<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 30, 1996
FILE NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------------
<TABLE>
<S> <C> <C>
MCI COMMUNICATIONS CORPORATION DELAWARE 52-0886267
(EXACT NAME OF REGISTRANT AS (STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
SPECIFIED IN ITS CHARTER) OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
1801 PENNSYLVANIA AVENUE, N.W.
WASHINGTON, D.C. 20006
(202) 872-1600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANTS' PRINCIPAL EXECUTIVE OFFICES)
MICHAEL H. SALSBURY, ESQ.
EXECUTIVE VICE PRESIDENT
AND
GENERAL COUNSEL
MCI COMMUNICATIONS CORPORATION
1801 PENNSYLVANIA AVENUE, N.W.
WASHINGTON, D.C. 20006
(202) 872-1600
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
COPY TO:
PETER S. KOLEVZON, ESQ.
KRAMER, LEVIN,
NAFTALIS & FRANKEL
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
(212) 715-9100
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, check the following
box. / /
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933 other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
====================================================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) FEE(1)
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock (par value $.10 per share) 150,000 Shares $26.875 $4,031,250 $1,390
====================================================================================================================
</TABLE>
(1) Estimated pursuant to Rule 457(c) solely for the purpose of computing the
registration fee based upon the average of the high and low prices of the Common
Stock on August 28, 1996, as reported on the Nasdaq National Market.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED AUGUST 30, 1996
150,000 SHARES
MCI COMMUNICATIONS CORPORATION
COMMON STOCK
The 150,000 shares (the "Shares") of Common Stock, par value $.10 per share
(the "Common Stock"), of MCI Communications Corporation ("MCI" or the "Company")
covered by this Prospectus are being sold by certain stockholders of the Company
(the "Selling Shareholders"). The Company will not receive any proceeds from the
sale of the Shares by the Selling Shareholders. See "Selling Shareholders",
"Plan of Distribution" and "Use of Proceeds."
------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------------------------------------
THE DATE OF THIS PROSPECTUS IS ___________________________, 1996
1
<PAGE> 3
Sales of the Shares covered by this Prospectus will be made only during
a period from September 9, 1996 to September 20, 1996. Such sales may be made
through brokers, to dealers acting as principals, directly to purchasers in
negotiated transactions, or by any combination of these methods of sale. Sales
may be made at prevailing market prices at the time of such sales, at prices
related to such prevailing prices, or at negotiated prices. Accordingly, sales
prices and proceeds to the Selling Shareholders will depend upon price
fluctuations of the Common Stock and the manner of sale. If the Shares are sold
through brokers, the Selling Shareholders will pay brokerage commissions and
other charges (which compensation as to a particular broker-dealer might be in
excess of customary commissions). Except for the payment of such brokerage
commissions and charges and the legal fees, if any, of the Selling Shareholders,
the Company will bear all expenses in connection with registering the Shares
covered hereby. Such expenses are estimated to total approximately $30,000. See
"Plan of Distribution."
SALES OF SHARES COVERED BY THIS PROSPECTUS MAY BE MADE ONLY DURING THE
PERIOD FROM SEPTEMBER 9, 1996 UNTIL SEPTEMBER 20, 1996. PROSPECTIVE PURCHASERS
OF SHARES FROM ANY SELLING SHAREHOLDER SHOULD BE AWARE THAT THE COMPANY HAS
INSTRUCTED ITS REGISTRAR AND TRANSFER AGENT NOT TO REGISTER THE TRANSFER OF ANY
SHARES SOLD BEFORE SEPTEMBER 9, 1996 OR SOLD AFTER SEPTEMBER 20, 1996. AS SOON
AS PRACTICABLE AFTER SEPTEMBER 20, 1996, THE COMPANY WILL FILE WITH THE
SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") A POST-EFFECTIVE AMENDMENT
TO THE REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS FORMS A PART TO REMOVE
FROM REGISTRATION ANY SHARES NOT SOLD BEFORE SEPTEMBER 20, 1996.
The Company's Common Stock is traded on the Nasdaq National Market
under the symbol MCIC. On September ___, 1996, the closing price for the Common
Stock, as reported on the Nasdaq National Market, was $__.___ per share.
The Selling Shareholders acquired the Shares from the Company in
connection with the merger (the "Merger") of Darome Teleconferencing, Inc.
