-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, T8ZOg0t6kqU/Y8qbJKjvr5hvihH6HAw0djXsUyfua/eIXPCOkkELUwc5bQX6IHU2 hbrF7A+rT2r2J1k/UWv/Hw== 0000931763-00-001261.txt : 20000512 0000931763-00-001261.hdr.sgml : 20000512 ACCESSION NUMBER: 0000931763-00-001261 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20000511 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WORLDCOM INC/GA// CENTRAL INDEX KEY: 0000723527 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 581521612 STATE OF INCORPORATION: GA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3/A SEC ACT: SEC FILE NUMBER: 333-34578 FILM NUMBER: 626832 BUSINESS ADDRESS: STREET 1: 500 CLINTON CENTER DRIVE CITY: CLINTON STATE: MS ZIP: 39056 BUSINESS PHONE: 6014605600 FORMER COMPANY: FORMER CONFORMED NAME: MCI WORLDCOM INC DATE OF NAME CHANGE: 19980914 FORMER COMPANY: FORMER CONFORMED NAME: WORLDCOM INC /GA/ DATE OF NAME CHANGE: 19970127 FORMER COMPANY: FORMER CONFORMED NAME: LDDS COMMUNICATIONS INC /GA/ DATE OF NAME CHANGE: 19930916 S-3/A 1 AMENDMENT #1 TO FORM S-3 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 11, 2000 Registration Statement No. 333-34578 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 PRE-EFFECTIVE AMENDMENT NO. 1 TO FORM S-3 Registration Statement Under the Securities Act Of 1933 ______________________________ WorldCom, Inc. (formerly known as MCI WORLDCOM, Inc.) (Exact name of registrant as specified in its charter) Georgia 58-1521612 (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) 500 Clinton Center Drive Clinton, Mississippi 39056 (Address of principal executive offices) Registrant's telephone number including area code: (601) 460-5600 ______________________________ Copies of all correspondence to: P. Bruce Borghardt, Esq. R. Randall Wang, Esq. General Counsel - Corporate Development Bryan Cave llp WorldCom, Inc. One Metropolitan Square 10777 Sunset Office Drive, Suite 330 211 North Broadway, Suite 3600 St. Louis, Missouri 63127 St. Louis, Missouri 63102-2750 (314) 909-4100 (314) 259-2000 (Name, address, including zip code, and telephone number, including area code, of agent for service) Approximate date of commencement of proposed sale to the public: From time to time after the Registration Statement becomes effective. 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, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [X] The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine. ================================================================================ ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ + The information in this prospectus is preliminary and may be changed. We + + have filed a registration statement relating to these securities with the + + Securities and Exchange Commission. We may not sell these securities and + + will not accept offers to buy any of these securities until the + + registration statement become effective. This prospectus is not an offer + + to sell, or a request for offers to buy, nor will we sell any of these + + securities in any State in which it would be unlawful to do so prior to + + registration or qualification under the securities laws of any such States. + ++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ SUBJECT TO COMPLETION, DATED MAY 11, 2000 PRELIMINARY PROSPECTUS [LOGO OF WORLDCOM(SM)] Debt Securities This prospectus describes debt securities which we may issue and sell at various times: . The debt securities may be debentures, notes or other unsecured evidences of indebtedness of WorldCom. . We may issue them in one or several series. . The total principal amount of the debt securities we will issue under this prospectus will be not more than U.S.$15 billion (or the equivalent amount in other currencies). . The terms of each series of debt securities (interest rates, maturity, redemption provisions and other terms) will be determined at the time of sale, and will be specified in a prospectus supplement which will be delivered together with this prospectus at the time of the sale. We may sell debt securities to or through underwriters, dealers or agents. We may also sell debt securities directly to investors. More information about the way we will distribute the debt securities is under the heading "Plan of Distribution." Information about the underwriters or agents who will participate in any particular sale of debt securities will be in the prospectus supplement relating to that series of debt securities. ---------------------------- Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or determined that this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. The date of this prospectus is [_________], 2000. We have not authorized anyone to give any information or to make any representations concerning the offering of the debt securities except that which is in this prospectus or in the prospectus supplement which is delivered with this prospectus, or which is referred to under "Where You Can Find More Information." If anyone gives you any other information or makes any other representations, you should not rely on them. This prospectus is not an offer to sell or a solicitation of an offer to buy any securities other than the debt securities which are referred to in the prospectus supplement. This prospectus is not an offer to sell or a solicitation of an offer to buy such debt securities in any circumstances in which such offer or solicitation is unlawful. You should not interpret the delivery of this prospectus, or any sale of debt securities, as an indication that there has been no change in our affairs since the date of this prospectus. You should also be aware that information in this prospectus may change after this date. TABLE OF CONTENTS Table Of Contents........................ 