<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(A) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [ X ]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ X ] Preliminary Proxy Statement
[ ] Confidential, for use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
WorldCom, Inc.
- -------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ X ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
1) Title of each class of securities to which transaction applies:
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2) Aggregate number of securities to which transaction applies:
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3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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<PAGE> 2
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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2) Form, Schedule or Registration Statement No.:
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3) Filing Party:
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4) Date Filed:
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<PAGE> 3
[CORPORATE LOGO]
WORLDCOM, INC.
515 East Amite Street
Jackson, Mississippi 39201-2702
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Jackson, Mississippi
April 22, 1996
The annual meeting of the shareholders of WorldCom, Inc., a Georgia
corporation (the "Company"), will be held on Thursday, May 23, 1996, at 10:00
a.m. local time, at 515 East Amite Street, Jackson, Mississippi, for the
purposes of:
1. electing a Board of twelve directors;
2. considering and acting upon a proposal to amend the Company's Amended
and Restated Articles of Incorporation to increase the number of authorized
shares of common stock, par value $.01 per share, from 500,000,000 to
750,000,000;
3. considering and acting upon a proposal to approve the Company's Third
Amended and Restated 1990 Stock Option Plan;
4. considering and acting upon a proposal to approve the Company's
Special Performance Bonus Plan; and
5. transacting such other business as properly may come before the
meeting or any adjournments thereof.
Shareholders of record at the close of business on April 4, 1996, will be
entitled to receive notice of, and to vote at, the meeting.
A copy of the Company's Annual Report for 1995 accompanies this notice.
By Order of the Board of Directors
SCOTT D. SULLIVAN
Secretary
Whether or not you intend to be present at the meeting, please promptly
mark, sign, date and return the accompanying proxy. A return addressed
envelope is enclosed for your convenience.
<PAGE> 4
WorldCom, Inc
515 East Amite Street
Jackson, Mississippi 39201-2702
------------------------------
PROXY STATEMENT
------------------------------
SOLICITATION OF PROXIES
The enclosed proxy is solicited by the Board of Directors of WorldCom,
Inc., a Georgia corporation ("WorldCom" or the "Company"), for use at the
annual meeting of the Company's shareholders to be held at 515 East Amite
Street, Jackson, Mississippi, on Thursday, May 23, 1996, at 10:00 a.m. local
time and at any adjournments thereof. Shareholders of record at the close of
business on April 4, 1996 (the "Record Date"), will be entitled to receive
notice of, and to vote at, the meeting. Whether or not you expect to attend
the meeting in person, please return your executed proxy in the enclosed
envelope and the shares represented thereby will be voted in accordance with
your wishes. The first mailing of proxies to shareholders will occur on or
about April 22, 1996. If, after sending in your proxy, you decide to vote in
person or desire to change the voting instructions on your proxy or revoke your
proxy, you may do so by notifying the Secretary of the Company in writing of
such revocation at any time prior to the voting of the proxy, by submitting a
later-dated proxy or by attending the meeting and voting in person.
On September 15, 1993, Metromedia Communications Corporation, a Delaware
corporation ("MCC"), merged into Resurgens Communications Group, Inc., a
Georgia corporation ("Resurgens"). Immediately thereafter, LDDS
Communications, Inc., a Tennessee corporation ("LDDS-TN"), merged into
Resurgens, whereupon the name of Resurgens was changed to "LDDS Communications,
Inc." (the "Surviving Corporation"). Such mergers are hereinafter referred to
collectively as the "Mergers" and individually as a "Merger." Although from a
corporate law perspective Resurgens was the survivor in both Mergers, for
accounting purposes, LDDS-TN was the survivor of the second Merger. The
executive officers of LDDS-TN at the time of the Mergers became the executive
officers of the Surviving Corporation and the Board of Directors of the
Surviving Corporation consisted of seven members selected by LDDS-TN and three
members selected by Metromedia Company, a Delaware general partnership and
formerly the sole stockholder of MCC ("Metromedia"). Accordingly, unless
otherwise provided herein, all references to and information regarding the
Company contained in this Proxy Statement relate to LDDS-TN prior to the
Mergers and to the Surviving Corporation after the Mergers. At the annual
meeting of shareholders held May 25, 1995, shareholders of LDDS Communications,
Inc. voted to change the name of the Company to WorldCom, Inc., effective
immediately.
<PAGE> 5
ACTION TO BE TAKEN UNDER PROXY
SHARES WILL BE VOTED AS INSTRUCTED IN THE ACCOMPANYING PROXY ON EACH MATTER
SUBMITTED TO THE VOTE OF SHAREHOLDERS. IF ANY DULY EXECUTED PROXY IS RETURNED
WITHOUT VOTING INSTRUCTIONS, THE PERSONS NAMED AS PROXIES THEREON INTEND TO
VOTE ALL SHARES REPRESENTED BY SUCH PROXY AS FOLLOWS:
(1) FOR the election of the persons named herein as nominees for
directors of the Company to hold office until the 1997 annual meeting of
the Company's shareholders and until their successors have been duly
elected and qualified;
(2) FOR the amendment of Article Four, Section A, of the Company's
Amended and Restated Articles of Incorporation (the "Articles of
Incorporation") to increase the number of authorized shares of common
stock, par value $.01 per share (the "Common Stock"), from 500,000,000 to
750,000,000;
(3) FOR the approval of the Company's Third Amended and Restated 1990
Stock Option Plan;
(4) FOR the approval of the Company's Special Performance Bonus Plan;
and
(5) according to their best judgment on the transaction of such other
business as properly may come before the meeting or any adjournments
thereof.
COMPANY SECURITIES
On the Record Date, there were issued and outstanding ___________ shares of
Common Stock and 1,244,048 shares of Series 2 6.5% Cumulative Senior Perpetual
Convertible Preferred Stock (the "Series 2 Preferred Stock"). The holders of
shares of Common Stock issued and outstanding are entitled to cast one vote per
share on all matters voted on by the holders of Common Stock generally,
including the election of directors, and do not have cumulative voting rights.
The holders of Series 2 Preferred Stock are entitled to vote together with
holders of Common Stock as a single class on issues presented to a vote of the
Company's shareholders, on an as-if-converted basis, except under certain
conditions when such holders are entitled to vote as a separate class. On the
Record Date, the shares of Series 2 Preferred Stock issued and outstanding were
convertible at the option of the holders, into an aggregate of 2,633,081 shares
of Common Stock. The shares of Series 2 Preferred Stock do not carry
cumulative voting rights.
<PAGE> 6
PRINCIPAL HOLDERS OF VOTING SECURITIES
As of the Record Date, the following persons, individually or as a group,
were known to the Company to be deemed to be the beneficial owners of more than
five percent of the issued and outstanding Common Stock, each of which persons
has sole voting and investment power over such Common Stock, except as set
forth in the footnotes hereto:
Amount and
Name and Address of Nature of Existing Percent
Beneficial Owner Beneficial Ownership (1) Of Class (1)
- -------------------------------------- ------------------------- ------------
ALLTEL Corporation ("ALLTEL") 13,342,606 6.9%
One Allied Drive
Little Rock, Arkansas 72202
FMR Corp. 12,168,836 (2) 6.3%
82 Devonshire Street
Boston, Massachusetts 02109
- ---------------
(1) Based upon 193,947,255 shares of Common Stock issued and outstanding plus,
as to the holder thereof only, exercise or conversion of all derivative
securities that are exercisable or convertible currently or within 60 days
after the Record Date.
(2) Based upon shares owned as of December 31, 1995, as reported on its
Statement on Schedule 13G. Edward C. Johnson 3d, Chairman of FMR Corp.,
together with various trusts for the benefit of Johnson family members,
form a controlling group with respect to FMR Corp. Amount includes
12,037,399 shares beneficially owned by Fidelity Management & Research
Company ("Fidelity"), a wholly-owned subsidiary of FMR Corp., as a result
of acting as investment adviser to various investment companies registered
under Section 8 of the Investment Company Act of 1940 (the "Funds"). Each
of Edward C. Johnson 3d, FMR Corp., through its control of Fidelity, and
the Funds has sole power to dispose of these 12,037,399 shares. Neither
FMR Corp., Edward C. Johnson 3d, nor Abigail P. Johnson, Director of FMR
Corp., has the sole power to vote or direct the voting of shares owned
directly by the Funds, which power resides with the Funds' Boards of
Trustees. As the result of its serving as investment manager of the
institutional account(s) FMR Corp., through its control of Fidelity
Management Trust Company, has voting and dispositive power over 131,437
shares of Common Stock, including 56,737 shares of Common Stock resulting
from the assumed conversion of $2,160,000 principal amount of the Company's
5% Convertible Subordinate Debentures.
To the knowledge of the Company, 243,753 shares, or approximately 20%, of
the 1,244,048 outstanding shares of Series 2 Preferred Stock are owned by The
1818 Fund, L.P., 63 Wall Street, New York, NY 10005. The general and managing
partner of The 1818 Fund, L.P. is Brown Brothers Harriman & Co. ("Brown
Brothers"), which has designated its partners T. Michael Long and Lawrence C.
Tucker the sole and exclusive partners having voting and investment power with
respect to the Common Stock into which said Series 2 Preferred Stock is
convertible. On the Record Date, the 243,753 outstanding shares of Series 2
Preferred Stock owned by The 1818 Fund, L.P. were convertible into 515,914
shares of Common Stock, representing less than one percent of the outstanding
Common Stock.
<PAGE> 7
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the beneficial ownership of Common Stock, as
of the Record Date, by each nominee for election as a director, each director,
the named executive officers and by all persons, as a group, who are currently
directors and executive officers of the Company. Each nominee, director or
executive officer has sole voting and investment power over the shares listed
opposite his or her name except as set forth in the footnotes hereto.
Number of Shares Percent
Name of Beneficial Owner Beneficially Owned (1) of Class (1)
- ----------------------------------------- ---------------------- ------------
Carl J. Aycock 383,078 (2) *
Max E. Bobbitt 55,646 (3) *
Charles T. Cannada 132,434 (4) *
Bernard J. Ebbers 7,306,003 (5) 3.8%
Francesco Galesi 1,502,668 (6) *
Stiles A. Kellett, Jr. 1,049,859 (7) *
Silvia Kessel 6,000 (8) *
John W. Kluge 256,000 (9) *
Gregory A. LeVert 100,000 (10) *
John A. Porter 2,465,539 (11) 1.3%
Stuart Subotnick 16,000 (12) *
Scott D. Sullivan 137,505 (13) *
Lawrence C. Tucker 527,548 (14) *
Roy A. Wilkens 67,303 (15) *
All Directors and Current Executive
Officers as a Group (13 persons) 13,905,583 (16) 7.2%
- ---------------
* Less than one percent.
(1) Based upon 193,947,255 shares of Common Stock issued and outstanding plus,
as to the holder thereof only, exercise or conversion of all derivative
securities that are exercisable or convertible currently or within 60 days
after April 4, 1996.
(2) Includes 2,788 shares owned by Mr. Aycock's spouse, 37,658 shares
purchasable upon exercise of options, and 1,656 shares held as custodian
for children.
(3) Includes 11,756 shares purchasable upon exercise of options.
(4) Includes 127,974 shares purchasable upon exercise of options.
(5) Includes 18,216 shares held as custodian for children, 537,848 shares
purchasable upon exercise of options and 431,774 shares owned by
Mr. Ebbers' spouse, as to which Mr. Ebbers shares voting and investment
power.
(6) Consists of 1,490,912 shares owned by Rotterdam Ventures, Inc., of which
Mr. Galesi is sole shareholder; and 11,756 shares purchasable upon
exercise of options.
(7) Includes 8,000 shares owned by Mr. Kellett's spouse; 48,882 shares held by
or in trust for children; and 37,658 shares purchasable upon exercise of
options.
<PAGE> 8
(8) Consists of 6,000 shares purchasable upon exercise of options.
(9) Includes 6,000 shares purchasable upon exercise of options.
(10) Consists of 100,000 shares purchasable upon exercise of options.
(11) Includes 125,686 shares held as custodian or trustee for children; 29,024
shares purchasable upon exercise of options; and 100,900 shares owned by
spouse, as to which beneficial ownership is disclaimed.