("Darome") with and into a wholly-owned subsidiary of the Company on June 30,
1995. The Company is registering the Shares pursuant to contractual obligations
entered into in connection with the Merger.
The Selling Shareholders and any brokers or dealers who participate in
the sale of the Shares offered hereby may be deemed to be "underwriters" within
the meaning of Section 2(11) of the Securities Act of 1933, as amended (the
"Securities Act'), and any commissions received by them and any profit they
receive on any resale of the Shares as principal might be deemed to be
underwriting discounts and commissions under the Securities Act. The Company and
the Selling Shareholders have agreed to indemnify each other and their
respective affiliates against certain liabilities under the Securities Act, or,
if such indemnity is unavailable, to contribute towards amounts paid in respect
of such liabilities.
2
<PAGE> 4
MCI COMMUNICATIONS CORPORATION
MCI and its subsidiaries provide a broad range of communication
services, including long-distance telecommunication services, local and wireless
services and information technology services. The provision of long-distance
telecommunication services is the core business of MCI and its subsidiaries.
Long-distance telecommunication services comprise a wide spectrum of domestic
and international voice and data services, including long-distance telephone
services, data communication services, teleconferencing services and electronic
messaging services. During each of the last three years, more than 90% of the
operating revenues and operating income of MCI and its subsidiaries were derived
from this core business. Through its subsidiaries, MCI is the second largest
carrier of long-distance telecommunication services in the United States and the
third largest carrier of international long-distance telecommunication services
in the world.
MCI, a Delaware corporation organized in 1968, has its principal
executive offices at 1801 Pennsylvania Avenue, N.W., Washington, D.C. 20006, and
its telephone number is (202) 872-1600.
USE OF PROCEEDS
All of the Shares covered by this Prospectus are being offered by the
Selling Shareholders. Accordingly, the Company will not receive any of the
proceeds from sales of such Shares.
3
<PAGE> 5
SELLING SHAREHOLDERS
The following table sets forth the name of each Selling Shareholder,
the nature of any material relationship such Selling Shareholder has had within
the past three years with MCI or any of its predecessors or affiliates, the
number of shares of Common Stock owned by each Selling Shareholder on August 28,
1996, the number of such shares of Common Stock being offered for the account of
each Selling Shareholder, and the number of shares of Common Stock to be owned
by each Selling Shareholder after the completion of the offering.
<TABLE>
<CAPTION>
BEFORE THE OFFERING AFTER THE OFFERING
------------------- ------------------
Shares Shares Shares
Beneficially Percent Registered In Beneficially Percent
(3) Name of Beneficial Owner Owned(1) of Class The Offering Owned (2) of Class
- ---------------------------- -------- -------- ------------ --------- --------
<S> <C> <C> <C> <C> <C>
Lewis Manilow 137,363 * 35,000 102,363 *
James Miller 52,172 * 25,000 27,172 *
Donald Criqui 35,829 * 19,781 16,048 *
Warren Potash 25,143 * 13,882 11,261 *
T. Gibbs Kane 13,828 * 7,634 6,194 *
Harry Burn 8,800 * 4,859 3,941 *
Robert A. Judelson
Insurance Trust 54,058 * 8,000 46,058 *
Robert &
Kathryn Stewart 42,772 * 10,000 32,772 *
Gilbert Tauck 27,657 * 12,657 15,000 *
Arnold Meyer Trust 23,886 * 13,187 10,699 *
-------
150,000
=======
</TABLE>
* Less than 1% of outstanding shares.
(1) "Beneficial Ownership" includes shares for which a person, directly or
indirectly, has or shares voting or investment power or both. All of
the listed persons have sole voting and investment power over the
shares listed opposite their names.
(2) Assumes Selling Shareholders sell all Shares covered by this
Prospectus.
(3) The Selling Shareholders held approximately 53% of the voting common
stock of Darome prior to the merger of Darome with and into a
wholly-owned subsidiary of the Company. None of the Selling
Shareholders was a director or officer of Darome nor do any have a
material relationship with the Company as of the date of this
Prospectus.
4
<PAGE> 6
REGISTRAR AND TRANSFER AGENT
The Company's registrar and transfer agent is ChaseMellon Shareholder
Services, L.L.C., Ridgefield Park, New Jersey.