2 Ratio Of Earnings To Fixed Charges............... 7 About This Prospectus.................... 2 Description Of Debt Securities................... 7 Where You Can Find More Information...... 2 Plan Of Distribution............................. 18 Cautionary Statement Regarding Book-Entry Debt Securities....................... 19 Forward-Looking Statements.............. 3 Certain United States Federal Income Tax WorldCom................................. 5 Documentation Requirements For Non-U.S. Recent Developments...................... 5 Holders...................................... 21 Use Of Proceeds.......................... 7 Lawyers.......................................... 23 Experts.......................................... 23
ABOUT THIS PROSPECTUS You should rely only on the information contained in or incorporated by reference into this prospectus. This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or the "SEC," utilizing a "shelf" registration process. Under this process, we may sell any combination of the debt securities described in this prospectus in one or more offerings up to a total dollar amount of U. S. $15,000,000,000 or the equivalent in other currencies. This prospectus provides you with a general description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. You should read both this prospectus and any prospectus supplement together with additional information described under the next heading "Where You Can Find More Information." 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; 7 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 website that contains reports, proxy and information statements and other information filed with the SEC (http://www.sec.gov). 2 We have filed a registration statement and related exhibits with the SEC under the Securities Act of 1933 (the "Securities Act"). This prospectus is a part of that registration statement. The registration statement contains additional information about us and the debt 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 automatically update and supersede this information. We incorporate by reference the following documents we filed with the SEC under File No. 000-11258: . Our Annual Report on Form 10-K for the year ended December 31, 1999. . Our Current Reports on Form 8-K dated October 4, 1999 (filed October 6, 1999), Form 8-K dated October 5, 1999 (filed October 15, 1999), Form 8-K-1 dated April 11, 2000 (filed April 11, 2000) and Form 8-K-2 dated April 11, 2000 (filed April 11, 2000). . All documents filed by us with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date of this prospectus and before we stop offering the debt securities (other than those portions of such documents described in paragraphs (i), (k), and (l) of Item 402 of Regulation S-K promulgated by the SEC). 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 The following statements are or may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995: . any statements contained or incorporated herein regarding possible or assumed future results of operations of WorldCom's business, anticipated cost savings or other synergies, the markets for WorldCom's services and products, anticipated capital expenditures, the outcome of Euro conversion efforts, regulatory developments or competition; . any statements preceded by, followed by or that include the words "intends," "estimates," "believes," "expects," "anticipates," "should," "could," or similar expressions; and 3 . other statements contained or incorporated by reference herein regarding matters that are not historical facts. Such statements are subject to risks and uncertainties. You should understand that certain important factors, in addition to the factors discussed in the documents we incorporate by reference in this prospectus, could affect our future results and could cause those results to differ materially from those expressed in our forward-looking statements. You should not place undue reliance on any of our forward-looking statements, which speak only as of the date thereof. The important factors that could cause actual results to differ materially from those in the forward-looking statements herein include, without limitation: . whether the Sprint merger is completed and the ability to integrate the operations of WorldCom and Sprint, including their respective products and services; . the effects of vigorous competition in the markets in which we operate; . the impact of technological change on our business, new entrants and alternative technologies, and dependence on availability of transmission facilities; . risks of international business; . regulatory risks, including the impact of the Telecommunications Act of 1996; . contingent liabilities; . the impact of competitive services and pricing; . risks associated with the Euro conversion efforts; . risks associated with debt service requirements and interest rate fluctuations; . our degree of financial leverage, and . other risks referenced from time to time in our filings with the SEC. Our independent public accountants have not examined or compiled the forward- looking statements referred to above or any forecasts or other projections incorporated by reference herein and, accordingly, they do not provide any assurance with respect to such statements. The cautionary statements contained or referred to in this section should be considered in connection with any subsequent written or oral forward-looking statements that may be issued by WorldCom or persons acting on its behalf. WorldCom does 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. 