Filed Pursuant to Rule 424(b)(3)
Registration No. 333-44380
PROSPECTUS
WORLDCOM, INC.
A MAXIMUM OF 1,276,198 SHARES OF COMMON STOCK
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We are offering up to 1,276,198 shares of our common stock which may be
issued upon exercise of various stock option agreements. We will provide
specific terms of any offerings made under this prospectus in prospectus
supplements, if necessary.
We will not bear any costs relating to the registration of the common
shares; instead, Ms. Diana Day-Cartee, the original recipient of the stock
option agreements, has agreed to pay such costs.
Our common shares are traded on The Nasdaq National Market under the symbol
WCOM.
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These securities have not been approved or disapproved by the Securities
and Exchange Commission or any state securities commission, nor has the
Securities and Exchange Commission or any state securities commission passed
upon the accuracy or adequacy of this prospectus. Any representation to the
contrary is a criminal offense.
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The date of this prospectus, as amended, is September 15, 2000
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EXPLANATORY NOTES
We have not authorized anyone to provide you with information or to
represent anything not contained in this prospectus. You must not rely on any
unauthorized information or representations. We are offering to sell, and
seeking offers to buy, only the shares of common stock covered by this
prospectus, and only under circumstances and in jurisdictions where it is lawful
to do so. The information contained in this prospectus is current only as of its
date, regardless of the time of delivery of this prospectus or of any sale of
the shares.
You should read carefully this entire prospectus, as well as the documents
incorporated by reference in this prospectus, before making an investment
decision. All references to "we," "us," "our" or "WorldCom" in this prospectus
mean WorldCom, Inc. and its subsidiaries.
TABLE OF CONTENTS
Page
The Company..................................................................1
Use of Proceeds..............................................................2
The Stock Option Agreements..................................................2
Plan of Distribution.........................................................4
Experts......................................................................6
Where You Can Find More Information..........................................6
Cautionary Statement Regarding Forward-Looking Statements....................8
THE COMPANY
Organized in 1983, WorldCom, Inc., a Georgia corporation, provides a broad
range of communications, outsourcing, and managed network services to both U.S.
and non-U.S. based corporations. We are a global communications company
utilizing a facilities-based, on-net strategy throughout the world. The on-net
approach allows our customers to send data streams or voice traffic across town,
across the U.S., or to any of our facilities-based networks in Europe or Asia,
without ever leaving the confines of our network. The on-net approach provides
our customers with superior reliability and low operating costs. From September
15, 1998 until May 1, 2000, we were named MCI WORLDCOM, Inc. Prior to September
15, 1998, we were named WorldCom, Inc.
We leverage our facilities-based networks to focus on data and the
Internet. We provide the building blocks or foundation for the new e-conomy.
Whether it is an emerging e-business or a larger, more established company who
is embracing an e-business approach, we provide the communications
infrastructure to help make them successful. From private networking - frame
relay and asynchronous transfer mode ("ATM") - to high capacity Internet and
related services, to hosting for complex, high volume mega-sites, to turn key
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network management and outsourcing, we provide the broadest range of Internet
and traditional, private networking services available from any provider.
Our core business is communications services, which includes voice, data,
Internet, and international services. During each of the last three years, more
than 90% of our operating revenues were derived from communications services.
Our executive offices are located at 500 Clinton Center Drive, Clinton,
Mississippi 39056 and our telephone number is (601) 460-5600.
USE OF PROCEEDS
We may use all proceeds received by us upon exercise of the Stock Option
Agreements for any corporate purpose.
THE STOCK OPTION AGREEMENTS
General Information
Pursuant to the Worldcom, Inc. 1997 Stock Option Plan, as amended (the
"1997 Plan") and the LDDS Communications, Inc. 1990 Stock Option Plan, as
amended (the "1990 Plan"), we granted options to Ms. Diana Day-Cartee to acquire
shares of our common stock pursuant to the terms of various stock option
agreements. The stock option agreements are referred to collectively in this
prospectus as the "Stock Option Agreements." Ms. Day-Cartee has been our
employee since August 1984 and currently serves as our President - Customer
Service and Satisfaction. The Stock Option Agreements provide for the purchase
of a total of 1,276,198 shares of our common stock by the holder of such
instruments, subject to adjustment as described below. Any shares of common
stock issued upon exercise of the Stock Option Agreements may be newly issued or
may be purchased on the open market or from private sources. The following table
sets forth certain information with respect to stock options granted under each
Stock Option Agreement as of August 1, 2000.