(12) Includes 6,000 shares purchasable upon exercise of options.
(13) Includes 136,514 shares purchasable upon exercise of options.
(14) A total of 515,914 of these shares are issuable upon conversion of the
Series 2 Preferred Stock and are beneficially owned by The 1818 Fund, L.P.
Brown Brothers is the general and managing partner of The 1818 Fund, L.P.
and Mr. Tucker, as a general partner of Brown Brothers, shares voting and
investment power with respect to such securities. See "Principal Holders
of Voting Securities". Also includes 11,634 shares purchasable upon
exercise of options.
(15) Includes 66,666 shares purchasable upon exercise of options.
(16) Includes 1,542,402 shares purchasable upon exercise of options or
conversion of Series 2 Preferred Stock.
ITEM 1. ELECTION OF DIRECTORS
The Company's Bylaws provide that the Board of Directors shall consist of
not less than three directors, with the number to be determined from time to
time by the Board of Directors. The Board of Directors has currently fixed the
number of directors at twelve. Accordingly, twelve directors are to be elected
at the 1996 annual meeting as hereinafter provided.
All nominees have indicated their willingness to serve if elected and all
nominees are currently directors of the Company. Should any nominee named
herein for election become unavailable for any reason, it is intended that the
persons named in the proxy will vote for the election of such other person in
his or her stead as may be designated by the Board of Directors. The Board of
Directors is not aware of any reason that might cause any nominee to be
unavailable. The Board of Directors recommends a vote "FOR" the election of
all of the listed nominees.
Directors are elected by a plurality of the votes cast by the shares
entitled to vote in the election at a meeting of the shareholders at which a
quorum of the voting group involved is present. A majority of the votes
entitled to be cast in the election by the voting group constitutes a quorum of
that voting group for the election.
Shares as to which voting authority is withheld will be considered present
for purposes of determining the presence of a quorum at the annual meeting
(unless such shares are represented at such meeting solely to object to holding
the meeting, or transacting business at the meeting) but as not entitled to
vote, and not voted, for purposes of the election of directors. Shares as to
which a broker indicates it has no discretion to vote and which are not voted
<PAGE> 9
will be considered not present at such meeting for purposes of determining the
presence of a quorum and as unvoted for the election of directors.
Pursuant to the applicable provisions of the Articles of Incorporation,
holders of shares of Common Stock and Series 2 Preferred Stock currently are
entitled to vote as a single class in the election of the twelve directors at
the annual meeting. Each outstanding share of Common Stock is entitled to one
vote in the election and each holder of Series 2 Preferred Stock is entitled to
cast the number of votes per share of such Series 2 Preferred Stock as is equal
to the number of votes that such holder would be entitled to cast had such
holder converted the shares of Series 2 Preferred Stock held into Common Stock
on the Record Date.
In previous years, Ms. Kessel and Messrs. Kluge and Subotnick were
nominated and elected as directors of the Company by Metromedia, as holder of
the Series 1 $2.25 Cumulative Senior Perpetual Convertible Preferred Stock (the
"Series 1 Preferred Stock") acquired in the Mergers pursuant to the terms
thereof. In August 1995, Metromedia converted the Series 1 Preferred Stock
into shares of Common Stock in connection with the sale of such shares. See
"Executive Compensation -- Certain Relationships and Related Transactions."
Information about Nominees and Executive Officers
The following states each director or nominee's and each executive
officer's age, principal occupation, present position with the Company and the
year in which each director or nominee first was elected a director (each
serving continuously since first elected except as set forth otherwise).
Unless indicated otherwise, each individual has held his present position for
at least five years. All references to "the Company" include for these
purposes LDDS-TN and its predecessors.
Carl J. Aycock, 47, has been a director of the Company since 1983 and
served as Secretary of the Company from 1987 to 1995. Mr. Aycock was the
Secretary and Chief Financial Officer of Master Corporation, a motel management
and ownership company, from 1989 until 1992. Subsequent to 1992, Mr. Aycock
has been self employed as a financial administrator.
Max E. Bobbitt, 51, has been a director of the Company since
December 1992. He was a director of Advanced Telecommunications Corporation
("ATC") until its merger with the Company in December 1992 (the "ATC Merger").
Mr. Bobbitt held various positions including President and Chief Operating
Officer and director of ALLTEL, a telecommunications company, from 1970 until
his retirement in January 1995.
Charles T. Cannada, 37, serves as Senior Vice President of the Company,
which he joined in 1989. Prior to becoming Senior Vice President in January
1995, Mr. Cannada served as Treasurer, Chief Financial Officer and Assistant
Secretary of the Company.
Bernard J. Ebbers, 54, has been President and Chief Executive Officer of
the Company since April 1985. He has served as a director of the Company since
1983.
Francesco Galesi, 65, has been a director of the Company since
December 1992. He was a director of ATC until the ATC Merger. He is the
Chairman and Chief Executive Officer of the Galesi Group, which includes
<PAGE> 10
companies engaged in distribution, manufacturing, real estate and
telecommunications.
Stiles A. Kellett, Jr, 52, has served as a director of the Company since
1981. From 1978 to January 1996, Mr. Kellett served as Chairman of the Board
of Directors of Convalescent Services, Inc., a long-term health care company in
Atlanta, Georgia. He serves as a director of Frederica Bank & Trust Company,
St. Simons Island, Georgia and Mariner Health Group, Inc., New London,
Connecticut.
Silvia Kessel, 45, is Senior Vice President of Metromedia. Metromedia is
a diversified, privately held investment partnership and management company
engaged in a variety of businesses in the high technology, telecommunications,
computerized painting, automotive parts and the food services and hospitality
industries. Ms. Kessel has served as a director of the Company since
consummation of the Mergers. She also is a director of Metromedia
International Group, Inc.
John W. Kluge, 81, Chairman of the Board of the Company, also serves as
Metromedia's Chairman and President. Mr. Kluge has served as a director of the
Company since consummation of the Mergers. He also is a director of The Bear
Stearns Companies, Inc., Occidental Petroleum Corporation, Metromedia
International Group, Inc. and Conair Corporation.
John A. Porter, 51, Vice Chairman of the Board of the Company, served as
Chairman of the Board of Directors of the Company from 1988 until consummation
of the Mergers. From May 1995 to the present, Mr. Porter has served as
Chairman of the Board of Directors and Chief Executive Officer of Industrial
Electric Manufacturing Inc., a manufacturer of electrical power distribution
products. Mr. Porter also serves as Chairman of the Board of Directors of
Phillips & Brooks/Gladwin, Inc., a manufacturer of pay telephone enclosures and
equipment. Mr. Porter is President and sole shareholder of P.M. Restaurant
Group, Inc. which filed for protection under Chapter 11 of the U.S. Bankruptcy
Code in March 1995. He is also a director of Uniroyal Technology Corporation
and Intelligent Electronics, Inc.
Stuart Subotnick, 54, is Executive Vice President of Metromedia. Mr.
Subotnick has served as a director of the Company since consummation of the
Mergers. He also serves as a director of Carnival Cruise Lines, Inc. and
Metromedia International Group, Inc.
Scott D. Sullivan, 34, serves as Chief Financial Officer and Secretary of
the Company. From 1992 until December 1994, Mr. Sullivan served as Vice
President and Assistant Treasurer of the Company. From 1989 until 1992, Mr.
Sullivan served as an executive officer of two long-distance companies,
including ATC. From 1983 to 1989, Mr. Sullivan served in various capacities
with KPMG Peat Marwick LLP. Mr. Sullivan has served as a director of the
Company since March 1996, when he was elected by the Board of Directors.
Lawrence C. Tucker, 53, is a general partner of Brown Brothers, which is
the general and managing partner of The 1818 Fund, L.P. He is also a director
of Blenheim Group PLC, The WellCare Management Group, Inc. and Riverwood
International Corporation. Mr. Tucker has served as a director of the Company
since May 1995, and previously served as director of the Company from May 28,
1992 until the ATC Merger.
Roy A. Wilkens, 53, serves as President and Chief Executive Officer,
WilTel, which the Company purchased in January 1995. Prior to such date,
<PAGE> 11
Mr. Wilkens held various positions with The Williams Companies, Inc., including
President of Williams Pipe Line Co. and President and Chief Executive Officer
of WilTel, Inc. Mr. Wilkens has served as a director of the Company since
March 1995.
INFORMATION CONCERNING BOARD OF DIRECTORS
Committees and Meetings
During 1995, the Board of Directors of the Company held four meetings.
Each director attended at least 75% of the meetings of the Board of Directors
and committees on which such director served.
The Board of Directors has a standing Audit Committee, consisting of Max
E. Bobbitt (Chairman), Francesco Galesi and Silvia Kessel. During 1995, the
Audit Committee held two meetings. The Audit Committee performs the following
functions: (a) review of periodic financial statements, (b) communication with
independent accountants, (c) review of the Company's internal accounting
controls, and (d) recommendation to the Board of Directors as to selection of
independent accountants.
The Board of Directors has a standing Compensation and Stock Option
Committee consisting of Stiles A. Kellett, Jr. (Chairman), Stuart Subotnick and
Lawrence C. Tucker. The Compensation and Stock Option Committee held three
meetings during 1995. The duties of the Compensation and Stock Option
Committee are as follows: (a) to review and recommend to the Board of
Directors the annual salary, fees, bonus and other benefits of the directors,
officers and employees of the Company and the Company's subsidiaries; (b) to
administer the stock option plans of the Company, including a determination of
the individuals to whom options are granted and the terms and provisions of
options under such plans; and (c) to review and submit to the Board of
Directors recommendations concerning compensation, stock plans and other
benefits for the Company's directors, officers and employees and expense
account policies.
The Board of Directors has a Nominating Committee consisting of John A.
Porter (Chairman), Carl J. Aycock and John W. Kluge. The Nominating Committee
did not meet during 1995. The duties of the Nominating Committee include
recommending to the Board, if so requested by the Board, nominees for director,
successors to the Chief Executive Officer in the event there is a vacancy in
that office, and nominees for committee chairpersons and members. The
Nominating Committee, if it meets, or the Board will give due consideration to
written recommendations for nominees from shareholders for election as
directors. Under the Bylaws of the Company, shareholders are entitled to
nominate persons for election as directors only if written notice has been
given as specified therein to the Company's Secretary, 515 East Amite Street,
Jackson, Mississippi 39201-2702, not later than 90 days prior to the
anniversary of the preceding year's meeting. Such notice must set forth
information about the proposed nominee and the consent of the nominee, among
other things. See "Future Proposals of Security Holders."
Compensation of Directors
Effective January 1, 1996, the Company's directors are paid fees of
$22,500 per year and $1,000 per meeting of the Board plus certain expenses.
Committee members are paid a fee of $750 for any committee meeting on the same
<PAGE> 12
day as a Board meeting, and $1,000 for any other committee meeting, plus
certain expenses. The chairman of each committee receives an additional $3,000
per year. During 1995, directors were paid fees of $6,000 per year and $1,000
per meeting of the Board attended plus certain expenses. Committee members
were paid a fee of $300 for any committee meeting attended on the same day as a
Board meeting, and $500 for any other committee meeting attended, plus certain
expenses. The chairman of each committee received an additional $1,000.
Pursuant to the Company's Second Amended and Restated 1990 Stock Option
Plan, each director receives annually a non-discretionary grant of options to
purchase 3,000 shares of the Company's Common Stock at the fair market value of
such stock on the date of grant. Such options are immediately exercisable and
expire on the earliest to occur of (a) ten years following the date of grant,
(b) three months following retirement, (c) 12 months following termination of
service due to disability or death, (d) upon cessation of service for reasons
other than retirement, death or disability, or (e) the day preceding the
consummation of a specified change in control transaction, defined generally to
include the dissolution or liquidation of the Company, a reorganization,
merger or consolidation of the Company in which the Company is not the
surviving corporation, or a sale of substantially all of the assets or 80% or
more of the outstanding stock of the Company to another entity. The exercise
price may be paid in cash or, in the discretion of the committee which
administers the plan, Common Stock. In the discretion of such committee,
shares receivable on exercise may be withheld to pay applicable taxes on the
exercise. If approved by shareholders as proposed under "Item 3. Approval of
the Third Amended and Restated 1990 Stock Option Plan," the number of shares
awarded pursuant to the annual non-discretionary grant of options would be
increased to 5,000 for each non-employee director and such options would
expire, among other times, upon the date of consummation of a specified change
in control transaction.