4 WORLDCOM 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. Prior to September 15, 1998, we were named WorldCom, Inc. From September 15, 1998 through April 30, 2000, we were named MCI WORLDCOM, Inc. Effective May 1, 2000, we changed our name back to 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 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. We serve as a holding company for our subsidiaries' operations. Our principal executive offices are located at 500 Clinton Center Drive, Clinton, Mississippi 39056, and our telephone number is (601) 460-5600. RECENT DEVELOPMENTS On October 5, 1999, we announced that we had entered into an Agreement and Plan of Merger dated as of October 4, 1999, which was amended and restated on March 8, 2000, between WorldCom and Sprint Corporation. Under the terms of the Sprint merger agreement, Sprint will merge with and into WorldCom. Sprint is a diversified telecommunications company, providing long distance, local and wireless communications services. Sprint's business is organized in two groups: the Sprint PCS group and Sprint FON group. Sprint built and operates the United States' first nationwide all-digital, fiber-optic network and is a leader in advanced data communications services. In 1999 Sprint had $20 billion in annual revenues and serves more than 20 million business and residential customers. Additional information regarding Sprint and the Sprint merger agreement is contained in our Current Reports on Form 8-K-1 dated April 11, 2000 (filed April 11, 2000) and Form 8-K-2 dated April 11, 2000 (filed April 11, 2000), which is incorporated by reference herein. Under the merger agreement with Sprint, each outstanding share of Sprint FON common stock will be exchanged for $76.00 of WorldCom common stock, subject to a collar. In addition, each share of Sprint PCS common stock will be exchanged for one share of a new WorldCom PCS tracking stock and 0.116025 shares of WorldCom common stock. The terms of the WorldCom PCS tracking stock will be virtually identical to the terms of Sprint's PCS common stock and will be designed to track the performance of the PCS business 5 of the surviving company in the Sprint merger. Holders of Sprint class A stock will receive that amount of WorldCom common stock and WorldCom PCS tracking stock as if such class A stock had been converted into Sprint FON common stock and Sprint PCS common stock immediately before the Sprint merger. Holders of the other classes or series of Sprint capital stock will receive one share of a class or series of our capital stock with virtually identical terms, which will be established in connection with the Sprint merger, for each share of Sprint capital stock that they own. Sprint has announced that it will redeem for cash each outstanding share of the Sprint first and second series preferred stock on May 25, 2000. The Sprint merger will be accounted for as a purchase and will be tax-free to Sprint stockholders. The actual number of shares of WorldCom common stock to be exchanged for each share of Sprint's FON common stock will be determined based on the average trading prices of WorldCom common stock prior to the closing, but will not be less than 1.4100 shares (if WorldCom's average stock price equals or exceeds $53.9007) or more than 1.8342 shares (if WorldCom's average stock price equals or is less than $41.4350). Consummation of the Sprint merger is subject to various conditions set forth in the merger agreement with Sprint, including the adoption of the merger agreement by stockholders of Sprint, the approval of the Sprint merger by shareholders of WorldCom, the approval of the issuance of WorldCom capital stock in the Sprint merger by shareholders of WorldCom, certain U.S. and foreign regulatory approvals and other customary conditions. On April 28, 2000, special meetings of the shareholders of WorldCom and Sprint were held and the merger proposals were adopted and approved. It is anticipated that the Sprint merger will close in the second half of 2000. Additionally, if the Sprint merger is consummated, the integration and consolidation of Sprint would require substantial management and financial resources and involve a number of significant risks, including potential difficulties in assimilating technologies and services of Sprint and in achieving anticipated synergies and cost reductions. Recent Results WorldCom The following information reflects selected information for WorldCom's quarter ended March 31, 2000. For the first quarter of 