PLAN OF DISTRIBUTION
The Shares covered hereby will be sold for the benefit of the Selling
Shareholders. The Company has agreed to register the Shares pursuant to the
Agreement and Plan of Merger (the "Merger Agreement"), dated as of June 1, 1995,
among the Company, MCI Telecommunications Corporation and Darome. The Company
will not receive any of the proceeds from the sale of the Shares by the Selling
Shareholders
Sales of the Shares covered by this Prospectus will be allowed only
from September 9, 1996 to September 20, 1996. Such sales may be made through
brokers, to dealers acting as principals, directly to purchasers in negotiated
transactions, or any combination of these methods of sale. Sales may be made at
prevailing market prices at the time of such sales, at prices related to such
prevailing prices or at negotiated prices. Accordingly, sales prices and
proceeds to the Selling Shareholders will depend upon price fluctuations of the
Common Stock and the manner of sale.
PROSPECTIVE PURCHASERS OF SHARES FROM ANY SELLING SHAREHOLDER SHOULD BE
AWARE THAT THE COMPANY HAS INSTRUCTED ITS REGISTRAR AND TRANSFER AGENT NOT TO
REGISTER THE TRANSFER OF ANY SHARES SOLD BEFORE SEPTEMBER 9, 1996 OR SOLD AFTER
SEPTEMBER 20, 1996. AS SOON AS PRACTICABLE AFTER SEPTEMBER 20, 1996, THE COMPANY
WILL FILE WITH THE COMMISSION A POST-EFFECTIVE AMENDMENT TO REMOVE FROM
REGISTRATION ANY SHARES NOT SOLD BEFORE THAT DATE.
If the Shares are sold through brokers, the Selling Shareholders will
pay brokerage commissions and other charges, including any transfer taxes (which
compensation as to a particular broker-dealer might be in excess of customary
commissions). Except for the payment of such brokerage commissions and charges
and the legal fees, if any, of the Selling Shareholders, the Company will bear
all expenses in connection with registering the shares covered hereby. Such
expenses are estimated to total approximately $30,000.
The Selling Shareholders and any broker-dealers who act in connection
with the sale of the Shares offered hereby may be deemed to be "underwriters"
within the meaning of Section 2(11) of the Securities Act, and any commissions
received by them and profit they make on any resale of the Shares as principals
might be deemed to be underwriting discounts and commissions under the
Securities Act.
The Company and the Selling Shareholders have agreed to indemnify each
other and their respective affiliates against certain liabilities, including
liabilities under the Securities Act, or, if such indemnity is unavailable, to
contribute towards amounts paid in respect to such liabilities.
5
<PAGE> 7
AVAILABLE INFORMATION
MCI is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith filed reports and other information with the Commission. Reports,
proxy statements and other information filed by MCI with the Commission pursuant
to the informational requirements of the Exchange Act may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at
the following Regional Offices of the Commission: Chicago Regional Office, Suite
1400, Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661; and New
York Regional Office, 7 World Trade Center, 13th Floor, Suite 1300, New York,
New York, 10048. Copies of such material can be obtained at prescribed rates
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549. In addition, the Commission maintains a
Web site at http://www.sec.gov containing reports, proxy and information
statements and other information regarding registrants, including the Company,
that file electronically with the Commission.
MCI has filed with the Commission a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act with respect to the Shares offered hereby.
This Prospectus omits, in accordance with the rules and regulations of the
Commission, certain of the information contained in the Registration Statement.
Reference is hereby made to the Registration Statement and the exhibits and the
financial statements, notes and schedules filed as part thereof or incorporated
by reference therein for further information with respect to MCI and the Shares
offered hereby. Statements contained herein concerning the provisions of any
document are not necessarily complete and, in each instance, where a copy of
such document has been filed as an exhibit to the Registration Statement or
otherwise has been filed with the Commission, reference is made to the copy so
filed. Each such statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
MCI's (i) Annual Report on Form 10-K for the fiscal year ended December
31, 1995, (ii) Quarterly Reports on Form 10-Q for the quarters ended March 31,
1996 and June 30, 1996, (iii) Current Reports on Form 8-K dated June 21, 1996
and August 8, 1996, and (iv) the description of the Common Stock contained in
MCI's Registration Statement on Form 8A, dated ________, 19__ previously filed
by MCI with the Commission and any amendments or reports filed for the purpose
of updating such description, are incorporated by reference in this Prospectus
and shall be deemed to be a part hereof.