REPORT OF COMPENSATION AND STOCK OPTION COMMITTEE
ON EXECUTIVE COMPENSATION
General
The Company's executive compensation program is administered by the
Compensation and Stock Option Committee of the Board of Directors (the
"Committee"). From May 31, 1994 to May 24, 1995, the Committee was composed of
Stiles A. Kellett, Jr. (Chairman), Danny M. Dunnaway and Silvia Kessel. Since
May 25, 1995, the Committee has been composed of Stiles A. Kellett, Jr.
(Chairman), Stuart Subotnick and Lawrence C. Tucker. None of the Committee
members are employees of the Company.
The Company's executive compensation policy as implemented by the
Committee is designed to provide a competitive compensation program that will
enable the Company to attract, motivate, reward and retain executives who have
the skills, experience and talents required to promote the short- and long-term
financial performance and growth of the Company. The compensation policy is
based on the principle that the financial rewards to the executive must be
aligned with the financial interests of the shareholders of the Company. In
this manner, the Company will meet its ultimate responsibility to its
shareholders.
The Company's executive compensation has three elements: base salary,
annual incentive compensation and long-term incentive compensation. The
Committee is endeavoring to maximize deductibility of compensation under
<PAGE> 13
Section 162(m) of the Internal Revenue Code to the extent practicable while
maintaining competitive compensation. The following is a summary of the
considerations underlying each element.
Base Salary
The Committee determines the salary ranges for each of the executive
officer positions of the Company, based upon the level and scope of the
responsibilities of the office and the pay levels of similarly positioned
executive officers in comparable companies. With respect to executive officers
other than the Chief Executive Officer, the evaluation of the Chief Executive
Officer is of paramount importance in setting base salaries. The Committee's
practice has been to establish base salaries for particular offices between the
median and high end of the range of such salaries at comparable companies, in
order to attract and retain the best qualified management team available. In
1995, base salaries for particular officers were consistent with this policy.
The peer group of companies for comparison of compensation levels is
composed of two other national facilities based, long distance
telecommunications companies. Although the market shares of these companies
exceed that of the Company, the Committee views these companies as comparable
for purposes of reflecting the market in which the Company competes for
executive talent. This is a smaller group than the peer group represented in
the index used for stock performance comparisons elsewhere in this Proxy
Statement under the caption "Comparison of Five-year Cumulative Total Returns."
The information as to salary and bonus ranges in the peer group companies is
acquired through the review of public filings. The Committee is satisfied that
it has reasonably accurate information with respect to salary ranges in the
Company's peer group.
The Committee begins its annual compensation review in November, and it
meets in the following February or March of each year to set the compensation
of the Company's executive officers. The Committee considers (i) the Company's
performance as evidenced in changes in the price of the Common Stock during the
year as compared to changes in its industry and the broader economic
environment, (ii) the Chief Executive Officer's recommendations with respect to
a particular officer, (iii) the officer's individual performance, (iv) any
significant changes in the officer's level of responsibility, and (v) each
officer's then-current salary within the range of salaries for such position.
The Committee includes significant qualitative components in evaluating the
individual performance of each executive officer. These components include the
officer's leadership, teambuilding and motivational skills, adaptability to
rapid change, and assimilation of new technical knowledge to meet the demands
of the industry's customers. In this qualitative evaluation, the Committee
exercises its collective judgment as to the officer's contributions to the
growth and success of the Company during the prior year and the expected
contributions of such officer in the future.
The proposed salary increases, as well as the annual and long-term
incentive awards, are presented for the approval of the Board of Directors of
the Company. Generally, such salary increases are made retroactive to
January 1 of the current year. For 1996, executive officers' salaries were
adjusted consistent with the policy to pay between the median and high end of
the range of such salaries at comparable companies. The Company's Board of
Directors unanimously approved the 1996 salary adjustments and the annual and
long-term incentive awards for 1995.
<PAGE> 14
Annual Incentive Compensation
The Company's executive officers, as well as other management employees,
are eligible to receive annual cash bonus awards. The key components in
determining the amount of such awards include the financial performance of the
Company in the context of the overall industry and economic environment,
generally as evidenced by changes in the Common Stock price during the prior
year, as well as the individual growth and success of the Company as measured
primarily by revenues. The judgment of each member of the Committee and, in
the case of other executive officers, of the Chief Executive Officer as to the
impact of the individual on the financial performance of the Company also are
considered. Based largely upon internal growth, the successful assimilation of
recent acquisitions into the Company's operations and the 81% increase in the
price of the Common Stock, the Committee awarded bonuses for 1995 which fell
between the median and high end of the range of annual bonuses at the peer
group companies.
In 1994, the Company adopted the Annual Performance Bonus Plan (the
"Annual Plan"), which relates to certain cash bonuses for the Chief Executive
Officer. The bonuses are predicated on the achievement by the Company of one
or more quantitative performance goals for the year. Over time, in light of
its experience with the Annual Plan and other compensation-related
considerations, the Committee may expand the number of participants in the
Annual Plan to include other executive officers of the Company. Subject to
attainment of the specified performance goal(s) and the limitation with respect
to the maximum bonus payable under the Annual Plan, the Committee exercises its
judgment as to individual contributions to the Company's performance, as set
forth above under the caption "Base Salary," in determining the actual amount
of the bonus or bonuses to be paid under the Annual Plan.
Long-Term Incentive Compensation
The Committee believes that long-term incentive compensation in the form
of stock options is the most direct way of making executive compensation
dependent upon increases in shareholder value. The Company's stock option
plans provide the means through which executive officers can build an
investment in Company Common Stock which will align such officers' economic
interests with the interests of shareholders. The value of the stock options
historically has increased as a result of increases in the price of the Common
Stock, and such options are highly valued by employees. The Committee believes
that the grant of stock options has been a particularly important component of
its success in retaining talented management employees.
The exercise price of each option has generally been the market price of
the Common Stock on the date of grant. The most recent option grants generally
provide for delayed vesting and have a term of ten years. The Committee
believes that stock options give the executive officers greater incentives
throughout the term of the options to strive to operate the Company in a manner
that directly affects the financial interests of the shareholders both on a
long-term, as well as a short-term, basis.
In determining the number of option shares to grant to executive officers,
the Committee considers on a subjective basis the same factors as it does in
determining the other components of compensation, with no single factor
accorded special weight. The recommendation of the Chief Executive Officer is
of paramount importance in determining awards to persons other than himself.
<PAGE> 15
Prior option grants to the individual involved are not considered in making new
nonqualified option grants.
Subject to obtaining shareholder approval, the Board of Directors has
approved the Third Amended and Restated 1990 Stock Option Plan. As discussed
in more detail elsewhere in the Proxy Statement, the amended plan will increase
the number of shares that may be issued under the plan from 11,537,986 shares
to 20,000,000 shares and effect certain other amendments. These amendments are
intended to further the purpose of the Company's Second Amended and Restated
1990 Stock Option Plan of enhancing the continued success of the Company by
providing management and key employees with an increased personal interest in
the Company.
The Committee believes this amended plan is an important mechanism to
align management incentives closely with the Company's performance and
shareholder value, and strongly recommends its adoption by the shareholders.
Compensation of Chief Executive Officer
Mr. Ebbers' base salary, annual incentive compensation and long-term
incentive compensation are determined by the Committee based upon the same
factors as those employed by the Committee for executive officers generally,
with exception for cash bonuses granted under (a) the Annual Plan, (b) the 1995
Special Performance Bonus Plan (the "1995 Plan"), and (c) as discussed below,
the proposed Special Performance Bonus Plan. The total compensation package of
Mr. Ebbers is designed to be competitive within the industry while creating
awards for short- and long-term performance in line with the financial
interests of the shareholders. In 1995, the compensation package for Mr.
Ebbers was consistent with this policy.
The Committee has approved the adoption of the Special Performance Bonus
Plan (the "Special Bonus Plan") which adoption is subject to obtaining
requisite shareholder approval. The Special Bonus Plan, which relates to a
special bonus for the Chief Executive Officer in addition to any bonus payable
under the Annual Plan or any other plan, is discussed in more detail elsewhere
in this Proxy Statement.
The Committee views the Special Bonus Plan as an important mechanism to
align the Chief Executive Officer's incentives closely with the Company's
performance and shareholder value, and strongly recommends its adoption by the
shareholders.
During 1994, after restatement for the merger with IDB Communications
Group, Inc. which was accounted for as a pooling-of-interests, revenues
increased from $1.5 billion to $2.2 billion. Also, on January 5, 1995, the
Company completed the acquisition of Williams Telecommunications Group, Inc.
(the "WilTel Acquisition") for approximately $2.5 billion in cash. On a pro
forma basis, the combined assets and revenues of these companies for 1994
totaled $6.4 billion and $3.1 billion, respectively. In recognition of these
achievements, the Committee determined to increase Mr. Ebbers' base salary in
1995 to $850,000, an increase of 21% over his 1994 base salary. During 1995,
the Company's stock price increased from $19.44 to $35.25 per share, and the
Company increased significantly in size upon the completion of the WilTel
Acquisition. As of December 31, 1995, the Company had $6.6 billion in total
assets and $3.6 billion in revenues for the year ended December 31, 1995. In
recognition of these achievements, the Committee determined to increase Mr.
Ebbers' base salary in 1996 by 10% over his 1995 salary, to $935,000. The
<PAGE> 16
Committee established a maximum bonus under the Annual Plan for the Chief
Executive Officer for 1995 equal to $1,125,000. It established specific
performance goals for 1995 based on the attainment by the Company of specified
minimum gross revenues and adjusted earnings per share of Common Stock. The
Company achieved the performance goals, and the Committee determined to award
the Chief Executive Officer the entire bonus, based on the factors discussed
above.
In 1994, the Company also adopted the 1995 Plan which relates to a special
bonus for the Chief Executive Officer of the Company with respect to fiscal
year 1995. The bonus was in addition to any other bonus payable to the Chief
Executive Officer. The award of a bonus to the Chief Executive Officer under
the 1995 Plan was predicated on the achievement by the Company of one or more
performance goals during fiscal year 1995, as determined by the Committee. The
Committee established a maximum bonus under the 1995 Plan for the Chief
Executive Officer of $1,000,000, and a performance goal, based on specified
minimum gross revenues of the Company in any one month. The 1995 performance
goal was achieved and the Committee awarded Mr. Ebbers the entire bonus, based
on the factors discussed above.
During 1995, the Committee granted Mr. Ebbers options exercisable for an
aggregate of 450,000 shares of Common Stock, which become exercisable in three
equal annual installments beginning January 1, 1996 through January 1, 1998.
The Committee believes that options appropriately compose a significant portion
of compensation for the reasons set forth above. In evaluating the number of
options awarded, the Committee did not employ a formal valuation formula, but
compared the number of options to the numbers of options awarded by the peer
group companies.
Conclusion
The Committee intends to continue its practice of basing executive
compensation on stock price and other financial performance criteria in the
context of the telecommunications industry and the broader economy, and on its
qualitative evaluation of individual performance. Additionally, the Committee
is augmenting, as applicable to the person(s) involved, these components of the
compensation process with the quantitative measures of performance included in
the Annual Plan. The Committee believes that its compensation policies promote
the goals of attracting, motivating, rewarding and retaining talented
executives who will maximize value for the Company's shareholders.
