<PAGE> 1
As filed with the Securities and Exchange Commission on August 17, 1999
Registration No. _________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
-----------------------
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
-----------------------
MCI WORLDCOM, INC.
(Exact name of registrant as specified in its charter)
GEORGIA 58-1521612
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
500 CLINTON CENTER DRIVE
CLINTON, MISSISSIPPI 39056
(Address, including zip code,
of registrant's principal executive offices)
MCI WORLDCOM, INC. 1999 STOCK OPTION PLAN
- --------------------------------------------------------------------------------
(Full title of the plan(s))
P. BRUCE BORGHARDT, ESQ.
MCI WORLDCOM, INC.
10777 SUNSET OFFICE DRIVE, SUITE 330
ST. LOUIS, MISSOURI 63127
(314) 909-4100
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-------------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
================================================================================================================================
Proposed maximum Proposed maximum
Title of securities to be offering price per aggregate offering Amount of registration
registered Amount to be registered share(1) price(1) fee
============================== ======================== ====================== ======================== ========================
<S> <C> <C> <C> <C>
Common stock, $0.01 par 75,000,000
value, and associated shares(3) $75.7188 $5,678,910,000 $1,578,737
preferred stock purchase
rights(2)
============================== ======================== ====================== ======================== ========================
</TABLE>
- -------------
(1) Computed pursuant to Rule 457(c) and Rule 457(h) solely for the purpose
of determining the registration fee. Proposed maximum offering price
represents the average high and low reported market prices of the
Registrant's Common Stock on August 10, 1999 with respect to securities
for which options have not been granted.
(2) Each share of Common Stock also represents one preferred stock purchase
right. Preferred stock purchase rights cannot trade separately from the
underlying common stock and, therefore, do not carry a separate price
or necessitate an additional filing fee.
(3) This Registration Statement also covers such additional shares of
Common Stock as may be issuable pursuant to antidilution provisions.
<PAGE> 2
PART II
INFORMATION REQUIRED IN THE
REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed with the Securities and Exchange
Commission (the "Commission") by MCI WORLDCOM, Inc. ("MCI WorldCom" or the
"Company") (formerly Resurgens Communications Group, Inc.) under File No.
000-11258 (formerly File No. 1-10415, in the case of Resurgens) pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act") are
incorporated herein by reference and shall be deemed to be a part hereof.
1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 (the "MCI WorldCom 1998 Form 10-K");
2. The Company's Quarterly Report on Form 10-Q for the quarterly
periods ended March 31, 1999 and June 30, 1999;
3. MCI WorldCom's Current Report on Form 8-K/A dated August 26, 1996
(filed December 19, 1997), Form 8-K/A-3 dated November 9, 1997
(filed May 28, 1998) and Form 8-K dated July 12, 1999 (filed July
12, 1999)
4. The description of the Company's (formerly Resurgens') Common Stock
as contained in Item 1 of Resurgens' Registration Statement on Form
8-A dated December 12, 1989, as updated by the descriptions
contained in the Company's Registration Statement on Form S-4 (File
No. 333-16015), as declared effective by the Commission on November
14, 1996, which includes the Joint Proxy Statement/Prospectus dated
November 14, 1996 with respect to the Company's Special Meeting of
Shareholders held on December 20, 1996, under the following
captions: "Description of WorldCom Capital Stock" and "Comparative
Rights of Shareholders" and the descriptions contained in the
Company's Proxy Statement dated April 23, 1999 under the following
captions: "Approval of Amendment to Second Amended and Restated
Articles of Incorporation, as Amended, To Increase Authorized
Shares of Common Stock" and "Future Proposals of Security Holders."
5. The description of the Company's Preferred Stock Purchase Rights
contained in the Company's Registration Statement on Form 8-A dated
August 26, 1996, as updated by the Company's Current Report on Form
8-K dated May 22, 1997 (filed June 6, 1997); and
6. The description of the Company's Series B Convertible Preferred
Stock contained in the Company's Registration Statement on Form 8-A
dated November 13, 1996.
