of any mortgage,
pledge, lien, encumbrance, claim or equity (except for
any lien or encumbrance permitted pursuant to
Article VI of the Revolving Credit Agreement, dated as
of June 8, 1994, among the Company and Bank of America
National Trust and Savings Association, as agent for
the financial institutions party thereto, Articles X
and XII of the Senior Indenture, Article X of the
Subordinated Indenture and Article XIII of the
Indenture, dated as of October 15, 1989, between the
Company and Bankers Trust Company, as trustee).
(iii) To the best of such counsel's knowledge,
there are no legal or governmental proceedings pending
or threatened which are required to be disclosed in the
Prospectus, other than those disclosed therein, and all
pending legal or governmental proceedings to which the
Company or any subsidiary is a party or of which any of
their property is the subject which are not described
in the Prospectus, including ordinary routine
litigation incidental to the business, are, in the
aggregate, not material to the Company and its
subsidiaries considered as one enterprise.
<PAGE> Exhibit 1(a)
------------
(20 of 38)
(iv) To the best of such counsel' knowledge, there
are no contracts, indentures, mortgages, loan agree-
ments, notes, leases or other instruments or documents
required to be described or referred to in the Regis-
tration Statement or to be filed as exhibits thereto
other than those described or referred to therein or
filed or incorporated by reference as exhibits thereto,
the descriptions thereof or references thereto are
correct in all material respects, and no default exists
in the due performance or observance of any material
obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, loan agreement,
note, lease or other instrument so described, referred
to, filed or incorporated by reference which would have
a material adverse effect on the Company and its
subsidiaries considered as one enterprise.
(v) To the best of such counsel's knowledge, the
execution and delivery of this Agreement, any
applicable Terms Agreement and the Indentures and the
consummation of the transactions contemplated herein
and therein do not conflict with or constitute a breach
of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any
material property or assets of the Company or any of it
subsidiaries pursuant to, any material contract,
indenture, mortgage, loan agreement, note, lease or
other instrument known to such counsel and to which the
Company or any of its subsidiaries is a party or by
which it or any of them is bound or to which any of the
material property or assets of the Company or any of
its subsidiaries is subject, or any United States or
Delaware law, administrative regulation or
administrative or court order or decree known to such
counsel to be applicable to the Company of any United
States or Delaware court or governmental agency,
authority or body or any arbitrator having jurisdiction
over the Company.
(3) Opinion of Counsel to the Company Relating to the
Communications Act. The opinion of John R. Worthington,
Esq., Senior Vice President and General Counsel of the
Company, or other counsel to the Company satisfactory to the
Agents, relating to the Communications Act of 1934, as
amended (the "Communications Act") (as to which matters the
opinions required pursuant to subsection (a)(1) (and (a)(2),
if John R. Worthington, Esq., is not rendering the opinions
required by this subsection (a)(3)) of this Section 5 shall
not cover), to the effect that:
<PAGE> Exhibit 1(a)
------------
(21 of 38)
(i) Nothing in the Communications Act prevents,
impairs, limits or otherwise adversely affects (A) the
due and valid authorization, execution and delivery of
the Notes or the Indentures, (B) the valid and binding
nature or enforceability of any of the provisions of
the Notes or the Indentures or (C) any holder of Notes
from being entitled to the benefits of the applicable
Indenture.
(ii) To the best of such counsel's knowledge,
under the Communications Act there are no legal or
governmental proceedings pending or threatened which
are required to be disclosed in the Prospectus, other
than those disclosed therein, and all pending legal or
governmental proceedings to which the Company or any
subsidiary is a party or of which any of their property
is the subject which are not described in the
Prospectus, including ordinary routine litigation
incidental to the business, are, in the aggregate, not
material to the Company and its subsidiaries considered
as one enterprise.
(iii) Insofar as such relates to the Communica-
tions Act, no authorization, approval, consent, order
or decree of any court or governmental authority or
agency is necessary in connection with the sale of the
Notes; and, to the best of such counsel's knowledge,
the execution and delivery of this Agreement, any
applicable Terms Agreement and the Indentures and the
consummation of the transactions contemplated herein
and therein do not conflict with, violate or result in
the creation or imposition of any lien, charge or
encumbrance upon any material property or assets of the
Company or any of its subsidiaries pursuant to, the
Communications Act or any administrative regulations
thereunder.
(4) Opinion of Counsel to the Agents. The opinion of
Brown & Wood, counsel to the Agents, covering the matters
referred to in subsection (a)(1) of this Section 5 under the
subheadings (i) and (iii) to (ix), inclusive.