THE COMPENSATION AND STOCK OPTION COMMITTEE
April 22, 1996
Through May 24, 1995: Stiles A. Kellett, Jr. (Chairman)
Danny M. Dunnaway
Silvia Kessel
May 25, 1995 to Present: Stiles A. Kellett, Jr. (Chairman)
Stuart Subotnick
Lawrence C. Tucker
<PAGE> 17
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS
The following graphs and tables compare cumulative five-year shareholder
returns (including reinvestment of dividends) on an indexed basis with the
Center for Research in Security Prices ("CRSP") Index for the Nasdaq Stock
Market (US Companies), the CRSP Index for Nasdaq Telecommunications Stocks (SIC
codes 4800 through 4899 - US and Foreign Companies) and the Standard & Poor's
500 Composite Stock Price Index (the"S&P 500"), the first reflecting LDDS-TN
returns prior to the Mergers and the second reflecting the returns applicable
to Resurgens prior to the Mergers. On March 25, 1996, Standard & Poor's
announced that the Company had been added to the S&P 500. Upon a shareholder's
written request to the Treasurer of the Company, the Company will promptly
provide the names of the companies included in the indices. These indices are
included for comparative purposes only and do not necessarily reflect
management's opinion that such indices are an appropriate measure of the
relative performance of the stock involved, and are not intended to forecast or
be indicative of possible future performance of the Common Stock.
<TABLE>
Comparison of Five Year-Cumulative Total Returns
Performance Graph for WoRldCom, Inc. (LDDS-TN Prior to 9/15/93)
[PERFORMANCE GRAPH]
<CAPTION>
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
WorldCom, Inc. ................................. 100.0 229.2 374.0 578.7 466.3 845.6
Nasdaq Stock Market (US Companies) ............. 100.0 160.5 186.8 214.5 209.7 296.6
Nasdaq Telecommunications Stocks
SIC 4800-4899 US & Foreign ................... 100.0 137.9 169.4 261.2 215.9 260.1
S&P 500 Stocks ................................. 100.0 130.7 140.7 154.4 156.5 215.4
- ---------------
<FN>
Notes:
A. The lines represent monthly index levels derived from compounded daily returns that include all
dividends.
B. The indexes are reweighted daily, using the market capitalization on the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading day, the preceding trading day
is used.
D. The index level for all series was set to $100.0 on 12/31/90.
</TABLE>
<PAGE> 18
<TABLE>
Comparison of Five Year-Cumulative Total Returns
Performance Graph for WorldCom, Inc.
<CAPTION>
12/31/90 12/31/91 12/31/92 12/31/93 12/31/94 12/31/95
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
WorldCom, Inc. ................................. 100.0 73.5 170.6 283.8 228.7 414.7
Nasdaq Stock Market (US Companies) ............. 100.0 160.5 186.8 214.5 209.7 296.6
Nasdaq Telecommunications Stocks
SIC 4800-4899 US & Foreign ................... 100.0 137.9 169.4 261.2 215.9 260.1
S&P 500 Stocks ................................. 100.0 130.7 140.7 154.4 156.5 215.4
- ---------------
<FN>
Notes:
A. The lines represent monthly index levels derived from compounded daily returns that include all
dividends.
B. The indexes are reweighted daily, using the market capitalization on the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a trading day, the preceding trading day
is used.
D. The index level for all series was set to $100.0 on 12/31/90.
E. Resurgens was used prior to and exchanged for WCOM ($46.50)/share) on 9/15/93
</TABLE>
<PAGE> 19
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the compensation of the named executive
officers of the Company for the three years ended December 31, 1995, including
compensation from LDDS-TN prior to the Mergers.
<TABLE>
<CAPTION>
Long Term
Compensation
------------
Annual Compensation Awards
-------------------------- ------------
Securities
Underlying
Options/ All Other
Name and Principal Position Year Salary ($) Bonus ($) SARs (#) Compensation ($)
- ------------------------------------------ ---- ------------ ------------ ------------ ----------------
<S> <C> <C> <C> <C> <C>
Bernard J. Ebbers 1995 860,000<F1> 2,125,000 450,000/0 4,500<F2>
President and 1994 711,000 750,000 100,000/0 4,500
Chief Executive Officer 1993 514,250 700,000 143,924/0 4,500
Charles T. Cannada 1995 281,600 55,000 37,500/0 4,500<F2>
Senior Vice President 1994 273,467 302,000 120,000/0 4,500
1993 250,000 75,000 47,974/0 4,500
Gregory A. LeVert 1995 450,115<F1> 100,000 0/0 1,040,000<F3>
Former President, 1994 25,577 250,000 200,000/0 0
Communication Services 1993 0 0 0/0 0
Scott D. Sullivan 1995 294,000 225,000 120,000/0 4,500<F2>
Chief Financial Officer 1994 147,584 250,000 105,000/0 4,500
and Secretary 1993 117,983 30,000 11,514/0 4,497
Roy A. Wilkens 1995 427,500<F1> 300,000 200,000/0 1,004,500<F4>
President and Chief 1994 0 0 0/0 0
Executive Officer, WilTel 1993 0 0 0/0 0
- ---------------
<FN>
<F1> Amounts shown include director's fees.
<F2> Matching contributions to the Company's 401(k) Plan.
<F3> Represents payment made to Mr. LeVert in connection with the termination of his employment with the
Company in December 1995. Mr. LeVert's stock options became immediately exercisable upon his
termination of employment.
<PAGE> 20
<F4> Includes $1,000,000 received by Mr. Wilkens in connection with the termination of certain contract
rights with Williams Telecommunications Group, Inc. and $4,500 in matching contributions to the
Company's 401(k) Plan. In connection with the WilTel Acquisition, the Company assumed the
employment agreement among Mr. Wilkens, Williams and Williams Telecommunications Group, Inc. (the
"Agreement"). The Agreement remains in effect for a continuous thirty (30) month term or until
terminated by either party in accordance therewith. Additionally, pursuant to the Agreement, Mr.
Wilkens currently receives an annual base salary of $450,000 (to be increased annually by at least
the percentage change in the Consumer Price Index) and participates in the Company's stock option
plan, annual incentive bonuses and benefit plans. Under the Agreement, Mr. Wilkens would have
received payments and benefits upon termination of employment under certain circumstances or a
change of control of the Company. Subsequent to the WilTel Acquisition, and in consideration of the
termination of certain contract rights to receive payments and benefits, WorldCom made aggregate
liquidated damage payments to Mr. Wilkens totalling $1,000,000.
</TABLE>
Option Grants in Last Fiscal Year
The following table sets forth information concerning stock option grants
made in the fiscal year ended December 31, 1995, to the individuals named in
the Summary Compensation Table. There were no grants of SARs to said
individuals during the year.
<TABLE>
<CAPTION>
Individual Grants Potential Realizable Value
- ----------------------------------------------------------------------------- at Assumed Annual Rates of
Number of Stock Price Appreciation
Securities for Option Term <F3>
Underlying % of Total --------------------------
Options Options Granted Exercise or
Granted (#) to Employees Base Price Expiration
Name <F1> in FY ($/Sh) <F2> Date 5% ($) 10% ($)
- ------------------ ------------ ---------------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Bernard J. Ebbers 450,000 7.2% 27.00 07/02/05 7,641,070 19,363,971
Charles T. Cannada 37,500 0.6% 27.00 07/02/05 636,756 1,613,664
Gregory A. LeVert -- -- -- -- -- --
Scott D. Sullivan 120,000 1.9% 27.00 07/02/05 2,037,619 5,163,726
Roy A. Wilkens 200,000 3.2% 20.69 01/04/05 2,602,366 6,594,906
- ---------------
<FN>
<F1> The options terminate on the earlier of their expiration date or ten years after grant or,
generally, immediately on termination for reasons other than retirement, disability, death or
without cause; three months after termination of employment on retirement; 12 months after
termination for disability, death or without cause; or upon the consummation of a specified change
of control transaction.
Mr. Ebbers' and Mr. Wilkens' options become exercisable in three equal annual installments beginning
January 1, 1996 through January 1, 1998. One-third of Mr. Cannada's options become exercisable on
January 1, 1997, with the remaining two-thirds becoming exercisable on January 1, 1998. One-sixth
of Mr. Sullivan's options became exercisable on January 1, 1996, with the remaining options becoming
exercisable in two equal annual installments on January 1, 1997 and on January 1, 1998.
<PAGE> 21
<F2> The exercise price may be paid in cash or, in the discretion of the Committee, by shares of Common
Stock already owned or to be issued pursuant to the exercise, valued at the closing quoted selling
price on the date of exercise, or a combination of cash and Common Stock.
<F3> The indicated 5% and 10% rates of appreciation are provided to comply with Securities and Exchange
Commission regulations and do not necessarily reflect the views of the Company as to the likely
trend in the stock price. Actual gains, if any, on stock option exercises and Common Stock holdings
will be dependent on, among other things, the future performance of the Common Stock and overall
stock market conditions. There can be no assurance that the amounts reflected in this table will be
achieved.
</TABLE>
Aggregated Option Exercises in Last Fiscal Year and FY-End Option Values
The following table sets forth information concerning the number and value
realized as to options exercised during 1995 and options held at December 31,
1995, by the individuals named in the Summary Compensation Table and the value
of those options held at such date. The options exercised were not exercised
as SARs and no SARs were held at year end. All options had exercise prices
lower than the fair market value of the Common Stock on December 31, 1995 ("in-
the-money" options).
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-The-Money Options at
Shares Options at FY-End (#) FY-End ($) <F2>
Acquired on Value -------------------------- ---------------------------
Name Exercise (#) Realized ($) <F1> Exercisable Unexercisable Exercisable Unexercisable
- ------------------ ------------ ----------------- ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Bernard J. Ebbers -- -- 387,848 450,000 7,858,670 3,712,500
Charles T. Cannada 51,812 983,965 127,974 77,500 2,243,201 1,004,175
Gregory A. LeVert -- -- 200,000 -- 3,474,000 --
Scott D. Sullivan 47,000 820,229 81,514 155,000 1,420,769 1,597,950
Roy A. Wilkens -- -- -- 200,000 -- 2,912,000
- ---------------
<FN>
<F1> Based upon the difference between the closing price on the date of exercise and the option exercise
price.
<F2> Based upon a price of $35.25 per share, which was the closing price of common stock on December 31,
1995.
</TABLE>
Compliance with Section 16 of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934 requires directors,
executive officers and 10% or greater shareholders of the Company ("Reporting
Persons") to file with the Securities and Exchange Commission initial reports
of ownership and reports of changes in ownership of equity securities of the
<PAGE> 22
Company. To the Company's knowledge, based solely on its review of the copies
of such reports furnished to the Company and written representations that
certain reports were not required, during the year ended December 31, 1995, all
Section 16(a) filing requirements applicable to Reporting Persons were complied
with, except that Mr. Galesi, Ms. Kessel, Mr. Kluge, Mr. LeVert and Mr.
Subotnick each filed one late report covering one transaction.
Certain Relationships and Related Transactions
On August 23, 1995, Metromedia converted its Series 1 Preferred Stock into
21,876,976 shares of Common Stock and exercised warrants to acquire 3,106,976
shares of Common Stock and sold its position of 30,849,976 shares of Common
Stock in a public offering. In connection with the preferred stock conversion,
the Company made a non-recurring payment of $15.0 million to Metromedia,
representing a discount to the minimal nominal dividends that would have been
payable on the Series 1 Preferred Stock prior to the September 15, 1996
optional call date of approximately $26.6 million (which amount included an
annual dividend requirement of $24.5 million plus accrued dividends to such
call date). The Company did not receive any proceeds from the sale of the
shares, but did receive approximately $33.7 million in proceeds from the
concurrent exercise of such warrants. In May 1995, Metromedia exercised its
right to purchase approximately 3.1 million shares of Common Stock for $30.7
million under purchase warrants. Metromedia is a Delaware general partnership,
of which the sole partners are a trust affiliated with Mr. Kluge and Mr.
Subotnick. Ms. Kessel and Messrs. Kluge and Subotnick are officers of
Metromedia. See "Item 1. Election of Directors - Information about Nominees
and Executive Officers."
MCC leased approximately 139,700 square feet of space for its East
Rutherford, New Jersey corporate headquarters, of which approximately 31,000
square feet is used by Metromedia. The Metromedia portion of the rent is
approximately $692,000 per year. The entire lease is for a 15-year period,
with various partial termination options. In addition, Metromedia guaranteed
all of MCC's obligations under the lease for the East Rutherford, New Jersey
headquarters. MCC also subleased or leased from Metromedia or affiliates of
Metromedia certain additional office space in Secaucus, New Jersey; New York,
New York; and Columbia, Maryland. The Company is currently evaluating these
properties and leases to determine what action it will take thereunder.