2000, WorldCom's net income applicable to common shareholders was $1.3 billion, or $0.44 per common share, compared with $712 million, or $0.24 per share, in the first quarter of 1999. Operating income for the first quarter of 2000 was $2.4 billion compared with $1.5 billion for the first quarter of 1999. WorldCom revenues increased 9% to $10.0 billion from $9.1 billion in the first quarter of 1999. Communications services revenues for the first quarter of 2000 were $10 billion. WorldCom now receives 46 percent of communications services revenues from high growth areas such as data, Internet and international revenues. Excluding WorldCom's interest in the Brazilian telecommunications company Embratel, communications services revenues increased 14% to $9.2 billion versus $8.0 billion in the first quarter of 1999. Sprint The following information reflects selected results for the quarter ended March 31, 2000 for the Sprint FON group, the Sprint PCS group and Sprint as a whole. For the first quarter of 2000, the Sprint FON group's revenues increased 7 percent to $4.40 billion from $4.11 billion in the first quarter of 1999. Net income was $1.12 billion in the first quarter of 2000, compared with $406 million in the first quarter of 1999. Net income for the current quarter included a $675 million after-tax gain on the sale of Sprint's investment in Global One. Net income in the same period a year ago included a $28 million after-tax loss from Sprint's interest in Global One losses. The Sprint FON group's long-distance division reported an increase in quarterly revenues of 7 percent to $2.74 billion from $2.56 billion in the first quarter of 1999. Operating income was $431 million for the first quarter of 2000, an 11 percent improvement from $388 million in the first quarter of 1999. Calling volumes rose 17 percent for the first quarter of 2000 compared to the same period in 1999. The Sprint FON group's local telecommunications division reported an increase in revenues in the first quarter of 2000 of 4 percent to $1.43 billion compared to $1.37 billion in the first quarter of 1999. Operating income rose 15 percent in the first quarter of 2000 to $416 million from $363 million in the first quarter of 1999. Access lines increased 4.7 percent from the first quarter of 1999. The Sprint FON group's product distribution and directory publishing division reported an increase in revenues of 7 percent in the first quarter of 2000 to $454 million from $426 million in the first quarter of 1999. Non- affiliate revenues increased 17 percent in the first quarter of 2000 compared to the first quarter of 1999. Operating income increased 20 percent to $67 million in the first quarter of 2000 from $56 million in the first quarter of 1999. The Sprint PCS group added 831,000 new subscribers in the first quarter of 2000. In the quarter, Sprint PCS transferred approximately 45,000 customers to its affiliate, Independent Wireless One. Excluding this one-time transfer, Sprint PCS had net operational customer additions of 876,000. Total net operating revenues were $1.18 billion in the first quarter of 2000 compared to $604 million in the first quarter of 1999. Average monthly revenue per user remained steady at $54 for the first quarter of 2000. Capital expenditures were $693 million for the first quarter of 2000, reflecting the continued expansion of the Sprint PCS group's nationwide wireless network. Consolidated net operating revenues for the first quarter of 2000 were $5.48 billion, an 18 percent increase from $4.65 billion in the first quarter of 1999. USE OF PROCEEDS Unless we indicate otherwise in the prospectus supplement which accompanies this prospectus, we will use the net proceeds from the sale of the debt securities for general corporate purposes. These may include, but are not limited to, the repayment of indebtedness, acquisitions, additions to working capital, and capital expenditures. Pending such use, the proceeds may be invested temporarily in short-term marketable securities. The prospectus supplement relating to the an offering will contain a more detailed description of the use of proceeds of any specific offering of securities. 6 RATIO OF EARNINGS TO FIXED CHARGES The following table sets forth the ratio of our earnings to our fixed charges for each of the five years ended December 31, 1999. We base these ratios on our historical consolidated financial statements. For current information on the ratio or earnings to fixed charges, see the documents referred to under "Where You Can Find More Information" on page 3.
Historical -------------------------------------------------------------- Year Ended December 31, -------------------------------------------------------------- 1995 1996 1997 1998 1999 ------ -------- ------ -------- ------ Ratio of Earnings to Fixed Charges........... 2.28:1 -- 1.84:1 -- 5.75:1 Deficiency of Earnings to Fixed Charges (in millions)................................... -- $(2,288) -- $(1,834) --