Each document filed by MCI with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of any offering of the Shares offered
hereby shall be deemed to be incorporated herein by reference and to be a part
hereof from the date of filing such document. Any statement contained herein, or
in a
6
<PAGE> 8
document all or a portion of which is incorporated or deemed to be incorporated
by reference herein, shall be deemed to be modified or superseded for purposes
of the Registration Statement and this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of the Registration
Statement or this Prospectus.
MCI will provide without charge to any person to whom a copy of this
Prospectus is delivered, upon written or oral request of such person, a copy of
any and all of the documents that have been or may be incorporated by reference
herein (other than exhibits to such documents which are not specifically
incorporated by reference into such documents). Such requests should be directed
to the Secretary, MCI Communications Corporation, 1801 Pennsylvania Avenue,
N.W., Washington D.C. 20006 (telephone: (202) 872-1600).
LEGAL MATTERS
Certain legal matters with respect to the legality of the shares of
Common Stock offered hereby will be passed upon for the Company by Kramer,
Levin, Naftalis & Frankel, New York, New York.
EXPERTS
The consolidated financial statements of MCI and its subsidiaries
incorporated herein by reference to MCI's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995 have been so incorporated in reliance on the
report of Price Waterhouse LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
7
<PAGE> 9
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY MCI OR ANYONE ACTING ON ITS BEHALF OR THE SELLING SHAREHOLDER.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES DESCRIBED IN THIS
PROSPECTUS OR AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATIONS THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF MCI SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
----------------------------
TABLE OF CONTENTS
Prospectus
<TABLE>
<CAPTION>
Page
----
<S> <C>
MCI Communications Corporation ........................................ 3
Use of Proceeds ....................................................... 3
Selling Shareholders .................................................. 4
Plan of Distribution .................................................. 5
Available Information ................................................. 6
Incorporation of Certain
Information by Reference ........................................... 6
Legal Matters ......................................................... 7
Experts ............................................................... 7
</TABLE>
150,000 SHARES
COMMON STOCK
MCI
COMMUNICATIONS
CORPORATION
DATED: ________, 1996
8
<PAGE> 10
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the issuance and distribution
of the Shares covered by this Registration Statement, other than underwriting
discounts and commissions, are as follows:
<TABLE>
<S> <C>
(a) SEC registration fee (actual) ........... $ 1,390
(b) Printing fees and expenses .............. 1,000
(c) Legal fees and expenses ................. 20,000
(d) Accounting fees and expenses ............ 5,000
(e) Blue Sky fees and expenses .............. 2,000
(f) Other ................................... 610
-------
Total ................................... $30,000
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
MCI has in effect an insurance policy covering officers' and directors'
legal liability containing a maximum limit of $50 million per loss per policy
year, including legal fees and expenses, with retained liability for each loss
of $2,000,000 for MCI.
MCI's Restated Certificate of Incorporation, at Section 8, provides as
follows:
(a) No director of this corporation shall be personally liable
to this corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director; provided that this provision shall not
eliminate or limit the liability of a director (i) for any breach of
the director's duty of loyalty to this corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the General Corporation Law of the State of Delaware, or
(iv) for any transaction from which the director derived an improper
personal benefit. If the General Corporation Law of the State of
Delaware is amended after approval by the stockholders of this
paragraph (a) to authorize corporate action further limiting or
eliminating the personal liability of directors, then the liability of
a director of this Corporation shall be limited or eliminated to the
fullest extent permitted by the General Corporation Law of the State of
Delaware, as so amended. No amendment or repeal of this paragraph (a)
shall apply to or have any effect on the liability or alleged liability
of any director of this corporation for or with respect to any acts or
omissions of such director occurring prior to such amendment or repeal.
II-1
<PAGE> 11
(b) This corporation shall, to the fullest extent permitted by
Delaware law, as in effect from time to time, indemnify all persons who
are or were directors, officers and employees of this corporation or
any wholly-owned subsidiary, and all such directors, officers and
employees who, at the request of this corporation, are or were at any
time serving any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise in any capacity. This
corporation may also indemnify all other persons to the fullest extent
permitted by Delaware law.