All documents filed by MCI WorldCom with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, as amended, subsequent
to the date hereof and prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference into this Registration Statement and to be a part hereof from the date
of filing of such documents. Any statement contained in a document incorporated
or deemed to be incorporated herein by reference, shall be deemed to be modified
or superseded for purposes of this Registration Statement to the extent that a
statement contained herein or in any other subsequently filed document
incorporated or deemed to be incorporated by reference, which statement is also
incorporated herein by reference, modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Registration Statement or
the prospectus.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
2
<PAGE> 3
ITEM 5. INTEREST OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 14-2-202(b)(4) of the Georgia Business Corporation Code (the
"Georgia Code") provides that corporation's articles of incorporation may
include a provision that eliminates or limits the personal liability of
directors for monetary damages to the corporation or its shareholders for any
action taken, or any failure to take any action, as a director, provided,
however, that the Section does not permit a corporation to eliminate or limit
the liability of a director for appropriating, in violation of his or her
duties, any business opportunity of the corporation, for acts or omissions
including intentional misconduct or a knowing violation of law, receiving from
any transaction an improper personal benefit, or voting for or assenting to an
unlawful distribution (whether as a dividend, stock repurchase or redemption, or
otherwise) as provided in Section 14-2-832 of the Georgia Code. Section
14-2-202(b)(4) also does not eliminate or limit the rights of the Company or any
shareholder to seek an injunction or other nonmonetary relief in the event of a
breach of a director's duty to the corporation and its shareholders.
Additionally, Section 14-2-202(b)(4) applies only to claims against a director
arising out of his or her role as a director, and does not relieve a director
from liability arising from his or her role as an officer or in any other
capacity.
The provisions of Article Ten of the Company's Second Amended and
Restated Articles of Incorporation, as amended, are similar in all substantive
respects to those contained in Section 14-2-202(b)(4) of the Georgia Code as
outlined above. Article Ten further provides that the liability of directors of
the Company shall be limited to the fullest extent permitted by amendments to
Georgia law.
Sections 14-2-850 to 14-2-859, inclusive, of the Georgia Code govern
the indemnification of directors, officers, employees, and agents. Section
14-2-851 of the Georgia Code permits indemnification of a director of the
Company for liability incurred by him or her in connection with any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative and whether formal or informal (including,
subject to certain limitations, civil actions brought as derivative actions by
or in the right of the Company) in which he or she is made a party by reason of
being a director of the Company and of directors who, at the request of the
Company, act as directors, officers, partners, trustees, employees or agents of
another foreign or domestic corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise. The Section permits indemnification
if the director acted in good faith and reasonably believed (a) in the case of
conduct in his or her official capacity, that such conduct was in the best
interests of the corporation, (b) in all other cases other than a criminal
proceeding that such conduct was at least not opposed to the best interests of
the corporation, and (c) in the case of a criminal proceeding, that he or she
had no reasonable cause to believe his or her conduct was unlawful. If the
required standard of conduct is met, indemnification may include judgments,
settlements, penalties, fines or reasonable expenses (including attorneys' fees)
incurred with respect to a proceeding.
A Georgia corporation may not indemnify a director under Section
14-2-851: (i) in connection with a proceeding by or in the right of the
corporation, except for reasonable expenses incurred by such director in
connection with the proceeding provided it is determined that such director met
the relevant standard of conduct set forth above, or (ii) in connection with any
proceeding with respect to conduct for which such director was adjudged liable
on the basis that he or she received an improper personal benefit.
Prior to indemnifying a director under Section 14-2-851 of the Georgia
Code, a determination must be made that the director has met the relevant
standard of conduct. Such determination must be made by: (i) a majority vote of
a quorum consisting of disinterested directors; (ii) a duly designated committee
of disinterested directors; (iii) duly selected special legal counsel; or (iv) a
vote of the shareholders, excluding shares owned by or voted under the control
of directors who do not qualify as disinterested directors.
A Georgia corporation may, before final disposition of a proceeding,
advance funds to pay for or reimburse the reasonable expenses incurred by a
director who is a party to a proceeding because he or she is a director,
3
<PAGE> 4
provided that such director delivers to the corporation a written affirmation of
his or her good faith belief that he or she met the relevant standard of conduct
described in Section 14-2-851 of the Georgia Code, or that the proceeding
involves conduct for which such director's liability has been properly
eliminated by action of the corporation, and a written undertaking by the
director to repay any funds advanced if it is ultimately determined that such
director was not entitled to such indemnification. Section 14-2-852 of the
Georgia Code provides that directors who are successful with respect to any
claim brought against them, which claim is brought because they are or were
directors of the Company, are entitled to mandatory indemnification against
reasonable expenses incurred in connection therewith.