Note to Computation of Ratio of Earnings to Fixed Charges (1) For the purpose of computing the ratio of earnings to fixed charges, earnings consist of pretax income (loss) from continuing operations, excluding minority interests in losses of consolidated subsidiaries, and fixed charges consist of pretax interest (including capitalized interest) on all indebtedness, amortization of debt discount and expense, and that portion of rental expense which we believe to be representative of interest. For the historical year ended December 31, 1996 and 1998, earnings were inadequate to cover fixed charges by the amounts shown. DESCRIPTION OF DEBT SECURITIES This section describes some of the general terms of the debt securities. The prospectus supplement describes some of the particular terms of the debt securities we are offering. The prospectus supplement also indicates the extent, if any, to which some of such general provisions may not apply to the debt securities being offered. We may offer under this prospectus up to $15,000,000,000 aggregate principal amount of debt securities, or if debt securities are issued at a discount, or in a foreign currency or composite currency, such principal amount as may be sold for an initial public offering price of up to $15,000,000,000 or its equivalent in other currencies. Unless otherwise specified in a supplement to this prospectus, the debt securities will be our direct, unsecured obligations and will rank equally with all of our other unsecured and unsubordinated indebtedness. The Indenture We will issue the debt securities under an indenture between us and Chase Manhattan Trust Company, National Association, which is serving as trustee. The indenture is an exhibit to the registration statement. We are summarizing some of the important provisions of the debt securities and the indenture. This is not a complete description of the important terms. You should read to the specific terms of the indenture for a complete statement of the terms of the indenture and the debt securities. When we use capitalized terms which we do not define here, those terms have the meanings given in the indenture. When we use references to sections, we 7 mean sections in the indenture. When we refer to those terms or use those references, we are incorporating those terms or sections by reference in this prospectus. General The indenture does not limit the amount of debt securities that we may issue under the indenture, nor does it limit other debt that we may issue. We may issue the debt securities at various times in different series, each of which may have different terms. We will establish the terms of each series of debt securities through a resolution of our board of directors, or under authority granted by our board, or under a supplement to the indenture. Unless a prospectus supplement relating to a particular series of debt securities provides otherwise, the indenture and the terms of the debt securities will not contain any covenants designed to afford holders of any debt securities protection in a highly leveraged or other transaction involving us, whether or not resulting in a change of control, that may adversely affect holders of the debt securities. The prospectus supplement relating to the particular series of debt securities we are offering includes the following information concerning those debt securities: . The title of the debt securities. . Any limit on the aggregate amount of the debt securities that we may offer. . The price at which we are offering the debt securities. We will usually express the price as a percentage of the principal amount. . The maturity date or dates, or the method for determining the maturity date or dates of the debt securities. . The interest rate or rates per annum on the debt securities. We may specify a fixed rate or a variable rate, or we may specify a method for determining such rate or rates, or we may offer debt securities that do not bear interest but that are sold at a substantial discount from the amount payable at maturity. . The date or dates from which interest on the debt securities will accrue. . The date or dates on which we will pay interest and the regular record dates for determining who is entitled to receive the interest. Unless we otherwise specify in the prospectus supplement, we will calculate interest on the basis of a year of 360 days of twelve 30-day months. . Where we will make payments on the debt securities and where you may transfer or exchange debt securities. . If applicable, the date or dates on which or after which, and the prices at which, we have the option or obligation to redeem the debt securities or you have the option to require us to redeem the debt securities and any detailed terms and provisions of those repurchase or redemption provisions, including any sinking fund or similar provisions. . The currency or currencies in which we will make payments on the debt securities. Payments on the debt securities may be in two or more currencies or in currency units or composite currencies. 