Grant Date Expiration Number of Exercise Plan Grant Type
Date Options Price
---------- ---------- --------- -------- ---- ----------
8/6/1990 8/5/2000 84,192 $ 1.0616 1990 Non-qualified
7/8/1991 7/7/2001 94,986 2.4318 1990 Non-qualified
6/23/1992 6/22/2002 120,894 3.0688 1990 Non-qualified
6/14/1993 6/13/2003 103,626 5.8190 1990 Non-qualified
7/1/1994 6/30/2004 225,000 5.9600 1990 Non-qualified
7/3/1995 7/2/2005 112,500 9.0000 1990 Non-qualified
1/2/1996 1/1/2006 90,000 11.9167 1990 Non-qualified
1/23/1997 1/22/2007 345,000 17.3334 1997 Non-qualified
1/2/1998 1/1/2008 100,000 19.9584 1997 Non-qualified
Total: 1,276,198
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The number of shares and the exercise prices described above have been
adjusted, in each case, for (a) prior exercises, and (b) stock splits and
dividends on our shares of common stock.
The Stock Option Agreements were originally executed to provide an
additional incentive to Ms. Day-Cartee by increasing her proprietary interest in
our business and our success. The current holder of the Stock Option Agreements
may obtain a copy of the Stock Option Agreements and information regarding them
and their administration from our company's Stock Option Department, at the
address listed above under the heading "The Company." The Stock Option
Department's telephone number is (601) 460-8001.
Eligibility To Participate In The Stock Option Agreements
Consistent with the terms of each Stock Option Agreement, the current
holder thereof may exercise each Stock Option Agreement.
Types Of Options Granted Under The Stock Option Agreements
Each of the Stock Option Agreements granted the optionee thereunder
non-qualified stock options. A non-qualified stock option is a stock option that
does not qualify for special tax treatment pursuant to Section 422 of the United
States Internal Revenue Code of 1986, as amended.
How To Exercise The Stock Option Agreements
Exercise of the options under each of the Stock Option Agreements is
governed by the terms of the relevant plan and the Stock Option Agreement
itself, and not by this summary. In order to exercise any of the options, the
holder must give us a signed written notice stating the number of shares for
which the stock option is being exercised accompanied by the payment of the
exercise price. The exercise price may be paid by delivery of payment in cash,
or any cash equivalent acceptable to us, and in any other manner permitted by
the applicable Stock Option Agreement and plan.
In addition to the payment of the exercise price, we may require the holder
to pay an amount equal to the federal, state, local, and foreign taxes that may
be required to be withheld in connection with the exercise of the stock option.
We may establish procedures to allow the holder to have us withhold a portion of
shares issuable upon exercise of the stock option with a fair market value equal
to the withholding tax due as a result of the exercise of the stock option.
As long as our common stock is traded on The Nasdaq National Market, the
fair market value of our common stock is the closing quoted selling price of our
common stock, as reported in The Wall Street Journal. If our common stock is not
traded on The Nasdaq National Market, the plan provides for several alternative
methods of calculating the fair market value of our common stock.
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Determination Of Exercise Price
The exercise price for the non-qualified stock options described in the
Stock Option Agreements is set forth in such agreements, and is subject to
adjustment upon certain events, some of which may have occurred.
When You May Exercise Your Options And When Your Stock Options Lapse
As described above, the optionee may exercise the options described in each
Stock Option Agreement at any time on or before the expiration date for such
option listed above. Certain other provisions may apply, however, upon the death
or permanent disability of Ms. Day-Cartee while still our employee.
Adjustments To The Number Of Shares
In the event of (a) any stock dividend, stock split, combination of shares,
recapitalization or other change in our capital structure, or (b) any merger,
consolidation, spin-off, reorganization, partial or complete liquidation,
issuance of rights or warrants to purchase securities, or (c) any other
corporate transaction or event having an effect similar to any of the foregoing,
the shares issuable upon exercise of the Stock Option Agreements will be
appropriately and proportionately adjusted by our Board of Directors in
accordance with the terms of the applicable Stock Option Agreement and plan.