The Georgia Code also allows a Georgia corporation to indemnify
directors made a party to a proceeding without regard to the above-referenced
limitations, if authorized by the articles of incorporation or a bylaw,
contract, or resolution duly adopted by a vote of the shareholders of the
corporation by a majority of votes entitled to be cast, excluding shares owned
or voted under the control of the director or directors who are not
disinterested, and to advance funds to pay for or reimburse reasonable expenses
incurred in the defense thereof, subject to restrictions similar to the
restrictions described in the preceding paragraph; provided, however, that the
corporation may not indemnify a director adjudged liable (1) for any
appropriation, in violation of his or her duties, of any business opportunity of
the Company, (2) for acts or omissions which involve intentional misconduct or a
knowing violation of law, (3) for unlawful distributions under Section 14-2-832
of the Georgia Code, or (4) for any transaction in which the director obtained
an improper personal benefit.
Section 14-2-857 of the Georgia Code provides that an officer of the
Company (but not an employee or agent generally) who is not a director has the
mandatory right of indemnification granted to directors under Section 14-2-852,
as described above. In addition, the Company may, as provided by either the
Company's Second Amended and Restated Articles of Incorporation, as amended, the
Company's Restated Bylaws, general or specific actions by its board of
directors, or by contract, indemnify and advance expenses to an officer,
employee or agent who is not a director to the extent that such indemnification
is consistent with public policy.
The indemnification provisions of Article X of the Company's Restated
Bylaws and Article Twelve of the Company's Second Amended and Restated Articles
of Incorporation, as amended, are consistent with the foregoing provisions of
the Georgia Code. However, the Company's Second Amended and Restated Articles of
Incorporation, as amended, prohibit indemnification of a director who did not
believe in good faith that his or her actions were in, or not opposed to, the
Company's best interests, or to have improperly received a personal benefit, or
in the case of a criminal proceeding, if such director had reasonable cause to
believe his or her conduct was unlawful, or in the case of a proceeding by or in
the right of the Company, in which such director was adjudged liable to the
Company, unless a court shall determine that the director is fairly and
reasonably entitled to indemnification in view of all the circumstances. The
Company's Restated Bylaws extend the indemnification available to officers under
the Georgia Code to employees and agents.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
Reference is made to the Exhibit Index.
ITEM 9. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
registration statement:
4
<PAGE> 5
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of
1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the registration statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the registration
statement. Notwithstanding the foregoing,
any increase or decrease in volume of
securities offered (if the total dollar
value of securities offered would not exceed
that which was registered) and any deviation
from the low or high end of the estimated
maximum offering range may be reflected in
the form of prospectus filed with the
Commission pursuant to 424(b) if, in the
aggregate, the changes in volume and price
represent no more than a 20 percent change
in the maximum aggregate offering price set
forth in the "Calculation of Registration
Fee" table in the effective registration
statement;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i)
and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 or
Form S-8, and the information required to be
included in a post-effective amendment by
those paragraphs is contained in periodic
reports filed with or furnished to the
Commission by the registrant pursuant to
Section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are
incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offerings of such securities
at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Act and is
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than payment by the registrant or expenses incurred or
paid by a director, officer, or controlling person of the registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
5
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Clinton, State of Mississippi on August 17, 1999.
MCI WORLDCOM, INC.
By: /s/ Scott D. Sullivan
--------------------------
Scott D. Sullivan
Chief Financial Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints Bernard J. Ebbers, Scott D. Sullivan, and Charles T. Cannada, and each
of them (with full power to each of them to act alone), his true and lawful
attorneys in fact and agents for him and on his behalf and in his name, place
and stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to file the same,
with exhibits and any and all other documents filed with respect thereto, with
the Securities and Exchange Commission (or any other governmental or regulatory
authority), granting unto said attorneys, and each of them, full power and
authority to do and to perform each and every act and thing requisite and
necessary to be done in and about the premises in order to effectuate the same
as fully to all intents and purposes as he himself might or could do if
personally present, hereby ratifying and confirming all that said attorneys in
fact and agents, or any of them, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Name Title Date
- ---- ----- ----
<S> <C> <C>
/s/ Clifford L. Alexander, Jr. Director August 17, 1999
- ------------------------------
Clifford L. Alexander, Jr.
/s/ James C. Allen Director August 17, 1999
- ------------------
James C. Allen
/s/ Judith Areen Director August 17, 1999
- ----------------
Judith Areen
/s/ Carl J. Aycock Director August 17, 1999
- ------------------
Carl J. Aycock
/s/ Max E. Bobbitt Director August 17, 1999
- ------------------
Max E. Bobbitt
/s/ Bernard J. Ebbers Director, President and August 17, 1999
- --------------------- Chief Executive Officer
Bernard J. Ebbers (Principal Executive Officer)
</TABLE>
6
<PAGE> 7
<TABLE>
<S> <C> <C>
/s/ Francesco Galesi Director August 17, 1999
- --------------------
Francesco Galesi
/s/ Stiles A. Kellett, Jr. Director August 17, 1999
- --------------------------
Stiles A. Kellett, Jr.