(5) Rule 10b-5 Opinion. In giving their opinions
required by subsection (a)(1), (a)(2), (a)(3) and (a)(4) of
this Section 5, Kramer, Levin, Nessen, Kamin & Frankel, John
R. Worthington, Esq., counsel rendering the opinions
required by subsection (a)(3) (as to any matters under the
Communications Act) and Brown & Wood shall each additionally
state that nothing has come to their attention that has
<PAGE> Exhibit 1(a)
------------
(22 of 38)
caused them to believe that the Registration Statement
(other than the financial statements and notes thereto and
related schedules and other financial and statistical data
included or incorporated by reference therein or omitted
therefrom and the Statements of Eligibility of the Trustees
on Form T-1, as to which counsel need not comment), at the
time it became effective or (if an amendment to the
Registration Statement or an Annual Report on Form 10-K has
been filed by the Company with the Commission subsequent to
the effectiveness of the Registration Statement) at the time
such amendment became effective or at the time of the most
recent such filing, or at the date of this Agreement or any
applicable Terms Agreement, contained or contains an untrue
statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading or that the
Prospectus (other than the financial statements and notes
thereto and related schedules and other financial and
statistical data included or incorporated by reference
therein or omitted therefrom, as to which counsel need not
comment), as amended or supplemented at the date hereof or
at the date of any applicable Terms Agreement and at the
Settlement Date with respect thereto, as the case may be,
included or includes an untrue statement of a material fact
or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(b) Officers' Certificates. At the date hereof and at each
Settlement Date with respect to any applicable Terms Agreement,
there shall not have been, since the respective dates as of which
information is given in the Registration Statement and the
Prospectus or since the date of such Terms Agreement, any
material adverse change in the condition, financial or otherwise,
of the Company and its subsidiaries considered a one enterprise,
or in the earnings or business affairs of the Company and its
subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business; and on the date hereof the
Agents shall have received a (1) certificate of the President and
the Chief Financial Officer of the Company, dated the date
hereof, to the effect that (i) there has been no such material
adverse change, (ii) the other representations and warranties of
the Company contained in Section 1 are true and correct with the
same force and effect as though expressly made at and as of the
date of such certificate, (iii) the Company has in all material
respects complied with all agreements and satisfied all condi-
tions on its part to be performed or satisfied at or prior to the
date of such certificate and (iv) to such officers' knowledge, no
stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose
<PAGE> Exhibit 1(a)
------------
(23 of 38)
have been initiated or threatened by the Commission and (2) a
certificate of the Chief Financial Officer or the Controller of
the Company, dated the date hereof, to the effect that there was
no material decrease, on a consolidated basis, in the net assets
of the Company at a specified date not more than five days prior
to the date of such certificate, as compared with the amounts
shown on the most recent consolidated balance sheet of the
Company incorporated by reference in the Registration Statement
and the Prospectus or, during the period from the date of such
balance sheet to a specified date not more than five days prior
to the date of such certificate, there were no material
decreases, as compared with the corresponding period in the
preceding year, on a consolidated basis, in the revenue or net
income of the Company, except in each such case as set forth in
or contemplated by the Registration Statement and the Prospectus
and except for such exceptions enumerated in such certificate as
shall have been agreed to by the Agents and the Company.
(c) Comfort Letter. On the date hereof, the Agents shall
have received a letter from Price Waterhouse, dated the date
hereof and in form and substance reasonably satisfactory to the
Agents, to the effect that:
(i) They are independent accountants with respect to
the Company and its subsidiaries within the meaning of the
1933 Act and the 1933 Act Regulations.
(ii) In their opinion, the consolidated financial
statements of the Company audited by them and incorporated
by reference in the Registration Statement and the
Prospectus comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act and
the 1933 Act Regulations with respect to registration
statements on Form S-3 and the 1934 Act and the 1934 Act
Regulations.
(iii) They have performed specified procedures, not
constituting an audit, including a reading of the latest
available interim unaudited consolidated financial infor-
mation of the Company, a reading of the minute books of the
Company since the end of the most recent year with respect
to which an audit report has been issued, inquiries of and
discussions with certain officials of the Company responsi-
ble for financial and accounting matters with respect to the
unaudited consolidated financial statements incorporated by
reference in the Registration Statement and the Prospectus
and the latest available interim unaudited consolidated
financial information of the Company, and such other
inquiries and procedures as may be specified in such letter,
and on the basis of such inquiries and procedures nothing
<PAGE> Exhibit 1(a)
------------
(24 of 38)
came to their attention that caused them to believe that:
(A) the unaudited consolidated financial statements of the
Company incorporated by reference in the Registration
Statement and the Prospectus do not comply as to form in all
material respects with the applicable accounting require-
ments of the 1934 Act and the 1934 Act Regulations or that
any material modifications should be made to such unaudited
consolidated financial statements for them to be in
conformity with generally accepted accounting principles,
(B) at the date of the latest available interim unaudited
consolidated financial information, there was any change in
the consolidated capital stock or any increase in
consolidated long-term debt of the Company or any decrease
in the consolidated net assets of the Company, in each case
as compared with the amounts shown on the most recent
consolidated balance sheet of the Company incorporated by
reference in the Registration Statement and the Prospectus
or, during the period from the date of such balance sheet to
the date of the latest available interim unaudited consoli-
dated financial information, there were any decreases, as
compared with the corresponding period in the preceding
year, in consolidated revenues or net income of the Company,
except in each such case as set forth in or contemplated by
the Registration Statement and the Prospectus or except for
such exceptions enumerated in such letter as shall have been
agreed to by the Agents and the Company or (C) at a speci-
fied date not more than five days prior to the date of such
letter, there was any decrease of 5% or more in the
consolidated capital stock or any increase of 5% or more in
the consolidated debt of the Company consisting of
commercial paper, bank borrowings or publicly registered
debt, in each case as compared with the amounts shown on the
most recent consolidated balance sheet of the Company,
except in each such case as set forth in or contemplated by
the Registration Statement and the Prospectus or except for
such exceptions enumerated in such letter as shall have been
agreed to by the Agents and the Company.