Pursuant to the terms of separate leases of microwave transmission
facilities, the Company as successor to MCC made rental payments in 1995 to
Metromedia in the amount of $17,941,000 and is obligated to make the following
estimated minimum payments to Metromedia over the remaining terms of the
leases, one of which expires in 1997 and the others expire in 2001: $18,353,000
(1996), $11,367,000 (1997), $4,040,000 (1998), $4,157,000 (1999), $4,218,000
(2000) and $2,132,000 (2001). In addition, at the end of the term of each of
the leases, the Company may purchase the equipment covered by such lease at a
price to be determined at such date in accordance with the provisions of each
lease.
MCC granted to InfoInteractive, Inc., an affiliate of Metromedia
("InfoInteractive"), rights and options to use certain of the 900 telephone
numbers under the control of MCC, now the Company. InfoInteractive uses such
numbers in connection with its offering of 900 number services. In return for
the assignment of the 900 numbers and the provision of certain billing and
collection services, InfoInteractive paid a fee to MCC. InfoInteractive also
agreed to pay a portion of MCC's actual installation costs incurred in
<PAGE> 23
connection with the assigned 900 numbers. MCC agreed to provide long distance
service in connection with InfoInteractive's 900 number service. MCC believed
that these agreements contained terms as favorable to MCC as could be
negotiated with nonaffiliated third parties. Subsequent to the Mergers, the
Company has continued these agreements.
MCC provided a 20% discount on its long distance services to Metromedia
employees, and such discount has continued for Metromedia employees who were
employed by Metromedia on September 15, 1993. In addition, MCC provided long
distance service to certain affiliates of Metromedia. MCC believed that these
services to the affiliates were provided on an arm's-length basis. The Company
has continued these agreements.
Compensation Committee Interlocks and Insider Participation
Subsequent to May 24, 1995, the members of the Company's Compensation and
Stock Option Committee have been Stiles A. Kellett, Jr. (Chairman), Stuart
Subotnick and Lawrence C. Tucker. The Compensation and Stock Option Committee
from May 31, 1994 to May 24, 1995 was composed of Stiles A. Kellett, Jr.
(Chairman), Danny M. Dunnaway and Silvia Kessel.
ITEM 2. APPROVAL OF AMENDMENT TO AMENDED AND RESTATED
ARTICLES OF INCORPORATION TO INCREASE AUTHORIZED SHARES OF COMMON STOCK
The Board of Directors has proposed an amendment to the Articles of
Incorporation (the "Amendment") and directed that the Amendment be submitted to
the shareholders for approval. The Amendment would increase the number of
authorized shares of Common Stock from 500,000,000 to 750,000,000.
The full text of the proposed resolution and Amendment related to Item 2 is
as follows:
"RESOLVED, that Section A of Article Four of the Amended and
Restated Articles of Incorporation of the Company be amended by
deleting said Section A in its entirety and substituting in lieu
thereof a new Section A of Article Four that reads as follows:
'A. Common Stock. The authorized voting common stock of the
Corporation is seven hundred fifty million (750,000,000) shares, par
value $.01 per share.'"
On April 4, 1996, there were ___________ shares of Common Stock issued and
outstanding. This number does not include _____________ shares reserved for
issuance under outstanding options and warrants to purchase shares of Common
Stock, 2,633,081 shares issuable upon conversion of the Series 2 Preferred
Stock, or 5,135,283 shares issuable upon conversion of the Company's $195.5
million 5% convertible subordinated notes due 2003, based upon the current
conversion prices thereunder. As of such date, therefore, there were ______
shares of authorized Common Stock not reserved for such purposes and available
for issuance. Holders of Common Stock and currently outstanding preferred
stock have no preemptive rights to acquire additional issuances of shares of
Common Stock or preferred stock. Additionally, there were 50,000,000 shares of
authorized preferred stock, of which 1,244,048 shares of Series 2 Preferred
Stock were outstanding.
<PAGE> 24
The Board of Directors has deemed it advisable and in the best interests of
the Company to amend Article Four of the Articles of Incorporation to increase
the authorized number of shares of Common Stock to 750,000,000. The purpose of
such increase is to place the Company in a position where it will continue to
have a sufficient number of shares of authorized and unissued Common Stock
which can be issued for or in connection with such corporate purposes as may,
from time to time, be considered advisable by the Board of Directors. Having
such shares available for issuance in the future will give the Company greater
flexibility and will allow such shares to be issued as determined by the Board
of Directors of the Company without the expense and delay of a special
shareholders' meeting to approve such additional authorized capital stock.
Such corporate purposes could include, without limitation: (a) issuance in
connection with any desirable acquisitions which may be presented to the
Company; (b) the payment of stock dividends or issuance pursuant to stock
splits; (c) the issuance of Common Stock upon exercise of options granted under
the Company's various stock option plans or in connection with other employee
benefit plans; and (d) the issuance of Common Stock upon the conversion of any
Preferred Stock, the exercise of warrants or the conversion of other securities
convertible into Common Stock which may be outstanding from time to time; and
(e) issuance in connection with an offering to raise capital for the Company.
The authorized shares of Common Stock in excess of those presently issued
will be available for issuance at such times and for such purposes as the Board
of Directors may deem advisable without further action by the Company's
shareholders, except as may be required by the Articles of Incorporation and
applicable laws and regulations. Any future issuance of shares will be subject
to the rights of holders of shares of any then outstanding preferred stock.
The Amendment, if adopted, may have the result of making it more difficult
for any persons or group of persons, other than the current principal
shareholders and management, to acquire control of the Company by expanding the
ability of the Company to issue shares and thereby dilute the voting power of
any person or group that might accumulate shares in order to attempt to effect
a change in control. Although the Amendment might have such effect, the
Amendment has been proposed by the Board of Directors for the reasons set forth
above and not for anti-takeover reasons. The Company is not aware of any
present effort to accumulate shares of Common Stock or to attempt to change
control of the Company. The Company has no present plan to issue additional
shares of Common Stock either to the current principal shareholders, the
directors, the executive officers or any other person or entity except under
the Company's stock option plans, pursuant to the conversion or exercise of
outstanding Preferred Stock, warrants and convertible securities or in
connection with acquisitions.
The Articles of Incorporation contain provisions (a) requiring a 70% vote
for approval of certain business combinations with certain 10% shareholders
unless approved by a majority of the continuing Board of Directors or certain
minimum price, procedural and other requirements are met; and (b) restricting
aggregate beneficial ownership of the capital stock of the Company by certain
foreign shareholders to 20% of the total outstanding capital stock, and
subjecting excess shares to redemption; and (c) requiring a two-thirds vote of
the holders of the Series 2 Preferred Stock to approve certain extraordinary
transactions or, alternatively, redemption of such stock at a specified
premium. In addition, the Bylaws of the Company (a) contain the requirement
regarding nomination by shareholders of persons for election as directors
summarized below under "Future Proposals of Security Holders," and (b) restrict
the calling of special meetings by shareholders to those owning not less than
<PAGE> 25
40% of the votes to be cast. These provisions may have an anti-takeover
effect.
If approved by the shareholders as hereinafter provided, the Amendment will
become effective upon the filing of articles of amendment relating thereto with
the Secretary of State of Georgia, which will occur as soon as reasonably
practicable following such approval. The approval of the Amendment requires a
majority of the votes entitled to be cast on the Amendment by the holders of
Common Stock and Series 2 Preferred Stock as a single class, with the holders
of Series 2 Preferred stock voting on an as-if-converted basis. Consequently,
any shares not voted on the Amendment (whether by abstention or broker non-
votes) will have the same effect as votes against the Amendment.
The Board of Directors recommends a vote "FOR" approval of the amendment.
ITEM 3. APPROVAL OF THE THIRD
AMENDED AND RESTATED 1990 STOCK OPTION PLAN
The Board of Directors has adopted certain amendments to the Company's
Second Amended and Restated 1990 Stock Option Plan and directed that the plan,
as amended, be submitted to the shareholders for approval. A copy of the
option plan as proposed to be amended is attached as Exhibit A to this Proxy
Statement, captioned "WorldCom, Inc. Third Amended and Restated 1990 Stock
Option Plan" (the "Option Plan") and the following description of the Option
Plan is qualified in its entirety by reference to Exhibit A.
The amendments would increase the number of shares that may be issued under
the Option Plan from 11,537,986 shares to 20,000,000 shares. This amendment is
intended to further the purpose of the Option Plan of enhancing the continued
success of the Company by providing management and key employees with an
increased personal interest in the Company. If the number of outstanding
shares of Common Stock are increased or decreased, or such shares are exchanged
for a different number or kind of shares of the Company through reorganization,
merger, stock dividend, stock split or other similar transaction, the aggregate
number of shares subject to the Option Plan or subject to options will be
appropriately and proportionately adjusted by the Compensation and Stock Option
Committee (the "Committee"). If any options granted under the Option Plan
terminate, expire or are surrendered without having been exercised in full, the
number of shares not purchased will again be available for grant.
The Option Plan is administered by the Committee, which determines the
grantees and terms of all options except the "Director Options" discussed
below. All directors and employees of the Company will be eligible to
participate in the Option Plan, provided that non-employee directors and
members of the Committee are only entitled to receive such Director Options, as
described below. The Company is unable to determine the number of individuals
who are likely to participate in the Option Plan. As of April 4, 1996, a total
of _____ individuals had received awards under the plan. An option enables the
employee or director ("Optionee") to purchase shares of Common Stock at a
specified exercise price. In order to comply with Section 162(m) ("Section
162(m)") of the Internal Revenue Code of 1986, as amended (the "Code"), the
amendments provide that no Optionee may be granted, during any calendar year,
options under the Option Plan to purchase more than 200,000 shares of Common
Stock that vest immediately or more than 600,000 shares of Common Stock,
including options with delayed vesting.
<PAGE> 26
Incentive stock options ("ISOs") and nonqualified stock options ("NQOs")
may be granted under the Option Plan. The exercise price per share of an ISO
may not be less than the fair market value of the Common Stock at the time the
option is granted, except in the case of an ISO awarded to a ten percent
shareholder, in which case the purchase price may not be less than 110% of the
fair market value. The exercise price per share of an NQO will be set from
time to time in the total discretion of the Committee. "Fair market value" is
generally the closing sales price of the Common Stock as reported by "The Wall
Street Journal". In order to obtain the shares, a participant must pay the
full exercise price to the Company at the time of exercise, together with an
amount equal to any taxes required to be withheld in connection with such
exercise. In the discretion of the Committee, the exercise price may be paid
in any combination of cash and/or Common Stock. No person may be granted ISOs
under the Option Plan that are first exercisable during any calendar year for
shares having an aggregate fair market value as of the date of grant of more
than $100,000.
ISOs and NQOs may be granted with terms of no more than ten years from the
date of grant, except in the case of an ISO awarded to a ten percent
shareholder, in which case the term may not exceed five years. Options will
survive for a limited period of time after the Optionee's death, disability or
normal retirement from the Company, as more fully described in Note 1 to the
table under the caption "Executive Compensation - Option Grants in Last Fiscal
Year" in this Proxy Statement. The Committee has the discretion to extend the
expiration of any options held by an Optionee whose service with the Company
has ceased for any reason up to the end of their original terms. No option may
be assigned or transferred other than by will or the laws of descent and
distribution.
The amendment would increase the annual awards of options for non-employee
directors to purchase 5,000 shares from 3,000 shares of Common Stock ("Director
Options"), during the term of the Option Plan on the first business day of July
in each year (prior to the proposed amendments, on the date of the regularly
scheduled Board meeting during the third quarter or, if no such meeting is
held, on the last business day of September). The terms of the Director
Options are described under the caption "Information Concerning Board of
Directors - Compensation of Directors" in this Proxy Statement.