/s/ Gordon S. Macklin Director August 17, 1999
- ---------------------
Gordon S. Macklin
/s/ John A. Porter Director August 17, 1999
- ------------------
John A. Porter
/s/ Timothy F. Price Director August 17, 1999
- --------------------
Timothy F. Price
/s/ Bert C. Roberts, Jr. Chairman of the Board August 17, 1999
- ------------------------
Bert C. Roberts, Jr.
/s/ John W. Sidgmore Director August 17, 1999
- --------------------
John W. Sidgmore
/s/ Scott D. Sullivan Director and Chief Financial August 17, 1999
- --------------------- Officer (Principal Financial
Scott D. Sullivan Officer and Principal
Accounting Officer)
/s/ Lawrence C. Tucker Director August 17, 1999
- ----------------------
Lawrence C. Tucker
/s/ Juan Villalonga Director August 17, 1999
- -------------------
Juan Villalonga
</TABLE>
7
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
4.1 Second Amended and Restated Articles of Incorporation
of MCI WORLDCOM, Inc. (including preferred stock
designations) as amended as of May 20, 1999
(incorporated herein by reference to Exhibit 4.1 to
the Company's Quarterly Report on Form 10-Q for the
quarterly period ended June 30, 1999) (File No.
0-11258)
4.2 Restated Bylaws of MCI WORLDCOM, Inc. (incorporated
herein by reference to Exhibit 3.2 to the Company's
Current Report on Form 8-K dated September 14, 1998)
(filed September 29, 1998)) (File No. 0-11258)
4.3 Rights Agreement dated as of August 25, 1996 between
the Company and The Bank of New York, which includes
the form of Certificate of Designations, setting
forth the terms of the Series 3 Junior Participating
Preferred Stock, par value $.01 per share, as Exhibit
A, the form of Rights Certificate as Exhibit B and
the Summary of Preferred Stock Purchase Rights as
Exhibit C (incorporated herein by reference to
Exhibit 4 to the Current Report on Form 8-K dated
August 26, 1996 (as amended on Form 8 K/A filed
August 31, 1996) filed by the Company with the
Securities and Exchange Commission on August 26, 1996
(as amended on Form 8 K/A filed on August 31, 1996)
(File No. 0-11258))
4.4 Amendment No. 1 to Rights Agreement dated as of May
22, 1997 by and between MCI WORLDCOM, Inc. and The
Bank of New York, as Rights Agreement (incorporated
herein by reference to Exhibit 4.2 of the Company's
Current Report on Form 8-K dated May 22, 1997 (filed
June 5, 1997))
5.1 Opinion of P. Bruce Borghardt as to the legality of
the Securities to be issued
10.1 MCI WORLDCOM, Inc. 1999 Stock Option Plan
(compensatory Plan)
23.1 Consent of Arthur Andersen LLP
23.2 Consent of PricewaterhouseCoopers LLP
23.3 Consent of KPMG LLP
23.4 Consent of Arthur Andersen LLP
23.5 Consent of P. Bruce Borghardt (included in Exhibit
5.1)
24.1 Power of Attorney (included in Signature Pages)
</TABLE>
<PAGE> 1
EXHIBIT 5.1
August 17, 1999
Board of Directors of
MCI WORLDCOM, Inc.
500 Clinton Center Drive
Clinton, Mississippi 39056
Ladies and Gentlemen:
I am General Counsel - Corporate Development of MCI WORLDCOM,
Inc., a Georgia corporation (the "Company"), and am familiar with the
Registration Statement on Form S-8 (the "Registration Statement") to be
filed by the Company with the Securities and Exchange Commission (the
"Commission") under the securities Act of 1933, as amended (the "Act"),
with respect to 75,000,000 shares (the "Shares") of Common Stock, par
value $.01, of the Company ("Common Stock") which are to issued upon
exercise of options granted under the MCI WORLDCOM, Inc. 1999 Stock
Option Plan (the "Plan").