(iv) The letter shall also state that they have:
(a) Compared the dollar amounts set forth under
the columns under the captions "Capitalization"
and "Selected Consolidated Financial Data" to the
appropriate consolidated statements of operations
included in the Company's Annual Reports to Stock-
holders and the quarterly reports on Form 10-Q, or
to accounts in the Company's accounting records
subject to its system of internal accounting
controls and to schedules prepared by the Company
therefrom, as appropriate;
<PAGE> Exhibit 1(a)
------------
(25 of 38)
(b) Compared the dollar amounts set forth under
the caption "Recent Developments", if any, to the
appropriate unaudited consolidated statements of
operations of the Company; and
(c) Compared the ratios set forth under the
caption "Ratio of Earnings to Fixed Charges" and
the dollar amounts set forth under the columns in
the exhibit "Computation of Ratio of Earnings to
Fixed Charges" to the appropriate consolidated
statements of operations and disclosures included
in the Company's Annual Reports to Stockholders
and the quarterly reports on Form 10-Q, or to
accounts in the Company's accounting records and
to schedules prepared by the Company therefrom, as
appropriate, and computed the ratios set forth in
the same exhibit.
(v) In addition to the examination referred to in
their report included or incorporated by reference in the
Registration Statement and the Prospectus, and the limited
procedures referred to in clauses (iii) and (iv) above, they
have carried out certain other specified procedures, not
constituting an audit, with respect to certain amounts,
percentages and financial information which are included or
incorporated by reference in the Registration Statement and
the Prospectus and which are specified by the Agents, and
have found such amounts, percentages and financial informa-
tion to be in agreement with the relevant accounting, finan-
cial and other records of the Company and its subsidiaries
identified in such letter.
(d) Other Documents. On the date hereof and on each
Settlement Date with respect to any applicable Terms Agreement,
counsel to the Agents shall have been furnished with such docu-
ments and opinions as such counsel may reasonably require for the
purpose of enabling such counsel to pass upon the issuance and
sale of Notes as herein contemplated and related proceedings, or
in order to evidence the accuracy and completeness of any of the
representations and warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of Notes as
herein contemplated shall be reasonably satisfactory in form and
substance to the Agents and to counsel to the Agents.
<PAGE> Exhibit 1(a)
------------
(26 of 38)
If any condition specified in this Section 5 shall not have
been fulfilled when and as required to be fulfilled, this Agree-
ment or any applicable Terms Agreement may be terminated by the
Agents or the applicable Agent or Agents, as the case may be, by
notice to the Company at any time and any such termination shall
be without liability of any party to any other party, except that
the covenants set forth in Section 3(g) hereof, the provisions of
Section 4 hereof, the indemnity and contribution agreement set
forth in Sections 7 and 8 hereof, and the provisions of Sections
9, 12 and 13 hereof shall remain in effect.
SECTION 6. Subsequent Documentation Requirements of the Company.
The Company covenants and agrees that:
(a) Subsequent Delivery of Certificates. (1) Each time
that (i) the Registration Statement or the Prospectus shall be
amended or supplemented (other than by any Pricing Supplement
relating solely to the establishment of the specific terms of any
Notes, or, unless the Agents shall otherwise specify, by an
amendment or supplement which relates exclusively to an offering
of debt securities other than the Notes), (ii) there is filed
with the Commission any document incorporated by reference into
the Prospectus (other than any proxy statement or any Current
Report on Form 8-K relating exclusively to the issuance of debt
securities other than the Notes, unless the Agents shall
otherwise specify), (iii) if required pursuant to the terms of a
Term Agreement, the Company sells Notes to one or more of the
Agents pursuant to a Terms Agreement or (iv) the Company sells
Notes in a form not previously certified to the Agents by the
Company, the Company shall furnish or cause to be furnished to
each Agent or, in the event of a sale of Notes pursuant to the
terms of a Terms Agreement, only to each applicable Agent,
forthwith a certificate, dated the date of effectiveness of such
amendment or the date of such supplement, the date of filing such
document with the Commission, or the date of such sale, as the
case may be, in form reasonably satisfactory to such Agent or
Agents to the effect that the statements contained in the
certificate referred to in Section 5(b)(1) hereof which were last
furnished to such Agent or Agents are true and correct at the
time of such amendment, supplement, filing or sale, as the case
may be, as though made at and as of such time (except that such
statements shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such
time) or, in lieu of such certificate, a certificate of the same
<PAGE> Exhibit 1(a)
------------
(27 of 38)
tenor as the certificate referred to in said Section 5 (b)(1),
modified as necessary to relate to the Registration Statement and
the Prospectus as amended and supplemented to the time of
delivery of such certificate.
(2) Each time that (i) the Registration Statement or the
Prospectus shall be amended or supplemented to include additional
financial information, (ii) there is filed with the Commission
any document incorporated by reference into the Prospectus which
contains additional financial information, (iii) if required
pursuant to the terms of a Terms Agreement, the Company sells
Notes to one or more of the Agents pursuant to a Terms Agreement
or (iv) the Company sells Notes in a form not previously
certified to the Agents by the Company, the Company shall furnish
or cause to be furnished each Agent or, in the event of a sale of
Notes pursuant to the terms of a Terms Agreement, only to each
applicable Agent, a certificate, dated the date of effectiveness
of such amendment or the date of such supplement, the date of
filing such document with the Commission, or the date of such
sale, as the case may be, in form satisfactory to such Agent or
Agents, of the same tenor as the certificate referred to in
Section 5(b)(2) hereof but modified to relate to the Registration
Statement and Prospectus, as amended and supplemented to the date
of such letter, with such changes as may be necessary to reflect
changes in the financial statements and other information derived
from the accounting records of the Company.