The General Corporation Law of the State of Delaware, at Section 145,
provides, in pertinent part, that a corporation may indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation), by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as the
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interest of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgement, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful. In
addition, the indemnification of expenses (including attorney's fees) is allowed
in derivative actions, except no indemnification is allowed in respect to any
claim, issue or matter as to which any such person has been adjudged to be
liable to the corporation, unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought decides that
indemnification is proper. To the extent that any such person succeeds on the
merits or otherwise, he shall be indemnified against expenses (including
attorney's fees) actually and reasonably incurred by him in connection
therewith. The determination that the person to be indemnified met the
applicable standard of conduct, if not made by a court, is made by the directors
of the corporation by a majority vote of the directors not party to such an
action, suit or proceeding even though less than a quorum or, if there are no
such directors, or if such directors direct, by independent legal counsel in a
written opinion or by the stockholders. Expenses may be paid in advance upon the
receipt of undertakings to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the corporation as
authorized in such Section 145. A corporation may purchase indemnity insurance.
The above described indemnification and advancement of expenses, unless
otherwise provided when authorized or ratified, continue as to a person who has
ceased to be a director, officer, employee or agent and inure to the benefit of
such person's heirs, executors and administrators.
II-2
<PAGE> 12
MCI has indemnification agreements with each of its directors which
have been approved by stockholders. The indemnification under the
indemnification agreements differs from that provided in Section 8 of MCI's
Restated Certificate of Incorporation in the following ways: (i) MCI is
obligated to advance litigation expenses to an indemnitee, subject to
reimbursement if the Reviewing Party (as defined in the indemnification
agreements) determines that the director would not be permitted such
indemnification under applicable laws; (ii) MCI must prove that the applicable
standard of conduct has not been met for indemnification if MCI denies
protection to a director; (iii) upon a potential change in control (as defined
in the indemnification agreements) MCI is required to contribute an amount
sufficient to pay all claims for which the indemnitee is entitled to be
indemnified to a trust for the benefit of the indemnitee (subject to an overall
maximum amount on such trust); (iv) a subsequent board of directors, hostile to
an indemnitee entitled to indemnification, will not have the right to make a
final determination that the indemnitee has not met the required standard of
care; and (v) the period of time in which MCI may sue an indemnitee for an
action is limited to two years from the date of accrual of such cause of action.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act"), may be permitted to directors,
officers and controlling persons of MCI pursuant to the foregoing provisions, or
otherwise, MCI has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
MCI of expenses incurred or paid by a director, officer or controlling person of
MCI in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the securities
being registered, MCI will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
ITEM 16. EXHIBITS.
4.01 Form of Common Stock Certificate. (Incorporated herein by
reference to Exhibit 4(e) to the Registrant's Registration
Statement on Form S-3, Reg. No. 33-37740.)
4.02 Rights Agreement dated as of September 30, 1994, between the
Registrant and Mellon Bank, N.A. (Incorporated herein by
reference to Exhibit 4(a) to the Registrant's Current Report
on Form 8-K dated October 4, 1994.)
4.03 Provisions of the Restated Certificate of Incorporation of MCI
defining the rights of holders of the Common Stock of the
Registrant. (Incorporated herein by reference to Exhibit 3(a)
to MCI's Annual Report on Form 10-K for the fiscal year ended
December 31, 1994.)
II-3
<PAGE> 13
5.01 Opinion of Kramer, Levin, Naftalis & Frankel, relating to the
legality of the Common Stock.
23.01 Consent of Price Waterhouse LLP.
23.02 Consent of Kramer, Levin, Naftalis & Frankel (included in
Exhibit 5.01 hereto).
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b)
if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration
Statement or any material change in such information in the
Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 (the "Exchange Act") that are incorporated by reference in
the Registration Statement.
(2) That, for purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus filed as
part of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
II-4
<PAGE> 14
Registration Statement as of the time it was declared effective.
(3) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(4) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(5) That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-5
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, MCI
Communications Corporation certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereto duly authorized, in the City of Washington and District of Columbia on
August 30, 1996.
MCI COMMUNICATIONS CORPORATION
By: /s/ Bert C. Roberts, Jr.
------------------------
Bert C. Roberts, Jr.
Chairman
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following Officers and Directors
of MCI Communications Corporation on August 30, 1996 in the capacities indicated
below.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
/s/ Bert C. Roberts, Jr.