In connection herewith, I have examined and relied without
investigation as to matters of fact upon the Registration Statement,
the Second Amended and Restated Articles of Incorporation, as amended,
and the Restated Bylaws of the Company, certificates, statements and
results of inquiries of public officials and other officers and
representatives of the Company, and such other documents, corporate
records, certificates, opinions and instruments as I have deemed
necessary or appropriate to enable me to render the opinions expressed
herein. I have assumed the genuineness of all signatures on all
documents examined by me, the legal competence and capacity of each
person that executed documents, the authenticity of all documents
submitted to me as originals, and the conformity to authentic originals
of all documents submitted to me as certified or photostatic copies. I
have also assumed the due authorization, execution and delivery of all
documents.
Based upon the foregoing, and in reliance thereon and subject
to the qualifications, exceptions and limitations stated herein, I am
of the opinion that when the Registration Statement, including any
amendments thereto, shall have become effective under the Act, and the
Shares have been issued in accordance with the terms of the Plan, then
the Shares will be validly issued, fully paid and nonassessable.
This opinion is not rendered with respect to any laws other
than the latest codification of the Georgia Business Corporation Code
available to me. This opinion has not been prepared by an attorney
admitted to practice in Georgia.
I hereby consent to the filing of this opinion as Exhibit 5.1
to the aforesaid Registration Statement on Form S-8. I also consent to
your filing copies of this opinion as an exhibit to the Registration
Statement with agencies of such states as you deem necessary in the
course of complying with the laws of such states regarding the offering
and sale of the Shares. In giving this consent, I do not admit that I
am in the category of persons whose consent is required under Section 7
of the Act or the rules and regulations of the Commission.
Very truly yours,
/s/ P. Bruce Borghardt
P. Bruce Borghardt
General Counsel - Corporate Development
MCI WORLDCOM, Inc.
<PAGE> 1
EXHIBIT 10.1
MCI WORLDCOM, INC.
1999 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN
The MCI WORLDCOM, Inc. 1999 Stock Option Plan (the "Plan") is intended
to provide additional incentive to certain valued and trusted directors and
employees of MCI WORLDCOM, Inc., a Georgia corporation, and its subsidiaries or
other affiliates (MCI WORLDCOM, Inc. and/or its subsidiaries and other
affiliates, 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 of the Board of Directors of the Company (the "Committee"), to be
composed of two (2) or more members of the Board of Directors of the Company who
shall be appointed from time to time by the Board of Directors. The Committee
shall have the sole and absolute 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, any other holders of Options and on
their legal representatives and beneficiaries;
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; and
c. except to the extent prohibited by, or impermissible in order to
obtain treatment desired by the Committee under, applicable law or rule, to
allocate or delegate all or any portion of its powers and responsibilities to
any one or more of its members or to any person(s) selected by it, subject to
revocation or modification by the Committee of such allocation or delegation.
3. SHARES SUBJECT TO THE PLAN
Subject to the provisions of paragraph 13 below, the Stock which may be
issued pursuant to Options granted under the Plan shall not exceed in the
aggregate seventy-five million (75,000,000) shares. 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.
<PAGE> 2
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 two million (2,000,000) shares of Stock. 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 or such other amount as may be specified in Section 422(d) of the
Code.
5. 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 by 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 reported on The Nasdaq National Market
("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 reported on Nasdaq, the closing Nasdaq reported sales
price of the Stock on the date of grant of the Option, as reported in 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.
6. 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 of the
Optionee by the Company for any reason other than retirement under normal
Company policies, death or disability or, as to Options received as a director,
the cessation of service as a director of the Company other than by reason of
death or disability; (ii) the date which is three months following the effective
date of the Optionee's retirement from the Company's service under normal
Company policies; (iii) the date which is one year following the date on which
the Optionee's service with the Company (as an employee or a director, as
applicable) ceases due to death or disability; (iv) the date of expiration or
termination 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 some or all of
the Options held by an Optionee whose service with the Company as an employee or
a
<PAGE> 3
director 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.
7. EXERCISE OF OPTIONS
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 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, local and foreign
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.
8. 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, local or foreign taxes
required to be withheld in accordance with the provisions of paragraph 7 above.
Such additional or different procedures or requirements for the exercise of
Options may be established from time to time by or as directed by the Committee.
b. In the Committee's discretion, 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 Nasdaq or any
Federal, state, local or foreign 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.
9. TRANSFERABILITY OF OPTIONS
Except as otherwise determined by the Committee, 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.
10. 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
compensation of the Optionee from the rate in existence at the time of the
granting of any Option.
11. RESTRICTIONS ON SHARES
If the Company shall be advised by counsel that certain requirements
under the Federal, state or foreign 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
<PAGE> 4
Options because of delay while such requirements are being met or the inability
of the Company to comply with such requirements.