(b) Subsequent Delivery of Legal Opinions. Each time that
(i) the Registration Statement or the Prospectus shall be amended
or supplemented (other than by any Pricing Supplement relating
solely to the establishment of the specific terms of any Notes,
by an amendment or supplement providing solely for the inclusion
of additional financial information, or, unless the Agents shall
otherwise specify, by an amendment or supplement which relates
exclusively to an offering of debt securities other than the
Notes), (ii) there is filed with the Commission any document
incorporated by reference into the Prospectus (other than any
proxy statement or any Current Report on Form 8-K or Quarterly
Report on Form 10-Q, unless the Agents shall otherwise specify),
(iii) if required pursuant to the terms of a Terms Agreement, the
Company sells Notes to one or more Agents pursuant to a Terms
Agreement or (iv) the Company sells Notes in a form not
previously certified to the Agents by the Company, the Company
shall furnish or cause to be furnished forthwith to each Agent
or, in the event of a sale of Notes pursuant to the terms of a
Terms Agreement, only to each applicable Agent, and to counsel to
such Agent or Agents, a letter from each counsel last furnishing
the opinion referred to in Section 5(a) hereof, dated the date of
effectiveness of such amendment or the date of such supplement,
<PAGE> Exhibit 1(a)
------------
(28 of 38)
the date of filing such document with the Commission, or the date
of such sale, as the case may be, to the effect that such Agent
or Agents may rely on such last opinion to the same extent as
though it was dated the date of such letter authorizing reliance
(except that statements in such last opinion shall be deemed to
relate to the Registration Statement and the Prospectus as
amended and supplemented to the time of delivery of such letter
authorizing reliance) or, in lieu of such letter, each such
counsel, or other counsel chosen by the Company and reasonably
satisfactory to such Agent or Agents, shall furnish an opinion,
dated the date of effectiveness of such amendment or the date of
such supplement, the date of filing such document with the
Commission, or the date of such sale, as the case may be, in form
reasonably satisfactory to such Agent or Agents, of the same
tenor as the opinion referred to in Section 5(a) hereof, but
modified, as necessary, to relate to the Registration Statement
and the Prospectus as amended and supplemented to the time of
delivery of such opinion.
(c) Subsequent Delivery of Comfort Letters. Each time that
(i) the Registration Statement or the Prospectus shall be amended
or supplemented to include additional financial information, (ii)
there is filed with the Commission any document incorporated by
reference into the Prospectus which contains additional financial
information or (iii) if required pursuant to the terms of a Terms
Agreement, the Company sells Notes to one or more of the Agents
pursuant to a Terms Agreement, the Company shall cause Price
Waterhouse, or any successor entity, or another nationally
recognized independent public accounting firm chosen by the
Company and reasonably satisfactory to the Agents, forthwith to
furnish each Agent or, in the event of a sale of Notes pursuant
to the terms of a Terms Agreement, only to each applicable Agent,
a letter, dated the date of effectiveness of such amendment or
the date of such supplement, the date of filing such document
with the Commission, or the date of such sale, as the case may
be, in form satisfactory to such Agent or Agents, of the same
tenor as the portions of the letter referred to in clauses (i)
and (ii) of Section 5(c) hereof but modified to relate to the
Registration Statement and Prospectus as amended and supplemented
to the date of such letter, and of the same general tenor as the
portions of the letter referred to in clauses (iii) and (iv) of
said Section 5(c) with such changes as may be necessary to
reflect changes in the financial statements and other information
derived from the accounting records of the Company; provided,
however, that if the Registration Statement or the Prospectus is
amended or supplemented solely to include financial information
as of and for a fiscal quarter, Price Waterhouse, or its
successor entity, or such other nationally recognized independent
public accounting firm, as the case may be, may limit the scope
of such letter to the unaudited financial statements included in
<PAGE> Exhibit 1(a)
------------
(29 of 38)
such amendment or supplement unless any other information
included therein of an accounting, financial or statistical
nature is of such a nature that, in the reasonable judgment of
such Agent or Agents and as agreed to by the Company, which
agreement shall not be unreasonably withheld, such letter should
cover such other information.
SECTION 7. Indemnification.
(a) Indemnification of the Agents. The Company agrees to
indemnify and hold harmless each of the Agents and each person,
if any, who controls any Agent within the meaning of Section 15
of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any
untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any amend-
ment thereto), or the omission or alleged omission therefrom
of a material fact required to be stated therein or neces-
sary to make the statements therein not misleading or aris-
ing out of any untrue statement or alleged untrue statement
of a material fact included in the Prospectus (or any amend-
ment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circum-
stances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or
any investigation or proceeding by any governmental agency
or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, if such
settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever (including,
subject to Section 7(c) hereof, the reasonable fees and
disbursements of counsel chosen by the Agents), as incurred,
reasonably incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under (i) or
(ii) above;
<PAGE> Exhibit 1(a)
------------
(30 of 38)
provided, however, that this indemnity agreement shall not apply
to any loss, liability, claim, damage or expense to the extent
arising out of any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity
with written information furnished to the Company jointly by the
Agents expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supple-
ment thereto), or made in reliance upon the Statements of
Eligibility of the Trustees filed on Form T-1 as exhibits to the
Registration Statement; and provided further that if it shall
ultimately be determined that one or more of the Agents is not
entitled to be indemnified by the Company, such Agent or Agent
shall repay to the Company any sums paid to such Agent or Agents
by the Company pursuant to this Section.
