As filed with the Securities and Exchange Commission on August 23, 2000
Registration Statement No. 333-________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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WORLDCOM, INC.
(Exact name of registrant as specified in its charter)
GEORGIA 58-1521612
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
500 Clinton Center Drive
Clinton, Mississippi 39056
(601) 460-5600
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive office)
P. Bruce Borghardt
WorldCom, Inc.
10777 Sunset Office, Suite 330
St. Louis, Missouri 63127
(314) 909-4100
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
---------------------
Copies of all communications to:
R. Randall Wang, Esq.
Bryan Cave LLP
211 North Broadway, Suite 3600
St. Louis, Missouri 63102
(314) 259-2000
----------------------
Approximate date of commencement of proposed sale to the public: At such
time or times after the effective date of this Registration Statement as the
selling shareholders shall determine.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: |_|
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box: |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. |_|
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective dated until the registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
===================================== =================== ======================= ======================== =================
<S> <C> <C> <C> <C>
Title of securities to be registered Amount to be Proposed maximum Proposed maximum Amount of
registered offering price per aggregate offering registration fee
share(1) price (1)
------------------------------------- ------------------- ----------------------- ------------------------ -----------------
Common Stock, $0.01 par value, and 1,276,198 $9.95 $12,696,230.38 $3,352
associated preferred stock purchase shares(3)
rights(2)
------------------------------------- ------------------- ----------------------- ------------------------ -----------------
<FN>
----------------------
(1) Computed pursuant to Rule 457(h) solely for the purpose of determining the
registration fee. Proposed maximum offering price represents the weighted
average price per share based on the exercise price of stock options
issued.
(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 fee.
(3) This Registration Statement also covers such additional shares of Common
Stock as may be issuable pursuant to antidilution provisions.
----------------------
</FN>
</TABLE>
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The information in this prospectus is not complete and may be changed. The
securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED AUGUST 23, 2000
PROSPECTUS
WORLDCOM, INC.
A MAXIMUM OF 1,276,198 SHARES OF COMMON STOCK
----------------------
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.
----------------------
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.
----------------------
The date of this prospectus is August 23, 2000
<PAGE>
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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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses (other than underwriting discounts and sales commissions)
relating to the registration of common shares will be borne by us. These
expenses are estimated to be as follows*:
SEC Registration Fee --------------------------------------$ 3,352
Accountants' Fees -------------------------------------------4,000
Legal Fees -------------------------------------------------10,000
Miscellaneous -----------------------------------------------2,648
-------
Total -----------------------------------------------------$20,000
* Ms. Day-Cartee will pay expenses related to the securities laws of any
state and any sales commissions or underwriting discounts and fees and expenses
of its counsel incurred in connection with the sale of shares registered
hereunder.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 14-2-202(b)(4) of the Georgia Business Corporation Code (the
"GBCC") provides that a 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 GBCC. 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 non-monetary 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 GBCC 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.
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Sections 14-2-850 to 14-2-859, inclusive, of the GBCC govern the
indemnification of directors, officers, employees, and agents. Section 14-2-851
of the GBCC 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 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:
(1) 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 (2) 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 GBCC, a
determination must be made that the director has met the relevant standard of
conduct. Such determination must be made by: (1) a majority vote of a quorum
consisting of disinterested directors; (2) a duly designated committee of
disinterested directors; (3) duly selected special legal counsel; or (4) a vote
of the shareholders, excluding shares owned by or voted under the control of
directors who do not qualify as disinterested directors.
Section 14-2-856 of the GBCC provides that 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, 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 GBCC,
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 GBCC 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 GBCC 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
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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 GBCC, or (4) for any transaction in
which the director obtained an improper personal benefit.
Section 14-2-857 of the GBCC 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, subject to
the same limitations 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 GBCC. 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 GBCC to employees and agents.
ITEM 16. EXHIBITS.
See Exhibit Index.
ITEM 17. 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:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
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(ii) To reflect in the prospectus any facts or events arising
after the effective date of this 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 this 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 SEC pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20
percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the registrant pursuant to Section 13 or Section 15(d)
of the Exchange Act that are incorporated by reference in this registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(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, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 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, we have been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
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is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of 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 Securities Act and will be governed by the final
adjudication of such issue.
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<PAGE>
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 of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Clinton, State of Mississippi, on August 23, 2000.
WORLDCOM, Inc.
By: /s/ Scott D. Sullivan
---------------------------------
Scott D. Sullivan
Chief Financial Officer
Each person whose signature appears below hereby constitutes and appoints
Bernard J. Ebbers and Scott D. Sullivan, and each of them (with full power to
each of them to act alone), his or her true and lawful attorneys in fact and
agents for him or her and on his or her behalf and in his or her name, place and
stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and any and all
registration statements filed pursuant to Rule 462 under the Securities Act of
1933, as amended, 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 or she 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.
Name Title Date
---- ----- ----
----------------------------- Director
Clifford L. Alexander, Jr.
/s/ James C. Allen
----------------------------- Director August 23, 2000
James C. Allen
/s/ Judith Areen
----------------------------- Director August 23, 2000
Judith Areen
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----------------------------- Director
Carl J. Aycock
/s/ Max E. Bobbitt
----------------------------- Director August 23, 2000
Max E. Bobbitt
/s/ Bernard J. Ebbers
----------------------------- Director, President and August 23, 2000
Bernard J. Ebbers Chief Executive Officer
(Principal Executive Officer)
/s/ Francesco Galesi
------------------------------ Director August 23, 2000
Francesco Galesi
/s/ Stiles A. Kellett, Jr
------------------------------ Director August 23, 2000
Stiles A. Kellett, Jr.
/s/ Gordon S. Macklin
------------------------------ Director August 23, 2000
Gordon S. Macklin
/s/ John A. Porter
------------------------------ Director August 23, 2000
John A. Porter
/s/ Bert C. Roberts, Jr.
------------------------------ Director August 23, 2000
Bert C. Roberts, Jr.
/s/ John W. Sidgmore
------------------------------ Vice Chairman of the Board and August 23, 2000
John W. Sidgmore Director
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<PAGE>
/s/ Scott D. Sullivan
------------------------------ Director and Chief Financial August 23, 2000
Scott D. Sullivan Officer (Principal Financial
Officer and Principal
Accounting Officer)
/s/ Lawrence C. Tucker August 23, 2000
------------------------------ Director
Lawrence C. Tucker
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<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
----------- -----------
4.1 Second Amended and Restated Articles of Incorporation of WorldCom, Inc.
(including preferred stock designations), as amended as of May 1, 2000
(incorporated herein by reference to Exhibit 4.1 to the Company's Quarterly
Report on Form 10-Q dated March 31, 2000 (filed May 15, 2000) (File No.
0-11258))
4.2 Restated Bylaws of 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 WorldCom, Inc. and The Bank of New York, as Rights Agent
(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) (File No.
0-11258))
5.1 Opinion of Counsel as to the legality of the securities to be issued
23.1 Consent of Arthur Andersen LLP
23.2 Consent of KPMG LLP
23.3 Consent of Counsel (included in Exhibit 5.1)
24.1 Power of Attorney (included in signature page)
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