Status As An Optionholder
The holder of the Stock Option Agreements will not have the rights or
privileges associated with the ownership of the shares of common stock issuable
upon exercise of the Stock Option Agreements until the Stock Option Agreements
have been exercised and the holder has become the holder of record of such
shares.
We have been informed that the Stock Option Agreements between us and Ms.
Day-Cartee were recently transferred by Ms. Day-Cartee to DDC Investments, a
Georgia general partnership. The managing general partner of DDC Investments is
Diana Day-Cartee. The address of DDC Investments is 113 Peachtree Street N.E.,
Suite 2500, Atlanta, GA 30303-1846.
PLAN OF DISTRIBUTION
We will issue shares covered by this prospectus upon proper exercise of the
option granted under each Stock Option Agreement. The holder of the Stock Option
Agreements will act independently of us in making decisions with respect to the
timing, manner and size of each exercise. When a particular exercise is made, if
required, we will distribute to optionee a prospectus supplement.
All expenses of the registration of the shares will be paid by Ms.
Day-Cartee, including, without limitation, all registration and filing fees,
printing expenses, expenses of compliance with blue sky laws, fees and
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disbursements of our counsel and expenses of any audits incidental to this
registration.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the United States federal income tax
consequences that generally will arise with respect to exercise of the stock
options granted under the Stock Option Agreements and with respect to the sale
of common stock acquired upon exercise of the Stock Option Agreements. For
precise advice as to any specific transaction or set of circumstances, the
optionee should consult with her own tax and legal advisors. The optionee should
also consult with her own tax and legal advisors regarding the application of
any state, local, and foreign taxes and any federal gift, estate and inheritance
taxes.
Non-Qualified Stock Options
Because the stock options are non-qualified stock options, the optionee did
not recognize income at the time of the grant of the stock options, however the
optionee will recognize ordinary income upon the exercise of each non-qualified
stock option as provided by Internal Revenue Code Section 83. The amount of
ordinary income the optionee will recognize will be equal to the difference
between (i) the fair market value of the stock on the date of exercise of the
stock option and (ii) the amount of cash paid for the stock (including any
amount paid for the option itself). Upon exercise of a non-qualified stock
option, we will be entitled to deduct as compensation an amount equal to the
amount included in the optionee's gross income consistent with the provisions of
Internal Revenue Code Section 83.
This summary does not address the federal tax consequences of an optionee
transferring an option as permitted under the Option Agreements. An optionee
contemplating such a transfer should discuss with her tax advisors the tax
consequences resulting therefrom, including any income recognition (and
withholding obligations) with respect to such a transfer.
Income Tax Rates On Capital Gain And Ordinary Income
If the optionee holds the shares of common stock received upon exercise of
the stock options for less than twelve months, upon the disposition of those
shares, the income the optionee receives will be treated as a short-term capital
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gain and will be taxed as ordinary income at a maximum rate of 39.6%. Phaseouts
of personal exemptions and reductions of allowable itemized deductions at higher
levels of income may result in slightly higher marginal tax rates. Ordinary
compensation income will also be subject to the Medicare tax and, under certain
circumstances, a social security tax.
If the optionee holds all or some portion of the shares of common stock
received upon exercise of the stock options for twelve months or more, upon the
disposition of those shares the optionee will receive long-term capital gain tax
treatment at a maximum rate of 20%.
EXPERTS
Our consolidated financial statements as of December 31, 1999 and 1998, and
for each of the years in the three-year period ended December 31, 1999, have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are included in our Annual
Report on Form 10-K for the year ended December 31, 1999, and are incorporated
herein by reference, in reliance upon the authority of such firm as experts in
accounting and auditing in giving such reports.
The consolidated financial statements of Brooks Fiber Properties, Inc. for
the year ended December 31, 1997, have been incorporated by reference in this
document and in the registration statement in reliance upon the report of KPMG
LLP, independent certified public accountants, included in our Annual Report on
Form 10-K for the year-ended December 31, 1999 and incorporated by reference in
this document, and upon the authority of such firm as experts in accounting and
auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You can inspect and copy these reports, proxy
statements and other information at the public reference facilities of the SEC,
in Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549; Seven World Trade
Center, Suite 1300, New York, New York 10048; and Suite 1400, Citicorp Center,
500 W. Madison Street, Chicago, Illinois 60661-2511. You can also obtain copies
of these materials from the public reference section of the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. Please call the SEC
at 1-800-SEC-0330 for further information on the public reference rooms. The SEC
also maintains a web site that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the SEC (http://www.sec.gov).