ISOs are intended to qualify for favorable Federal income tax treatment
under Section 422 of the Code. An Optionee will not realize any income, nor
will the Company be entitled to a deduction, at the time an ISO is granted. If
an Optionee does not dispose of the shares acquired on the exercise of an ISO
within one year after the transfer of such shares to him or within two years
from the date the ISO was granted to him, for Federal income tax purposes: (a)
the Optionee will not recognize any income at the time of exercise of his ISO;
(b) the amount by which the fair market value of the shares at the time of
exercise exceeds the exercise price is an item of tax preference subject to the
alternative minimum tax on individuals; and (c) the difference between the
exercise price and the amount realized upon the sale of the shares by the
Optionee will be treated as long-term capital gain or loss. The Company will
not be entitled to a deduction upon the exercise of an ISO. Except in the case
of a disposition following the death of an Optionee and certain other very
limited exceptions, if the stock acquired pursuant to an ISO is not held for
the minimum periods described above, the excess of the fair market value of
the stock at the time of exercise over the amount paid for the stock generally
will be taxed as ordinary income to the Optionee in the year of disposition.
The Company is entitled to a deduction for Federal income tax purposes at the
<PAGE> 27
time and in the amount in which income is taxed to the Optionee as ordinary
income by reason of the sale of stock acquired upon the exercise of an ISO.
An Optionee will not realize any income at the time a NQO is granted, nor
will the Company be entitled to a deduction at that time. Upon exercise of a
NQO, the Optionee will recognize ordinary income (whether the exercise price is
paid in cash or by the surrender of previously owned Common Stock), in an
amount equal to the difference between the exercise price and the fair market
value of the shares to which the NQO pertains. In the discretion of the
Committee, the Optionee may authorize the Company to withhold shares of stock
to satisfy the Optionee's tax withholding liability incurred on exercise of the
option. The Company will be entitled to a tax deduction in an amount equal to
the amount of ordinary income realized by the Optionee.
Under the Option Plan, in the event of a "Change in Control" of the
Company, as defined below, then outstanding options will terminate upon the
consummation of such Change in Control (provided, such options may be exercised
simultaneously with such consummation to the extent otherwise exercisable,
giving effect to any acceleration thereof by reason of such consummation), and
the Committee will have discretion to accelerate the exercisability of
outstanding options prior to the Change in Control, unless an analogous plan is
continued for the Optionees by the successor entity with appropriate
adjustments as to number and kind of shares and option price. Prior to the
proposed amendments, the plan and any outstanding options would terminate on
the day before the consummation of the Change in Control transaction. A
"Change in Control" means (i) the dissolution or liquidation of the Company,
(ii) the reorganization, merger or consolidation of the Company as a result of
which the Company is not the surviving entity, (iii) the sale of substantially
all the assets of the Company, or (iv) the transfer of more than 80% of the
then outstanding shares of Common Stock to another entity or person.
The Option Plan will terminate on May 2, 2000. The Board of Directors may
amend or revise the Option Plan, provided that any amendment is required to be
approved by a majority of votes cast at a meeting of shareholders at which a
quorum representing a majority of the Common Stock is present in person or by
proxy if the amendment would (i) materially increase the benefits accruing to
participants under the Option Plan; (ii) increase the number of shares of
Common Stock which may be issued under the Option Plan, except as permitted
under paragraph 14 thereof; or (iii) materially modify the requirements as to
eligibility for participation in the Option Plan.
<PAGE> 28
The following table sets forth the options granted under the plan in 1995.
The closing price per share of the Company's Common Stock as reported on the
Nasdaq National Market on April 4, 1996 was $_________.
Name and Position Number of Shares (1) Exercise Price Per Share
- -------------------------- ------------------------- ------------------------
Bernard J. Ebbers 450,000 $27.00
President and Chief
Executive Officer
Charles T. Cannada 37,500 $27.00
Senior Vice President
Scott D. Sullivan 120,000 $27.00
Chief Financial Officer
and Secretary
Roy A. Wilkens 200,000 $20.69
President and Chief
Executive Officer, WilTel
Executive Group 807,500 $25.44 (2)
Non-Executive Director Group 27,000 $33.88
Non-Executive Officer Employee
Group 5,394,550 $25.29 (2)
- ---------------
(1) See Note 1 to "Executive Compensation - Option Grants in Last Fiscal Year"
in this Proxy Statement for a summary of the terms of the awards to
employees. The awards generally require a three year vesting period. See
"Information Concerning Board of Directors - Compensation of Directors" for
a summary of the terms of the awards to non-employee directors.
(2) Exercise prices are weighted averages of the actual exercise prices for
stock options granted to members of the groups.
The affirmative vote of a majority of the shares of Common Stock and
Series 2 Preferred Stock on an as-if-converted basis, voting as a single class,
represented in person or by proxy at a meeting where a quorum is present, is
required to adopt the Option Plan. A majority of the votes entitled to be cast
in the election constitutes a quorum. Shares voted to "abstain" will be
considered to be present for purposes of establishing a quorum and will have
the same effect as votes against the proposal. Shares as to which a broker
indicates it lacks authority to vote on Item 3 and which are not voted will be
considered not present for purposes of determining the existence of a quorum
and the requisite majority vote.
ITEM 4. APPROVAL OF THE WORLDCOM, INC.
SPECIAL PERFORMANCE BONUS PLAN
Under Section 162(m) of the Code, the Company, for federal income tax
purposes, generally may not deduct certain employee compensation that would
otherwise be deductible to the extent that such compensation exceeds $1,000,000
<PAGE> 29
for any such individual in any fiscal year. However, compensation that is
"performance based" (as defined in Section 162(m)) is not subject to the
deductibility limitations.
The Compensation and Stock Option Committee of the Company's Board of
Directors determined to develop an annual performance bonus plan for
implementation beginning in 1996, in addition to the existing Annual
Performance Plan approved by the shareholders in 1994 or any other plan of the
Company. Accordingly, the Committee has approved the adoption of the WorldCom,
Inc. Special Performance Bonus Plan (the "Special Bonus Plan") for the Chief
Executive Officer of the Company with respect to each of fiscal years 1996
through 1998, and has recommended that the Special Bonus Plan be submitted to
the shareholders for adoption. The Special Bonus Plan is designed to qualify
as a "performance-based" compensation plan for purposes of Section 162(m).
Cash bonuses under the Special Bonus Plan are predicated on the achievement
by the Company of one or more performance goals for such fiscal year. Subject
to attainment of the specified performance goal(s) and the limitations with
respect to the maximum bonus payable under the Special Bonus Plan, actual cash
awards under the Special Bonus Plan will be made based on the Committee's
subjective assessment of contributions of the Chief Executive Officer. The
Committee believes the Special Bonus Plan will enable the Company to continue
to motivate, reward and retain the Chief Executive Officer to promote the
financial performance and growth of the Company, without limiting the Company's
ability to deduct compensation awarded under the Special Bonus Plan for federal
income tax purposes.
A copy of the Special Bonus Plan is attached as Exhibit B to this Proxy
Statement. Following is a description of the material features of the Special
Bonus Plan, which is qualified in its entirety by reference to Exhibit B.
Administration. The Special Bonus Plan will be administered by the
Compensation and Stock Option Committee of the Company, such other committee as
may be designated by the Board of Directors of the Company or a subcommittee of
the committee involved as may be designated by said committee (hereinafter such
committee or subcommittee, as applicable, is referred to as the "Committee").
The Committee will be comprised solely of two or more outside directors of the
Company (as defined in Section 162(m)(4)(C)(i) of the Code and the regulations
thereunder). The Committee, subject to the approval of the full Board of
Directors, has complete discretion and authority with respect to the Special
Bonus Plan and its application. The Compensation and Stock Option Committee is
currently comprised of Stiles A. Kellett, Jr. (Chairman), Stuart Subotnick and
Lawrence C. Tucker. The Chief Executive Officer is the only employee eligible
to participate in the Special Bonus Plan.
Determination of Bonus. The award of a bonus to the Chief Executive
Officer under the Special Bonus Plan for each of fiscal years 1996, 1997 and
1998 is predicated on the achievement by the Company of one or more performance
goals during such fiscal year, as determined by the Committee. The Committee
will timely establish in writing for each such fiscal year (a) a maximum bonus
under the Special Bonus Plan for the Participant, which may not exceed
$1,000,000 with respect to fiscal year 1996 or the greater of $1,000,000 and
150% of the amount of any bonus paid or payable under the Special Bonus Plan
for the prior fiscal year with respect to fiscal years 1997 and 1998, and (b)
one or more performance goals which must be met as a precondition to the
payment of a bonus. Such goal(s) will be based on billings by the Company
under one or more service agreements with its customer(s). For 1996, the
<PAGE> 30
Committee has established performance criteria based upon certain billings by
the Company and has set the maximum bonus at $1,000,000.
The Committee will convene as and when appropriate to determine whether, in
fact, the previously established performance goal(s) has/have been met. The
Committee will certify in writing to the full Board of Directors whether the
performance goal(s) has/have been met prior to payment of any bonus.
If the Committee determines that the performance goal(s) has/have been met,
the Chief Executive Officer may receive a bonus under the Special Bonus Plan
which may not exceed the maximum amount established by the Committee.
Termination and Amendment. Subject to adoption of the Special Bonus Plan
by the shareholders, the Special Bonus Plan will be in effect through 1998 or
until terminated by the Committee, which it may do at any time. The Committee
also may amend the Special Bonus Plan from time to time, with or without
notice. Section 162(m) currently requires shareholder approval of certain
material amendments to the Special Bonus Plan, such as a change in the method
of determining the maximum amount of the participant's bonus and a change in
the class of persons eligible to participate in the Special Bonus Plan.
* * * * *
The Committee believes that the Special Bonus Plan establishes appropriate
objective guidelines for establishing special incentive compensation for the
Company's Chief Executive Officer, which qualifies as "performance-based"
compensation within the purview of Section 162(m). As noted in the "Report of
Compensation and Stock Option Committee on Executive Compensation" above, the
Committee will continue to consider qualitative or other factors not included
in the Special Bonus Plan in making executive compensation decisions, including
base salary and annual and long-term incentive award determinations.
The affirmative vote of a majority of the shares of Common Stock and Series
2 Preferred Stock on an as-if-converted basis, voting as a single class,
represented in person or by proxy at a meeting where a quorum is present, is
required to adopt the Special Bonus Plan. A majority of the votes entitled to
be cast in the election constitutes a quorum. Shares voted to "abstain" will
be considered to be present for purposes of establishing a quorum and will have
the same effect as votes against the proposal. Shares as to which a broker
indicates it lacks authority to vote on Item 4 and which are not voted will be
considered not present for purposes of determining the existence of a quorum
and the requisite majority vote.
The Board of Directors recommends a vote "FOR" adoption of the Special
Bonus Plan.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Arthur Andersen LLP ("Arthur Andersen") has been selected as the Company's
independent accountant for 1996. Representatives of Arthur Andersen are
expected to attend the annual meeting and will have the opportunity to make a
statement, if they so desire, and respond to appropriate questions from
shareholders.
<PAGE> 31
REPORT ON FORM 10-K
A copy of the Company's Report on Form 10-K for the period ended
December 31, 1995, filed with the Securities and Exchange Commission (including
related financial statements and schedules) is available to shareholders
without charge, upon written request to Scott D. Sullivan, Secretary, WorldCom,
Inc., 515 East Amite Street, Jackson, Mississippi 39201-2702.
FUTURE PROPOSALS OF SECURITY HOLDERS
All proposals of security holders intended to be presented at the 1997
annual meeting of shareholders must be received by the Company not later than
December 23, 1996, for inclusion in the Company's 1997 proxy statement and form
of proxy relating to the 1997 annual meeting. Upon timely receipt of any such
proposal, the Company will determine whether or not to include such proposal in
the proxy statement and proxy in accordance with applicable regulations and
provisions governing the solicitation of proxies.
Under the Bylaws of the Company, shareholders entitled to vote in the
election of directors may nominate one or more persons for election as
directors only if written notice of such shareholder's intent to make such
nomination or nominations has been given either by personal delivery or by
United States mail, postage prepaid, to the Secretary of the Company not later
than 90 days prior to the anniversary date of the immediately preceding annual
meeting. Such notice must set forth: (a) the name and address of the
shareholder who intends to make the nomination and of the person or persons to
be nominated; (b) a representation that the shareholder is a holder of record
of stock of the Company entitled to vote at such meeting and intends to appear
in person or by proxy at the meeting to nominate the person or persons
specified in the notice; (c) description of all arrangements or understandings
between the shareholder and each nominee and any other person or persons
(naming such person or persons) pursuant to which the nomination or nominations
are to be made by the shareholder; (d) such other information regarding each
nominee proposed by such shareholder as would be required to be included in a
proxy statement filed pursuant to the proxy rules of the Securities and
Exchange Commission; and (e) the consent of each nominee to serve as a director
of the Company if so elected.