(b) Indemnification of Company. Each of the Agents sever-
ally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act against any and
all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section 7, as
incurred, but only with respect to untrue statements or omis-
sions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto) or the Prospec-
tus (or any amendment or supplement thereto) in reliance upon and
in conformity with written information furnished to the Company
jointly by the Agents expressly for use in the Registration
Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto); provided, however, that if it
shall ultimately be determined that the Company is not entitled
to be indemnified by the Agents, the Company shall repay to the
Agents any sums paid to the Company by the Agents pursuant to
this Section 7.
(c) General. Each indemnified party shall give notice as
promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may
be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liabil-
ity which it may have otherwise than on account of this indemnity
agreement. An indemnifying party may participate at its own
expense in the defense of such action. In no event shall the
indemnifying parties be liable for the fees and expenses of more
than one counsel (in addition to any local counsel) separate from
their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or
circumstances.
<PAGE> Exhibit 1(a)
------------
(31 of 38)
SECTION 8. Contribution.
In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in
Section 7 is for any reason held to be unenforceable by the
indemnified parties although applicable in accordance with its
terms, the Company and the Agents shall contribute to the aggre-
gate losses, liabilities, claims, damages and expenses the nature
contemplated by said indemnity agreement incurred by the Company
and the Agents, as incurred, in such proportions that each Agent
is responsible for that portion represented by the percentage
that the total commissions and underwriting discounts received by
such Agent bear to the total sales price received by the Company
from the sale of the relevant Notes through or to such Agent, and
the Company is responsible for the balance; provided, however,
that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudu-
lent misrepresentation. For purposes of this Section 8, each
person, if any, who controls any Agent within the meaning of
Section 15 of the 1933 Act shall have the same rights to contri-
bution as such Agent, and each director of the Company, each
officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act shall have the same rights to
contribution as the Company.
SECTION 9. Representations, Warranties and Agreements to
Survive Delivery.
All representations, warranties and agreements contained in
this Agreement or in certificates of officers of the Company
submitted pursuant hereto, shall remain operative and in full
force and effect, regardless of any investigation made by or on
behalf of the Agents or any controlling person of each Agent, or
by or on behalf of the Company, and shall survive each delivery
of and payment for any of the Notes.
SECTION 10. Termination.
(a) Termination of this Agreement. This Agreement (exclud-
ing any Terms Agreement) may be terminated for any reason, at any
time by either the Company or any Agent upon the giving of 30
days' written notice of such termination to the other party
hereto; provided, however, that the termination of this Agreement
by one Agent shall terminate this Agreement only between such
Agent and the Company.
<PAGE> Exhibit 1(a)
------------
(32 of 38)
(b) Termination of Terms Agreement. Unless otherwise
provided in a Terms Agreement, the applicable Agent or Agents may
terminate any Terms Agreement, immediately upon notice to the
Company, at any time at or prior to the Settlement Date relating
thereto (i) if there has been, since the date of such Terms
Agreement or since the respective dates as of which information
is given in the Registration Statement and the Prospectus, any
material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, or
(ii) if there shall have occurred any material adverse change in
the financial markets in the United States or any outbreak or
escalation of hostilities or other national or international
calamity or crisis the effect of which shall be such as to make
it, in the reasonable judgment of such Agent or Agents, imprac-
ticable to market the Notes or enforce contracts for the sale of
the Note, or (iii) if trading in any securities of the Company
shall have been suspended by the Commission or a national securi-
ties exchange, or if trading generally on either the American
Stock Exchange or the New York Stock Exchange shall have been
suspended, or minimum or maximum prices for trading shall have
been fixed, or maximum ranges for prices for securities shall
have been required, by either of said exchanges or by order of
the Commission or any other governmental authority, or if a
banking moratorium shall have been declared by either Federal or
New York authorities, or if a banking moratorium shall have been
declared by the relevant authorities in the country issuing any
foreign currency in which the Notes to be sold pursuant to such
Terms Agreement are denominated or payable, or (iv) if the rating
assigned by any nationally recognized securities rating agency to
any debt securities of the Company as of the date of such Terms
Agreement shall have been lowered since that date or if any such
rating agency shall have publicly announced that it has placed
any debt securities of the Company on what is commonly termed a
"watch list" for possible downgrading, or (v) if there shall have
come to any applicable Agent's attention any facts that would
cause such Agent reasonably to believe that the Prospectus, at
the time it was required to be delivered to a purchaser of Notes,
included an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the statements
therein, in light of the circumstances existing at the time of
such delivery, not misleading.
<PAGE> Exhibit 1(a)
------------
(33 of 38)
(c) General. In the event of any such termination, neither
party will have any liability to the other party hereto, except
that (i) each Agent shall be entitled to any commissions earned
in accordance with the third paragraph of Section 2(a) hereof,
(ii) if at the time of termination (a) each Agent shall own any
Notes purchased as principal or (b) an offer to purchase any of
the Notes has been accepted by the Company but the time of
delivery to the purchaser or his agent of the Note or Notes
relating thereto has not occurred, the covenants set forth in
Section 3 and 6 hereof shall remain in effect until such Notes
are so resold or delivered, as the case may be, and (iii) the
covenant set forth in Section 3(g) hereof, the provisions of
Section 4 hereof, the indemnity and contribution agreement set
forth in Sections 7 and 8 hereof, and the provision of Sections
9, 12 and 13 hereof shall remain in effect.