We have filed a registration statement and related exhibits with the SEC
under the Securities Act of 1933. This prospectus is a part of that registration
statement. The registration statement contains additional information about us
and the securities. You may inspect the registration statement and exhibits
without charge at the office of the SEC at 450 Fifth Street, N.W., Washington,
D.C. 20549, and you may obtain copies from the SEC at prescribed rates. The SEC
allows us to "incorporate by reference" the information we file with it, which
means that we can disclose important information to you by referring to those
documents. The information incorporated by reference is an important part of
this prospectus, and information that we file later with the SEC will
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automatically update and supersede this information. We incorporate by reference
the following documents we filed with the SEC under File No. 000-11258:
o Our Annual Report on Form 10-K for the fiscal year ended December 31,
1999;
o Our Quarterly Reports on Form 10-Q for the quarterly periods ended
March 31, 2000 and June 30, 2000;
o Our Current Reports on Form 8-K-1 dated April 11, 2000 (filed April
11, 2000), Form 8-K-2 dated April 11, 2000 (filed April 11, 2000),
Form 8-K dated May 16, 2000 (filed May 16, 2000), Form 8-K dated May
19, 2000 (filed May 22, 2000), Form 8-K dated May 31, 2000 (filed June
12, 2000) and Form 8-K dated July 13, 2000 (filed July 13, 2000);
o The description of our common stock set forth in Resurgens'
Registration Statement on Form 8-A dated December 12, 1989 (File No.
1-10415), as updated by the descriptions contained in our Registration
Statement on Form S-4 (File No. 333-16015), as declared effective by
the Securities and Exchange 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
by the descriptions contained in our 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;"
o The description of the Company's rights to acquire preferred stock set
forth in our Registration Statement on Form 8-A dated August 26, 1996,
as updated by our Current Report on Form 8-K dated May 22, 1997 (filed
June 6, 1997); and
o 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 WorldCom with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act, as amended (the
"Exchange Act"), 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.
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You may receive a copy of any of these filings (except exhibits, unless the
exhibits are specifically incorporated), at no cost, by writing or telephoning:
WorldCom, Inc.
500 Clinton Center Drive
Clinton, Mississippi 39056
Telephone Number (601) 460-5600 or
(877) 624-9266
Attention: Investor Relations Department
You should rely only on the information incorporated by reference or
provided in this prospectus and any supplement. We have not authorized anyone
else to provide you with different information.
Cautionary Statement Regarding Forward-Looking Statements
This prospectus may be deemed to include forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended, that involve
risk and uncertainty, including financial, regulatory environment and trend
projections, estimated costs to complete or possible future revenues from
in-process research and development programs, the likelihood of successful
completion of such programs, and the outcome of Euro conversion efforts, as well
as any statements preceded by, followed by, or that include the words "intends,"
"estimates," "believes," "expects," "anticipates," "should," "could," or similar
expressions; and other statements contained herein regarding matters that are
not historical facts.
Although we believe that our expectations are based on reasonable
assumptions, we can give no assurance that our expectations will be achieved.
The important factors that could cause actual results to differ materially from
those in the forward-looking statements herein (the "Cautionary Statements")
include, without limitation: (1) possible effects of our recent announcement
regarding the consideration of opportunities to separate the wholesale and
consumer operations into separate companies or tracking stocks; (2) the effects
of vigorous competition in the markets in which the Company operates; (3) the
impact of technological change on our business, new entrants and alternative
technologies, and dependence on availability of transmission facilities; (4)
uncertainties associated with the success of other acquisitions and the
integration thereof; (5) risks of international business; (6) regulatory risks,
including the impact of the Telecom Act; (7) contingent liabilities; (8) the
impact of competitive services and pricing; (9) risks associated with Euro
conversion efforts; (10) risks associated with debt service requirements and
interest rate fluctuations; (11) our degree of financial leverage; and (12)
other risks referenced from time to time in our filings with the SEC, including
our Form 10-K. All subsequent written and oral forward-looking statements
attributable to us or persons acting on our behalf are expressly qualified in
their entirety by the Cautionary Statements. We do not undertake any obligation
to release publicly any revisions to such forward-looking statements to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
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