- ------------------------------ Principal Executive Officer, Director
Bert C. Roberts, Jr.
/s/ Douglas L. Maine
- ------------------------------ Principal Financial Officer
Douglas L. Maine
/s/ James M. Schneider
- ------------------------------ Principal Accounting Officer
James M. Schneider
/s/ Clifford L. Alexander, Jr.
- ------------------------------ Director
Clifford L. Alexander, Jr.
</TABLE>
II-6
<PAGE> 16
<TABLE>
<S> <C>
/s/ Judith C. Areen
- ------------------------------- Director
Judith C. Areen
/s/ Michael H. Bader
- ------------------------------ Director
Michael H. Bader
/s/ Sir Peter L. Bonfield
- ------------------------------ Director
Sir Peter L. Bonfield
/s/ Richard M. Jones
- ------------------------------ Director
Richard M. Jones
/s/ Gordon S. Macklin
- ------------------------------ Director
Gordon S. Macklin
/s/ Alfred T. Mockett
- ------------------------------ Director
Alfred T. Mockett
/s/ K. Rupert Murdoch
- ------------------------------ Director
K. Rupert Murdoch
/s/ Dr. Alan W. Rudge
- ------------------------------ Director
Dr. Alan W. Rudge
/s/ Richard B. Sayford
- ------------------------------ Director
Richard B. Sayford
</TABLE>
II-7
<PAGE> 17
<TABLE>
<S> <C>
/s/ Gerald H. Taylor
- ----------------------------- Director
Gerald H. Taylor
/s/ Judith Whittaker
- ------------------------------ Director
Judith Whittaker
/s/ John R. Worthington
- ------------------------------ Director
John R. Worthington
</TABLE>
II-8
<PAGE> 18
EXHIBIT INDEX
Exhibit
Number
- ------
4.01 Form of Common Stock Certificate. (Incorporated herein by reference to
Exhibit 4(e) to the Registrant's Registration Statement on Form S-3,
Reg. No. 33-37740.)
4.02 Rights Agreement dated as of September 30, 1994, between the Registrant
and Mellon Bank, N.A. (Incorporated herein by reference to Exhibit 4(a)
to the Registrant's Current Report on Form 8-K dated October 4, 1994.)
4.03 Provisions of the Restated Certificate of Incorporation of MCI defining
the rights of holders of the Common Stock of the Registrant.
(Incorporated herein by reference to Exhibit 3(a) to MCI's Annual
Report on Form 10-K for the fiscal year ended December 31, 1994.)
5.01 Opinion of Kramer, Levin, Naftalis & Frankel, relating to the legality
of the Common Stock.
23.01 Consent of Price Waterhouse LLP.
23.02 Consent of Kramer, Levin, Naftalis & Frankel (included in Exhibit 5.01
hereto).
<PAGE> 1
KRAMER, LEVIN, NAFTALIS & FRANKEL
9 1 9 T H I R D A V E N U E
NEW YORK, N.Y. 10022 - 3852
(212) 715 - 9100
ARTHUR H. AUFSES III RICHARD MARLIN SHERWIN KAMIN
THOMAS D. BALLIETT THOMAS E. MOLNER ARTHUR B. KRAMER
JAY G. BARIS THOMAS H. MORELAND MAURICE N. NESSEN
SAUL E. BURIAN ELLEN R. NADLER FOUNDING PARTNERS
BARRY MICHAEL CASS GARY P. NAFTALIS COUNSEL
THOMAS E. CONSTANCE MICHAEL J. NASSAU
MICHAEL J. DELL MICHAEL S. NELSON -----
KENNETH H. ECKSTEIN JAY A. NEVELOFF
CHARLOTTE M. FISCHMAN MICHAEL S. OBERMAN MARTIN BALSAM
DAVID S. FRANKEL PAUL S. PEARLMAN JOSHUA M. BERMAN
MARVIN E. FRANKEL SUSAN J. PENRY-WILLIAMS JULES BUCHWALD
ALAN R. FRIEDMAN BRUCE RABB RUDOLPH DE WINTER
CARL FRISCHLING ALLAN E. REZNICK MEYER EISENBERG
MARK J. HEADLEY SCOTT S. ROSENBLUM ARTHUR D. EMIL
ROBERT M. HELLER MICHELE D. ROSS MAXWELL M. RABB
PHILIP S. KAUFMAN MAX J. SCHWARTZ JAMES SCHREIBER
PETER S. KOLEVZON MARK B. SEGALL COUNSEL
KENNETH P. KOPELMAN JUDITH SINGER
MICHAEL PAUL KOROTKIN HOWARD A. SOBEL -----
KEVIN B. LEBLANG JEFFREY S. TRACHTMAN
DAVID P. LEVIN D. GRANT VINGOE M. FRANCES BUCHINSKY
EZRA G. LEVIN HAROLD P. WEINBERGER DEBORA K. GROBMAN
LARRY M. LOEB E. LISK WYCKOFF, JR. CHRISTIAN S. HERZECA
MONICA C. LORD PINCHAS MENDELSON
LYNN R. SAIDENBERG
JONATHAN M. WAGNER
SPECIAL COUNSEL
-----
FAX
August 30, 1996 (212) 715-8000
------
WRITER'S DIRECT NUMBER
(212) 715-7550
MCI Communications Corporation
1801 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Dear Sirs:
We have acted as counsel to you, MCI Communications Corporation, a
Delaware corporation (the "Company"), in connection with the preparation and
filing with the Securities and Exchange Commission (the "Commission") of a
Registration Statement on Form S-3 (the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), relating to the
proposed sale by certain stockholders of the Company (the "Selling
Shareholders") from time to time during the period from September 9, 1996 to
September 20, 1996 of up to an aggregate of 150,000 shares (the "Shares") of
the Company's Common Stock, par value $.10 per share (the "Common Share"). The
Shares were issued by the Company to the Selling Shareholders pursuant an
Agreement and Plan of Merger, dated as of June 1, 1995, by and among the
Company, MCI Telecommunications Corporation and Darome Teleconferencing, Inc.
(the "Merger Agreement"). The Company is registering the Shares pursuant to the
terms of a Registration Rights Agreement entered into by the Company in
connection with the consummation of the transactions contemplated by the Merger
Agreement.
We have examined the originals, photocopies or conformed copies of all
such records of the Company and all such agreements, certificates of public
officials, certificates of officers and representatives of the Company and
such other documents as we have deemed relevant and necessary as a basis for
the opinion hereinafter expressed. In such examinations, we have assumed the
genuineness of all signatures on original documents and the conformity to the
originals of all copies submitted to us as conformed copies or photocopies. As
to various
<PAGE> 2
questions of fact material to our opinion, we have relied upon representations,
statements or certificates of officers and representatives of the Company and
others.
Based upon the foregoing, we are of the opinion that the Shares are
validly issued, fully paid and nonassessable shares of the Common Stock of the
Company.
We are members of the Bar of the State of New York and are not members
of the bar of any other state. We are not expressing any opinion as to any
matter relating to the laws of any jurisdiction other than the State of New
York, the General Corporation Law of the State of Delaware and the federal law
of the United States of America, and we assume no responsibility as to the
applicability of the laws of any other jurisdiction to the subject transaction
or the effect of such laws thereon.
In rendering the foregoing opinion, we have not expressed, explicitly
or implicitly, any opinion as to proceedings before the Federal Communications
Commission or matters arising under the Communications Act of 1934, the
Telecommunications Act of 1996 or any similar state or local statute
regulating communications.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name under the heading "Legal
Matters" in the Prospectus forming a part of the Registration Statement. In
giving such consent, we do not thereby concede that we are within the category
of persons whose consent is required under Section 7 of the Securities Act or
the rules and regulations promulgated thereunder.
Very truly yours,
/s/ Kramer, Levin, Naftalis & Frankel
KRAMER, LEVIN, NAFTALIS & FRANKEL
<PAGE> 1
Exhibit 23 (a)
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
January 29, 1996, which appears on page 29 of MCI Communication Corporation's
("MCI") Annual Report to Stockholders for the year ended December 31, 1995,
which report is incorporated by reference to Exhibit 13 of MCI's Annual Report
on Form 10-K for the fiscal year ended December 31, 1995. We also consent to the
incorporation by reference of our report on the Financial Statement Schedules
which appears on page 30 of MCI's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995. We also consent to the reference to us under the
heading "Experts" in such Prospectus.
PRICE WATERHOUSE LLP
Washington, D.C.
August 30, 1996