SECTION 11. Notices.
All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices
to the Agents shall be directed to Merrill Lynch & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated, World Financial
Center, North Tower, New York, New York 10281, attention of MTN
Product Management, Citicorp Securities, Inc., 399 Park Avenue,
New York, New York 10043, attention of _______________, Goldman,
Sachs & Co., 85 Broad Street, New York, New York 10004, attention
of Credit Department, Lehman Brothers, Lehman Brothers Inc., 3
World Financial Center, New York, New York 10285, attention of
___________________ and Salomon Brothers Inc, Seven World Trade
Center, New York, New York 10048, attention of Medium-Term Note
Group, respectively; notices to the Company shall be directed to
it at 1801 Pennsylvania Avenue, N.W., Washington, D.C. 20006,
attention of General Counsel.
SECTION 12. Parties.
This Agreement shall inure to the benefit of and be binding
upon the Agents and the Company and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other
than the parties hereto and their respective successors and the
controlling persons and officers and directors referred to in
Sections 7 and 8 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision herein contained. This Agreement
and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the parties hereto and their
<PAGE> Exhibit 1(a)
------------
(34 of 38)
respective successors and said controlling persons and officers
and directors and their heirs and legal representatives, and for
the benefit of no other person, firm or corporation. No
purchaser of Notes shall be deemed to be a successor by reason
merely of such purchase.
SECTION 13. Governing Law; Jurisdiction.
This Agreement and the rights and obligations of the parties
created hereby shall be governed by and construed in accordance
with the laws of the State of New York applicable to agreements
made and to be performed entirely in such State. Any suit,
action or proceeding brought by the Company against an Agent in
connection with or arising under this Agreement shall be brought
solely in the state or federal court of appropriate jurisdiction
located in the Borough of Manhattan, The City of New York.
<PAGE> Exhibit 1(a)
------------
(35 of 38)
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counter-
part hereof, whereupon this instrument along with all counter-
parts will become a binding agreement between the Agents and the
Company in accordance with its terms.
Very truly yours,
MCI COMMUNICATIONS CORPORATION
By:___________________________
Title:
CONFIRMED AND ACCEPTED, as of
the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
Title:
CITICORP SECURITIES, INC.
By:
Title:
(GOLDMAN, SACHS & CO.)
LEHMAN BROTHERS INC.
By:
Title:
SALOMON BROTHERS INC
By:
Title:
<PAGE> Exhibit 1(a)
------------
(36 of 38)
SCHEDULE A
The Company agrees to pay each Agent a commission, in the
form of discount, equal to the applicable percentage of the
principal amount of each Note sold by the Company as a result of
a solicitation made by such Agent, as set forth below:
<TABLE>
<S> <C> <C>
PERCENT OF
MATURITY RANGES PRINCIPAL AMOUNT
Senior Subordinated
From 9 months but less than 1 year..... .125% .150%
From 1 year but less than 18 months.... .150 .175
From 18 months but less than 2 years... .200 .225
From 2 years but less than 3 years..... .250 .300
From 3 years but less than 4 years..... .350 .400
From 4 years but less than 5 years..... .450 .500
From 5 years but less than 6 years..... .500 .550
From 6 years but less than 7 years..... .550 .625
From 7 years but less than 10 years.... .600 .675
From 10 years but less than 15 years... .625 .700
From 15 years but less than 20 years... .700 .775
From 20 years to and including 30 years .750 .825
</TABLE>
<PAGE> Exhibit 1(a)
------------
(37 of 38)
EXHIBIT A
The following terms, if applicable, shall be agreed to by one or
more of the Agents and the Company pursuant to the applicable
Terms Agreement:
Senior/Subordinated Status:
Principal Amount: $
(or principal amount of foreign currency or currency
unit)
Interest Rate:
If Fixed Rate Note, Interest Rate:
If Floating Rate Note:
Interest Rate Basis or Bases:
Initial Interest Rate:
Initial Interest Reset Date:
Interest Rate Reset Period:
Interest Rate Reset Date(s):
Spread and/or Spread Multiplier:
Interest Payment Period:
Interest Payment Date(s):
Index Maturity:
Maximum Interest Rate:
Minimum Interest Rate:
Fixed Rate Commencement Date:
Fixed Interest Rate:
Calculation Agent:
If Redeemable:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction:
If Repayable:
Repayment Date(s):
If Indexed:
Specified Currency:
Indexed Currency:
Base Rate:
Other Index or Indices:
<PAGE> Exhibit 1(a)
------------
(38 of 38)
Date of Stated Maturity:
Purchase Price: %
Settlement Date and Time:
Currency of Denomination:
Denomination (if other than in U.S. dollars):
Currency of Payment:
Additional Terms:
Also, agreement as to whether the following will be required:
Officer's Certificates pursuant to Section 6(a) of the
Distribution Agreement.
Legal Opinions pursuant to Section 6(b) of the
Distribution Agreement.
Comfort Letter pursuant to Section 6(c) of the
Distribution Agreement.
Stand-off Agreement pursuant to Section 3(j) of the
Distribution Agreement.