12. 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 13 below.
13. 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, reverse 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 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. In the
event the Committee determines that any dividend or other distribution (whether
in the form of cash, shares of Stock, other securities, or other property),
recapitalization, stock split, reverse stock split, reorganization, merger,
consolidation, split-up, spin-off, combination, repurchase, or exchange of
shares of Stock or other securities of the Company, issuance of warrants or
other rights to purchase shares of Stock or other securities of the Company, or
other similar transaction or event affects the shares of Stock or other
securities or property then covered by Options such that an adjustment other
than as provided in the foregoing portion of this subparagraph (a) is
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan and Options
granted thereunder, then the Committee shall, in such manner as it may deem
equitable, adjust any or all of (i) the number and kind of shares of stock (or
other securities or property) which thereafter may be made the subject of
Options, (ii) the number and kind of shares of stock (or other securities or
property) subject to outstanding Options, (iii) the purchase price with respect
to any outstanding Options, or, if deemed appropriate, make provision for a cash
payment to the holders of outstanding Options, and (iv) the aggregate number of
shares of Stock or number and kind of other securities or property subject to
the Plan and the maximum number of shares or other securities or property under
Options that may be granted to an Optionee during any calendar year specified in
paragraph 4(a) above.
<PAGE> 5
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 entities as a result of which the
Company is not the surviving or resulting entity, 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 of new options to
purchase the stock of a successor or resulting entity, 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 of Directors shall have the authority to amend this
paragraph to provide for a requirement that a successor or resulting entity
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.
14. AMENDMENT AND TERMINATION OF PLAN
a. The Board of Directors of the Company, may, from time to time,
suspend or terminate the Plan or amend or revise the terms of the Plan; provided
that if and to the extent required by applicable law or rule, any such amendment
to the Plan shall be subject to approval 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 or such other vote as may be required by such
law or rule.
b. Subject to the provisions in paragraph 13 above, the Plan shall
terminate on March 3, 2009.
c. Subject to the provisions in paragraph 13 above, no amendment,
suspension or termination of this Plan shall, without the consent of the
Optionee, adversely affect the rights of such Optionee under any Option
previously granted to such Optionee under the Plan.
15. EFFECTIVE DATE OF PLAN
The Plan shall become effective upon approval by the Company's
shareholders.
16. TERM OF PLAN
No Option shall be granted pursuant to the Plan after March 3, 2009.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accounts, we hereby consent to the incorporation by
reference in this registration statement on Form S-8, to be filed on or around
August 17, 1999, of our report dated February 10, 1999, included in MCI
WORLDCOM, Inc.'s Form 10-K for the year ended December 31, 1998, and to all
references to our Firm included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
Jackson, Mississippi,
August 17, 1999.
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of MCI WORLDCOM, Inc. of our report dated April 9, 1998,
related to the consolidated financial statements of MCI Communications
Corporation as of December 31, 1997 and 1996, and for the three years ended
December 31, 1997, which appears in MCI WORLDCOM, Inc.'s Current Report on Form
8-K/A-3 dated November 9, 1997 (filed May 28, 1998).
/s/ PricewaterhouseCoopers LLP
Washington, D.C.
August 17, 1999
<PAGE> 1
EXHIBIT 23.3
INDEPENDENT AUDITORS' CONSENT
The Board of Directors and Shareholders
MCI WORLDCOM, Inc.:
We consent to incorporation by reference in the registration statement on Form
S-8 of MCI WORLDCOM, Inc. of our report dated February 18, 1998 relating to the
consolidated balance sheet of Brooks Fiber Properties, Inc. and subsidiaries as
of December 31, 1997, and the related consolidated statements of operations,
changes in shareholders' equity, and cash flows for each of the years in the
two-year period ended December 31, 1997, which report appears in MCI WORLDCOM,
Inc.'s Form 10-K for the year ended December 31, 1998.
/s/ KPMG LLP
St. Louis, Missouri
August 17, 1999
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-8, to be filed on or around
August 17, 1999, of our reports dated February 20, 1997, on the Consolidated
Financial Statements of MFS Communications Company, Inc. included in MCI
WORLDCOM, Inc.'s Current Report on Form 8-K dated August 25, 1996, as amended by
Form 8-K/A filed on December 19, 1997, and to all references to our Firm
included in this registration statement.
/s/ ARTHUR ANDERSEN LLP
Omaha, Nebraska,
August 17, 1999.