OTHER BUSINESS
The Company knows of no business to be brought before the annual meeting
other than as set forth above. If other matters properly come before the
meeting, it is the intention of the persons named in the solicited proxy to
vote the proxy on such matters in accordance with their best judgment.
<PAGE> 32
MISCELLANEOUS
The Company will pay the cost of soliciting proxies in connection with the
1996 annual meeting. In addition to solicitation by use of the mails, certain
directors, officers and regular employees of the Company may solicit the return
of proxies by telephone, facsimile or other means, or personal interview, and
may request brokerage houses and custodians, nominees and fiduciaries to
forward soliciting material to their principals and will agree to reimburse
them for their reasonable out-of-pocket expenses. In addition, the Company may
retain Corporate Investor Communications, Inc. to assist with the solicitation
of proxies, the estimated cost of which would be $___________, plus expenses.
Shareholders are urged to mark, sign and send in their proxies without
delay.
By Order of the Board of Directors
Scott D. Sullivan
Secretary
Jackson, Mississippi
April 22, 1996
<PAGE> 33
Exhibit A
WORLDCOM, INC.
THIRD AMENDED AND RESTATED
1990 STOCK OPTION PLAN
1. Purpose of the Plan
The WorldCom, Inc. Third Amended and Restated 1990 Stock Option Plan (the
"Plan") is intended to provide additional incentive to certain valued and
trusted directors and employees of WorldCom, Inc., a Georgia corporation, and
its subsidiaries (WorldCom, Inc. and/or its subsidiaries, as the context may
require, is/are referred to herein as the "Company"), by encouraging them to
acquire shares of the $.01 par value Common Stock of the Company (the "Stock")
through options to purchase Stock granted pursuant to the Plan ("Options"),
thereby increasing such directors' and employees' proprietary interest in the
business of the Company and providing them with an increased personal interest
in the continued success and progress of the Company, the result of which will
promote both the interests of the Company and its shareholders.
Options granted under the Plan will be either options intended to qualify
as incentive stock options ("ISOs") within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), or non-qualified
options ("NQOs"). Each director or employee granted an Option (an "Optionee")
shall enter into an agreement with the Company (the "Option Agreement") setting
forth the terms and conditions of the Option, as determined in accordance with
this Plan.
2. Administration of Plan
This Plan shall be administered by the Compensation and Stock Option
Committee appointed by the Board of Directors of the Company (the "Committee"),
to be composed of at least three (3) members of the Board of Directors of the
Company who shall be appointed from time to time by the Board of Directors;
provided that so long as the Company is subject to the reporting requirements
of the Securities Exchange Act of 1934, as amended (the "1934 Act"), the
members of the Committee shall at all times when any Options are granted under
the Plan, be "disinterested persons" within the meaning of paragraph (c)(2)(i)
of Rule 16b-3, which has been adopted by the Securities and Exchange Commission
under the 1934 Act, or its equivalent rule as then in effect ("Rule 16b-3").
The Committee shall have the sole power:
a. subject to the provisions of the Plan, to determine the terms and
conditions of all Options; to construe and interpret the Plan and Options
granted under it; to determine the time or times an Option may be exercised,
the number of shares as to which an Option may be exercised at any one time,
and when an Option may terminate; to establish, amend and revoke rules and
regulations relating to the Plan and its administration; and to correct any
defect, supply any omission, or reconcile any inconsistency in the Plan, or in
any Option Agreement, in a manner and to the extent it shall deem necessary,
all of which determinations and interpretations made by the Committee shall be
conclusive and binding on all Optionees and on their legal representatives and
beneficiaries; and
b. to determine all questions of policy and expediency that may arise in
the administration of the Plan and generally exercise such powers and perform
such acts as are deemed necessary or expedient to promote the best interests of
the Company.
<PAGE> 34
3. Shares Subject to the Plan
Subject to the provisions of paragraph 14 below, the Stock which may be
issued pursuant to Options granted under the Plan shall not exceed in the
aggregate twenty million (20,000,000) shares (after giving effect to all stock
dividends paid on such stock through April 1, 1996). If any Options granted
under the Plan terminate, expire or are surrendered without having been
exercised in full, the number of shares of Stock not purchased under such
Options shall be available again for the purpose of the Plan.
4. Persons Eligible for Options
a. All directors and employees of the Company shall be eligible to
receive the grant of Options under the Plan. The Committee shall determine the
employees and directors to whom Options shall be granted, the time or times
such Options shall be granted, the type of Option to be granted, the number of
shares to be subject to each Option and the times when each Option may be
exercised; provided, however, no Optionee shall be granted during any calendar
year Options under the Plan to purchase more than 200,000 shares of Stock that
vest immediately or more than 600,000 shares of Stock including Options with
delayed vesting and no Options may be granted under the Plan to any director of
the Company who is not also an employee of the Company, or to any member of the
Committee, whether or not an employee of the Company, except under the
provisions of paragraph 5 below. An Optionee, if he or she is otherwise
eligible, may be granted additional Options. An employee or director may be
granted ISOs or NQOs or both under the Plan; provided, however, that the grant
of ISOs and NQOs to an employee or director shall be the grant of separate
Options and each ISO and each NQO shall be specifically designated as such in
accordance with the applicable provisions of the Department of Treasury
regulations.
b. With respect to the granting of ISOs only, no ISO will be granted to
an Optionee, and an attempted grant of such an ISO will be void, if the
aggregate Fair Market Value Per Share (as defined below), determined by the
Committee at the time an ISO is granted, of the Stock with respect to which the
ISO and previously granted ISOs are exercisable for the first time by such
Optionee during any calendar year (under all such plans of the Company) exceeds
$100,000.00.
5. Options to Directors
a. Anything to the contrary in the Plan notwithstanding, Options
("Director Options") to purchase 5,000 shares of Stock shall be granted to each
member of the Board of Directors who is not also an employee of the Company
each year during the term of the Plan on the first business day of July in each
year.
b. The purchase price of each share of Stock covered by a Director Option
shall be one hundred percent (100%) of the Fair Market Value Per Share (as
defined in paragraph 6 hereof) on the date the Director Option is granted.
c. The Director Options shall be fully exercisable from and after the
date of grant, and the duration thereof shall be the same as provided in
paragraph 7 hereof (except for subitem (iv) thereunder, which shall not apply
to Director Options).
d. All other provisions of the Plan not contradictory to the foregoing
shall apply to Director Options.
<PAGE> 35
6. Purchase Price
The purchase price of each share of Stock covered by each ISO shall not be
less than one hundred percent (100%) of the Fair Market Value Per Share (as
defined below) of the Stock on the date the ISO is granted; provided, however,
if when an ISO is granted the Optionee receiving the ISO owns or will be
considered to own by reason of Section 424(d) of the Code more than ten percent
(10%) of the total combined voting power of all classes of stock of the
Company, the purchase price of the Stock covered by such ISO shall not be less
than one hundred and ten percent (110%) of the Fair Market Value Per Share of
the Stock on the date the ISO is granted.
The purchase price of each share of Stock covered by each NQO shall be set
from time to time in the total discretion of the Committee.
"Fair Market Value Per Share" of the Stock shall mean: (i) if the Stock is
not publicly traded, the amount determined by the Committee on the date of the
grant of the Option; (ii) if the Stock is traded only otherwise than on a
securities exchange and is not quoted on the National Association of Securities
Dealers automated quotation system ("NASDAQ"), the closing quoted selling price
of the Stock on the date of grant of the Option as quoted in "pink sheets"
published by the National Daily Quotation Bureau; (iii) if the Stock is traded
only otherwise than on a securities exchange and is quoted on NASDAQ, the
closing quoted selling price of the Stock on the date of grant of the Option,
as reported by the Wall Street Journal; or (iv) if the Stock is admitted to
trading on a securities exchange, the closing quoted selling price of the Stock
on the date of grant of the Option, as reported in the Wall Street Journal.
For purposes of Items (i) through (iv) of this paragraph, if there were no
sales on the date of the grant of an Option, the Fair Market Value Per Share
shall be determined by the Committee in accordance with Section 20.2031-2 of
the Federal Estate Tax Regulations.
7. Duration of Options
Subject to earlier termination as provided herein, any outstanding Option
and all unexercised rights thereunder shall expire and terminate automatically
upon the earlier of (i) the cessation of the employment or engagement of the
Optionee by the Company for any reason other than retirement, death or
disability; (ii) the date which is three months following the effective date of
the Optionee's retirement from the Company's service; (iii) the date which is
one year following the date on which the Optionee's service with the Company
ceases due to death or disability; (iv) the date of expiration of the Option
determined by the Committee at the time the Option is granted; and (v) the
tenth (10th) annual anniversary date of the granting of the Option, or, if when
an ISO is granted the Optionee owns (or would be considered to own by reason of
Section 424(d) of the Code) more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company, then on the fifth (5th)
such anniversary; provided, however, that the Committee shall have the right,
but not the obligation, to extend the expiry of the Options held by an Optionee
whose service with the Company has ceased for any reason to a date up to the
end of their original terms, notwithstanding that such Options may no longer
qualify as ISOs under the Code.
8. Exercise of Options
a. An Option may be exercisable in installments or otherwise upon such
terms as the Committee shall determine when the Option is granted. As a
condition of the exercise, in whole or in part, of any Option, the Committee
<PAGE> 36
may require the Optionee to pay, in addition to the purchase price of the Stock
covered by the Option, an amount equal to any Federal, state and local taxes
that may be required to be withheld in connection with the exercise of such
Option. Notwithstanding the foregoing, the Committee may authorize the
Company's officers to establish procedures for the satisfaction of an
Optionee's withholding tax liability incurred upon exercise of an Option by
enabling the Optionee to authorize the Company to retain from the total number
of shares to be issued pursuant to such Option exercise that number of shares
(based on the then Fair Market Value Per Share as determined by the Committee)
that will satisfy the withholding tax due.
b. No Option will be exercisable (and any attempted exercise will be
deemed null and void) if such exercise would create a right of recovery for
"short-swing profits" under Section 16(b) of the 1934 Act.
9. Method of Exercise
a. When the right to purchase shares accrues, Options may be exercised by
giving written notice to the Company stating the number of shares for which the
Option is being exercised, accompanied by payment in full by cash, or its
equivalent, acceptable to the Company, of the purchase price for the shares
being purchased and, if applicable, any Federal, state or local taxes required
to be withheld in accordance with the provisions of paragraph 8 above. The
Company shall issue a separate certificate or certificates of Stock for each
Option exercised by an Optionee.
b. In the Committee's discretion, determined at the time the Option is
granted, payment of the purchase price for the shares may be made in whole or
in part with other shares of Stock of the Company which are free and clear of
all liens and encumbrances. The value of the shares of Stock tendered in
payment for the shares being purchased shall be the Fair Market Value Per Share
on the date of the Optionee's notice of exercise.
c. Notwithstanding the foregoing, the Company shall have the right to
postpone the time of delivery of the shares for such period as may be required
for the Company, with reasonable diligence, to comply with any applicable
listing requirements of any national securities exchange or the National
Association of Securities Dealers, Inc. or any Federal, state or local law. If
the Optionee, or other person entitled to exercise the Option, fails to timely
accept delivery of and pay for the shares specified in such notice, the
Committee shall have the right to terminate the Option with respect to such
shares.
10. Nontransferability of Options
No Option granted under the Plan shall be assignable or transferable by the
Optionee, either voluntarily or by operation of law, other than by will or the
laws of descent and distribution, and, during the lifetime of the Optionee,
shall be exercisable only by the Optionee.
11. Continuance of Employment
Nothing contained in the Plan or in any Option granted under the Plan shall
confer upon any Optionee any rights with respect to the continuation of
employment by the Company or interfere in any way with the right of the Company
(subject to the terms of any separate employment agreement to the contrary) at
any time to terminate such employment or to increase or decrease the
<PAGE> 37
compensation of the Optionee from the rate in existence at the time of the
granting of any Option.