Default provisions:
<PAGE> Exhibit 99(a)
---------------
(Page 1 of 9)
MCI NET INCOME INCREASES MORE THAN 30 PERCENT IN 1994
WASHINGTON, D.C., January 26, 1995 -- MCI (NASDAQ:MCIC) today reported
1994 revenue increased $1.4 billion to a record high $13.3 billion. Reflecting
the company's emphasis on higher margin products, MCI generated net income of
$887 million with earnings per share climbing to $1.47, excluding one-time
charges. Traffic increased 12 percent over 1993.
ANNUAL 1994 RESULTS
o MCI reported its revenue increased to $13.3 billion, nearly 12
percent over 1993 revenue of $11.9 billion. Including one-time charges,
reported net income increased to $795 million, more than 36 percent over
1993 net income of $582 million. On that basis, earnings per share
increased to $1.32, a 27 percent increase over 1993 reported earnings
per share of $1.04.
o Excluding one-time charges in both years, annual net income
was $887 million or $1.47 per share in 1994 versus net income of $719
million or $1.28 per share in 1993.
<PAGE> Exhibit 99(a)
--------------
(Page 2 of 9)
FOURTH QUARTER 1994 RESULTS
o MCI reported revenue of $3.4 billion, an increase of $272
million or nearly nine percent over the fourth quarter of 1993.
Reported net income increased to $151 million, more than 41 percent
above the year-ago figure of $107 million. Earnings per share increased
to 22 cents, a more than 22 percent increase over the 18 cents for the
year-ago period.
o Excluding one-time charges in both years, fourth quarter net
income was $243 million or 35 cents per share in the quarter versus
$199 million or 34 cents per share in the year-ago quarter.
Traffic for the quarter was nearly 8 percent over the year-ago quarter.
The one-time items in the fourth quarter of 1994 included a previously
announced $25 million charge for settlement of certain 900 number lawsuits and
a $70 million incremental start-up cost associated with the launch of
networkMCI BUSINESS. MCI also took a $63 million depreciation charge mainly to
recognize the reduced utility of older asynchronous transmission equipment.
MCI has accelerated its deployment of SONET or synchronous optical network
transmission technology throughout its domestic network. SONET technology
provides the highest levels of network reliability, performance and efficiency.
<PAGE> Exhibit 99(a)
--------------
(Page 3 of 9)
Additionally, MCI recorded a $10 million gain on the saleof its 24.5
percent ownership in AAP Telecommunications, a leading long distance provider
in Australia.
"MCI had a good year in 1994," said Bert C. Roberts, Jr., MCI chairman
and CEO. "The company grew revenue, net income and profitability while moving
into new, high-margin industry segments including software, electronic
information and local services. MCI is well positioned to compete in the new
age of communications and information."
New services, initiatives and growth in the business, consumer and
global markets drove 1994 results, the company said.
In the business market, MCI continued to grow its share of the 800,
international, data and carrier markets, MCI said. Proof Positive, MCI's
program for ensuring its business customers are saving money with the
appropriate plan, resulted in both record customer satisfaction and retention
levels during 1994.
During 1994, MCI also aggressively moved to provide a portfolio of
integrated services to businesses, introducing networkMCI BUSINESS, the
industry's first communications software package for business that combines
electronic mail, information services, collaborative work, Internet access and
electronic shopping.
<PAGE> Exhibit 99(a)
--------------
(Page 4 or 9)
In January of this year, recognizing increased
competitive pressure during late 1994, MCI introduced Friends & Family
Connections, which delivers innovative products and services as well as re-
establishes MCI's savings position in the consumer market, the company said.
With Friends & Family Connections, MCI is the first long distance carrier
to offer an integrated and economical portfolio of communications services that
packages long distance, electronic mail, paging, personal 800 numbers and
calling card services. Also during 1994, 1-800-COLLECT continued with strong
growth in the lucrative collect calling market, MCI said.
In the global market, MCI formally completed its
worldwide alliance with British Telecommunications, plc. (BT), with BT
purchasing 20 percent of MCI for $4.3 billion. Concert, the joint venture
company formed by MCI and BT in June to provide worldwide services for
multinational customers, is creating the world's most ubiquitous advanced
network and will connect more than 5,000 network access points in 55
countries by early 1995. According to industry analysts, Concert puts MCI
and BT a full year ahead of the competition to provide global communications
services.
<PAGE> Exhibit 99(a)
--------------
(Page 5 of 9)
In North America, MCI and Grupo Financiero
Banamex-Accival (Banacci), Mexico's largest financial group, launched AVANTEL,
a joint venture incorporated to provide competitive long distance services in
Mexico. After receipt of a license to provide competitive long distance
services in Mexico, expected in mid-1995, the joint venture expects to commence
construction of a fiber-optic network connecting the Mexican cities of Mexico
City, Monterrey and Guadalajara, thus allowing MCI to complete the first
integrated North American network.
To compete in the $90 billion local exchange market, MCI formed a
wholly-owned local access subsidiary, MCI Metro. MCI Metro has turned up local
networks in Atlanta, Boston, Dallas, Los Angeles and Washington, D.C. By the
end of 1995, MCI Metro plans to have operational networks in more than 20 major
U.S. cities. MCI has committed $500 million to MCI Metro during 1995.
During 1994, MCI's all-digital network, the second
largest in the world, surpassed 36,000 route miles, representing nearly 4.7
billion capacity circuit miles. SONET transmission technology is being deployed
throughout MCI's domestic network and will be operational on new international
routes by year-end 1995. MCI is using SONET technology to speed the
availability of high-speed multimedia applications and information services.