12. Restrictions on Shares
If the Company shall be advised by counsel that certain requirements under
the Federal or state securities laws must be met before Stock may be issued
under this Plan, the Company shall notify all persons who have been issued
Options, and the Company shall have no liability for failure to issue Stock
under any exercise of Options because of delay while such requirements are
being met or the inability of the Company to comply with such requirements.
13. Privilege of Stock Ownership
No person entitled to exercise any Option granted under the Plan shall have
the rights or privileges of a shareholder of the Company for any shares of
Stock issuable upon exercise of such Option until such person has become the
holder of record of such shares. No adjustment shall be made for dividends or
other rights for which the record date is prior to the date on which such
person becomes the holder of record, except as provided in paragraph 14 below.
14. Adjustment
a. If the number of outstanding shares of Stock are increased or
decreased, or such shares are exchanged for a different number or kind of
shares or securities of the Company through reorganization, merger,
recapitalization, reclassification, stock dividend, stock split, combination of
shares, or other similar transaction, the aggregate number of shares of Stock
subject to the Plan as provided in paragraph 3 above, the maximum number of
Shares under Options that may be granted to an Optionee during any calendar
year specified in paragraph 4(a) above, and the shares of Stock subject to
issued and outstanding Options under the Plan shall be appropriately and
proportionately adjusted by the Committee. Any such adjustment in an
outstanding Option shall be made without change in the aggregate purchase price
applicable to the unexercised portion of the Option but with an appropriate
adjustment in the price for each share or other unit of any security covered by
the Option.
b. Notwithstanding subparagraph (a) of this paragraph, upon the
dissolution or liquidation of the Company, or upon a reorganization, merger or
consolidation of the Company with one or more corporations as a result of which
the Company is not the surviving corporation, or upon a sale of substantially
all of the assets of the Company or the transfer of more than 80% of the then
outstanding Stock of the Company to another entity or person, the Plan and any
Options granted under the Plan shall terminate upon the consummation of the
transaction (provided, such Options may be exercised effective simultaneously
with such consummation to the extent otherwise exercisable, giving effect to
any acceleration thereof by reason of such consummation), and the Committee
shall have the right, but shall not be obligated, to accelerate the time in
which any Option may be exercised prior to such termination, unless provision
shall be made in writing in connection with such transaction for the
continuance of the Plan, for the assumption of Options previously granted or
the substitution for such Options with new options to purchase the stock of a
successor corporation, or parent or subsidiary thereof, with appropriate
adjustments as to number and kind of shares and the option price, in which
event the Plan and Options previously granted shall continue in the manner and
under the terms so provided; provided, however, that the Committee or the Board
<PAGE> 38
of Directors shall have the authority to amend this paragraph to provide for a
requirement that a successor corporation assume any outstanding Options.
c. Adjustments under this paragraph shall be made by the Committee whose
determination as to what adjustments shall be made, and the extent thereof,
shall be final, binding and conclusive. No fractional shares of Stock shall be
issued under the Plan or in connection with any such adjustment.
15. Amendment and Termination of Plan
a. The Board of Directors of the Company, may, from time to time, with
respect to any shares at the time not subject to Options, suspend or terminate
the Plan or amend or revise the terms of the Plan; provided that any amendment
to the Plan shall be approved by a majority of votes cast at a meeting of
shareholders at which a quorum representing a majority of the Stock is present
in person or by proxy if the amendment would (i) materially increase the
benefits accruing to participants under the Plan; (ii) increase the number of
shares of Stock which may be issued under the Plan, except as permitted under
the provisions of paragraph 14 above; or (iii) materially modify the
requirements as to eligibility for participation in the Plan.
b. Subject to the provisions in paragraph 14 above, the Plan shall
terminate May 2, 2000, being ten (10) years from the date of the initial
adoption of the Plan (prior to its amendment and restatement) by the Board of
Directors.
c. Subject to the provisions in paragraph 14 above, no amendment,
suspension or termination of this Plan shall, without the consent of the
Optionee, alter or impair any rights or obligations under any Option granted to
such Optionee under the Plan.
d. Notwithstanding the foregoing, the provisions of paragraph 5 hereof
may not be amended more than once every six months other than to comport with
changes in the Code, the Employee Retirement Income Security Act of 1974, as
amended, or the rules and regulations thereunder.
16. Effective Date of Plan
The Plan shall become effective upon adoption by the Board of Directors of
the Company and approval by the Company's shareholders; provided, however, that
prior to approval of the Plan by the Company's shareholders but after adoption
by the Board of Directors, Options may be granted under the Plan subject to
obtaining such approval.
17. Term of Plan
No Option shall be granted pursuant to the Plan after May 2, 2000.
<PAGE> 39
Exhibit B
WORLDCOM, INC.
SPECIAL PERFORMANCE BONUS PLAN
I. Purpose.
The WorldCom, Inc. Special Performance Bonus Plan (the "Plan") is
established to provide a special bonus for the Chief Executive Officer (the
"Participant") of WorldCom, Inc. (the "Company") with respect to each of fiscal
years 1996, 1997 and 1998. Any such bonus shall be in addition to any other
bonus payable to the Participant. The efficacy of this Plan and the payment of
any bonus hereunder are expressly contingent on approval of the Plan by the
shareholders of the Company.
II. Administration: Eligibility.
The Plan will be administered by the Compensation and Stock Option
Committee of the Company, such other committee as may be designated by the
Board of Directors of the Company or a subcommittee of the committee involved
as may be designated by said committee (hereinafter such committee or
subcommittee, as applicable, is referred to as the "Committee"). The Committee
shall be comprised solely of two or more outside directors of the Company (as
defined in Section 162(m)(4)(C)(i) of the Internal Revenue Code of 1986, as
amended, and the regulations thereunder). The Committee, subject to the
approval of the full Board of Directors, has complete discretion and authority
with respect to the Plan and its application. The Participant is the only
employee eligible to participate in the Plan.
III. Determination of Bonus.
The award of a bonus to the Participant under the Plan for each of fiscal
years 1996, 1997 and 1998 is predicated on the achievement by the Company of
one or more performance goals during such fiscal year, as determined by the
Committee. The Committee shall timely establish in writing for each such
fiscal year (a) a maximum bonus under the Plan for the Participant, which shall
not exceed $1,000,000 with respect to fiscal year 1996 or the greater of
$1,000,000 and 150% of the amount of any bonus paid or payable hereunder for
the prior fiscal year with respect to fiscal years 1997 and 1998, and (b) one
or more performance goals which must be met as a precondition to the payment of
a bonus. Such goal(s) shall be based on billings by the Company under one or
more service agreements with its customer(s).
The Committee shall convene as and when appropriate to determine whether,
in fact, the previously established performance goal(s) has/have been met. The
Committee shall certify in writing to the full Board of Directors whether the
performance goal(s) has/have been met prior to payment of any bonus.
If the Committee determines that the performance goal(s) has/have been met,
the Participant may receive a bonus under the Plan which shall not exceed the
maximum amount established by the Committee.
All determinations of billings shall be derived from invoices sent by the
Company.
IV. Amount and Distribution of the Bonus.
After certifying that the performance goal or goals has or have been met,
the Committee will then decide whether the Participant will receive his maximum
<PAGE> 40
bonus under the Plan or some lesser amount (or no bonus at all). Except as
other provided herein, the Committee's decision regarding the amount of the
Participant's bonus shall be made in the sole discretion of the Committee.
Distribution of the bonus determined under the preceding paragraph shall be
made as soon as practicable after the Committee's certification described in
Article III, above; provided that any bonus hereunder with respect to fiscal
year 1996 shall not be payable until after September 15, 1996. All bonuses
hereunder shall be payable in cash.
V. Miscellaneous Provisions.
1. Nothing contained herein will confer upon the Participant the right to
be retained in the service of the Company or any subsidiary thereof nor limit
the right of the Company or any subsidiary thereof to discharge or otherwise
deal with the Participant without regard to the existence of the Plan.
2. The Plan shall at all times be entirely unfunded and no provision
shall at any time be made with respect to segregating assets of the Company or
any subsidiary thereof for payment of any bonus hereunder. Neither the
Participant nor any other person shall have any interest in any particular
assets of the Company or any subsidiary thereof by reason of the right to
receive a bonus under the Plan and the Participant and any other person shall
have only the rights of a general unsecured creditor of the Company or any
subsidiary thereof with respect to any rights under the Plan.
3. This Plan shall be binding upon and inure to the benefit of the
Company and its successors and assigns.
4. This Plan, and the rights and obligations of the parties hereunder,
shall be governed by and construed in accordance with the internal laws of the
State of Mississippi.
5. The Company reserves the right to terminate the Plan in its entirety
at any time, with or without notice, or to amend the Plan as it exists from
time to time, with or without notice, through resolution of the Committee.
IN WITNESS WHEREOF, the Compensation and Stock Option Committee of the
Company has adopted this Plan as of March 1, 1996.
WORLDCOM, INC. COMPENSATION AND STOCK
OPTION COMMITTEE
By: /s/ Stiles A. Kellett, Jr.
-----------------------------------------
Stiles A. Kellett, Jr., Chairman
<PAGE> 41
ANNEX A
FORM OF PROXY CARD
[FRONT OF CARD]
PROXY
WORLDCOM, INC.
515 East Amite Street
Jackson, Mississippi 39201-2702
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Annual Meeting of Shareholders, May 23, 1996
The undersigned hereby appoints Bernard J. Ebbers and Scott D. Sullivan,
and each of them, with full power of substitution, the true and lawful
attorneys in fact, agents and proxies of the undersigned to vote at the Annual
Meeting of Shareholders of WorldCom, Inc. (the "Company"), to be held on
Thursday, May 23, 1996, commencing at 10:00 a.m. local time, at the corporate
office of the Company, 515 East Amite Street, Jackson, Mississippi 39201-2702,
and at any and all adjournments thereof, according to the number of votes which
the undersigned would possess if personally present, for the purposes of
considering and taking action upon the following, as more fully set forth in
the Proxy Statement of the Company dated April 22, 1996.
1. ELECTION OF DIRECTORS:
[ ] FOR all nominees listed below, as applicable (except as marked to the
contrary below)
[ ] WITHHOLD AUTHORITY (to vote for ALL nominees listed below)
Carl J. Aycock, Max E. Bobbitt, Bernard J. Ebbers, Francesco Galesi,
Stiles A. Kellett, Jr., Silvia Kessel, John W. Kluge, John A. Porter,
Stuart Subotnick, Scott D. Sullivan, Lawrence C. Tucker and Roy A. Wilkens.
(INSTRUCTION: To withhold authority to vote for any individual nominee, write
that nominee's name on the line provided below.)
- -------------------------------------------------------------------------------
2. Proposal to amend the Company's Amended and Restated Articles of
Incorporation to increase the number of authorized shares of common stock,
par value $.01 per share, from 500,000,000 to 750,000,000.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to approve the Company's Third Amended and Restated 1990 Stock
Option Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Continued on reverse side)
<PAGE> 42
[BACK OF CARD]
4. Proposal to approve the Company's Special Performance Bonus Plan
[ ] FOR [ ] AGAINST [ ] ABSTAIN
5. In their discretion with respect to such other business as properly may
come before the meeting or any adjournments thereof.
THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE,
THIS PROXY WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES UNDER PROPOSAL 1,
FOR PROPOSAL 2, FOR PROPOSAL 3, FOR PROPOSAL 4 AND IN THE PROXIES'
DISCRETION WITH RESPECT TO PROPOSAL 5.
Dated: ________________________________, 1996.
--------------------------------------------------
Signature
--------------------------------------------------
Signature if held jointly
Please sign exactly as name(s) appear on this
proxy card. When shares are held by joint
tenants, both should sign. When signing as
attorney-in-fact, executor, administrator,
personal representative, trustee or guardian,
please give full title as such. If a corporation,
please sign in full corporate name by President or
other authorized officer. If a partnership,
please sign in partnership name by authorized
person.
PLEASE PROMPTLY MARK, DATE, SIGN AND RETURN THIS PROXY CARD
USING THE ENCLOSED ENVELOPE.