The network today represents a gross investment of more than $10 billion by MCI.
<PAGE> Exhibit 99(a)
-------------
(Page 6 of 9)
MCI, headquartered in Washington, D.C., has grown from its core long
distance business to become the world's third largest carrier of international
calling and a premier provider of data communications over the vast Internet
computer network. The company today provides a wide array of consumer and
business long distance and local services, data and video communications, on-
line information, electronic mail, network management services and
communications software.
<PAGE> Exhibit 99(a)
--------------
(Page 7 of 9)
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
INCOME STATEMENT
(NASDAQ: MCIC)
FOURTH QUARTER, 1994
Three months Twelve months
ended ended
December 31, December 31,
(unaudited) (unaudited)
-------------- --------------
1994 1993 1994 1993
---- ---- ---- ----
(In millions, except
per share amounts)
Revenue $3,400 $3,128 $13,338 $11,921
Operating expenses:
Telecommunications 1,764 1,659 6,916 6,373
Sales, operations and general 999 992 3,790 3,310
Depreciation 358 256 1,176 970
------ ------ ------- -------
Total operating expenses 3,121 2,907 11,882 10,653
------ ------ ------- -------
Income from operations 279 221 1,456 1,268
Interest expense (39) (33) (153) (178)
Interest income 47 1 50 8
Other expense, net (44) (15) (73) (53)
------ ------ ------ ------
Income before income taxes and
extraordinary item 243 174 1,280 1,045
Income tax provision 92 67 485 418
------ ------ ------ ------
Income before extraordinary item 151 107 795 627
Extraordinary loss on early debt
retirement, less applicable
income tax benefit 0 0 0 45
------ ------ ------ ------
Net income $ 151 $ 107 $ 795 $ 582
------ ------ ------ ------
Dividends on preferred stock 0 0 1 1
------ ------ ------ ------
Earnings applicable to common
stockholders $ 151 $ 107 $ 794 $ 581
====== ====== ====== ======
Earnings per common and common
equivalent shares:
Income before extraordinary item $ .22 $ .18 $ 1.32 $ 1.12
Income after extraordinary item $ .22 $ .18 $ 1.32 $ 1.04
Weighted average number of shares 685 581 604 562
<PAGE> Exhibit 99(a)
--------------
(Page 8 of 9)
ATTACHMENT A
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
(NASDAQ: MCIC)
FOURTH QUARTER, 1994
Three months ended Twelve months ended
December 31, December 31,
(unaudited) (unaudited)
--------------------------------------------
% %
1994 1993 Change 1994 1993 Change
--------------------------------------------
(In millions, except per share amounts and % change)
Revenue $3,400 $3,128 8.7% $13,338 $11,921 11.9%
Net Income $ 151 $ 107 41.1% $ 795 $ 582 36.6%
Dividends on preferred stock 0 0 1 1
Earnings applicable to common
stockholders $ 151 $ 107 41.1% $ 794 $ 581 36.7%
Earnings per common and common
equivalent shares:
Income before extraordinary item $ .22 $ .18 22.2% $ 1.32 $ 1.12 17.9%
Income after extraordinary item $ .22 $ .18 22.2% $ 1.32 $ 1.04 26.9%
Weighted average number of shares 685 581 604 562
Traffic Growth 7.9% 12.0%
<PAGE> Exhibit 99(a)
-------------
(Page 9 of 9)
MCI COMMUNICATIONS CORPORATION AND SUBSIDIARIES
BALANCE SHEET
(NASDAQ: MCIC)
DECEMBER 31, 1994 AND 1993
(In millions) (unaudited)
ASSETS 1994 1993
---- ----
CURRENT ASSETS
Cash and cash equivalents $ 1,429 $ 165
Marketable securities 839 -
Receivables, net 2,266 2,131
Other current assets 354 305
------ ------
TOTAL CURRENT ASSETS 4,888 2,601
------ ------
COMMUNICATIONS SYSTEM
System in service 9,766 8,563
Other property and equipment 2,452 2,172
------ ------
TOTAL COMMUNICATIONS SYSTEM IN SERVICE 12,218 10,735
Accumulated depreciation (4,349) (4,297)
Construction in progress 1,190 883
------ ------
TOTAL COMMUNICATIONS SYSTEM, NET 9,059 7,321
------ ------
OTHER ASSETS
Goodwill 1,103 1,093
Noncurrent marketable securities 824 -
Investment in affiliates 199 30
Other assets and deferred charges, net 293 231
------ ------
TOTAL OTHER ASSETS 2,419 1,354
------ ------
TOTAL ASSETS $16,366 $11,276
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued telecommunications expense $ 1,505 $1,507
Accounts payable and other accrued liabilities 1,502 1,479
Long-term debt due within one year 130 215
------ ------
TOTAL CURRENT LIABILITIES 3,137 3,201
------ ------
NONCURRENT LIABILITIES
Long-term debt 2,997 2,366
Deferred taxes and other 1,228 996
------ -------
TOTAL NONCURRENT LIABILITIES 4,225 3,362
------ -------
STOCKHOLDERS' EQUITY
Preferred Stock, Series D - 1
Class A common stock 14 -
Common stock 60 60
Additional paid in capital 6,227 2,493
Retained earnings 3,548 2,785
Treasury stock at cost (845) (626)
------ -------
TOTAL STOCKHOLDERS' EQUITY 9,004 4,713
------ -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $16,366 $11,276
====== ======