8 . Whether payments on the debt securities will be determined from an index, formula or other method (which may be, but need not be, based on one or more currencies, currency units or composite currencies). . The name of any security registrar or paying agent or other agents for the debt securities, if the trustee will not be performing such functions. . The amount that we would be required to pay if the maturity of the debt securities is accelerated, if that amount is other than the principal amount. . Any special rights that the holders of the debt securities may have if specified events occur. . If applicable, any limitations on our rights to defease our obligations under the debt securities by depositing cash or securities. . Any additional or modified covenants or other material terms relating to the debt securities, or any provisions of the indenture that will not apply to the debt securities. . Any additional or changes in the events of default that will apply to the debt securities, or any events of default which will not apply to the debt securities. (Section 301). None of our stockholders, employees, officers, directors or incorporators, past, present or future, will have any personal liability in respect of our obligations of under the indenture or the debt securities on account of such status. (Section 113). Original Issue Discount Securities If debt securities are original issue discount securities, we will offer and sell them at a substantial discount below their stated principal amount. We will describe Federal income tax consequences and other special considerations applicable to any such original issue discount securities in the prospectus supplement. "Original issue discount security" means any security which provides that less than the full principal amount will be due if the maturity is accelerated or if the security is redeemed before its maturity. Foreign Currencies If we denominate the purchase price of any of the debt securities in a foreign currency or currencies or a foreign currency unit or units, or if the principal of and any premium and interest on any series of debt securities is payable in a foreign currency or currencies or a foreign currency unit or units, we will provide you with information on the restrictions, elections, general tax considerations, specific terms and other information with respect to that issue of debt securities and such foreign currency or currencies or foreign currency unit or units in the applicable prospectus supplement. Form and Denominations Unless we otherwise indicate in the prospectus supplement, the debt securities will be in fully registered form, without coupons, in denominations of $1,000 or any multiple thereof. (Section 302). Transfer and Exchange Each debt security will be represented by either one or more global securities registered in the name of The Depository Trust Company, as depositary, or a nominee (we will refer to any debt 9 security represented by a global debt security as a "book-entry debt security"), or a certificate issued in definitive registered form (we will refer to any debt security represented by a certificated security as a "certificated debt security") as set forth in the applicable prospectus supplement. Except as set forth under the heading "Book-Entry Debt Securities" below, book-entry debt securities will not be issuable in certificated form. In the case of certificated debt securities, you may transfer or exchange certificated debt securities at any office we maintain for this purpose in accordance with the terms of the indenture. No service charge will be made for any transfer or exchange of certificated debt securities, but we may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with a transfer or exchange. You may effect the transfer of certificated debt securities and the right to receive the principal of, premium, if any, and interest on certificated debt securities only by surrendering the certificate representing those certificated debt securities and either reissuance by us or the trustee of the certificate to the new holder or the issuance by us or the trustee of a new certificate to the new holder. (Section 305). Priority of the Debt Securities The debt securities will be our senior unsecured obligations and will rank pari passu (i.e., equally and ratably) with all of our other senior unsecured and unsubordinated indebtedness. The debt securities will be effectively subordinated to any of our secured indebtedness to the extent of the value of the assets securing that indebtedness. The indenture permits us and our Restricted Subsidiaries (defined below) to incur or permit to be outstanding secured indebtedness up to 10% of the total assets of WorldCom and our subsidiaries, in addition to permitted liens which are described below under "Certain Restrictions--Limitation on Liens." Our assets consist principally of the stock of and advances to our subsidiaries. Almost all of our operating assets are owned by our subsidiaries and we rely primarily on interest and dividends from our subsidiaries to meet our obligations to make payments on our debt and to pay our other expenses. The debt securities will be "structurally subordinated" to all obligations, including trade payables, of our subsidiaries, which means that, in case of insolvency or bankruptcy, the claims of the direct creditors of our subsidiaries would have to be satisfied before any funds would be available to the holders of the debt securities as creditors of WorldCom only. The indenture does not restrict our subsidiaries from incurring unsecured indebtedness. A "subsidiary" is an entity of which we own a majority of the outstanding voting securities having voting power for the election of directors (or their equivalent). Corporations owned by our subsidiaries are also considered to be our subsidiaries. A "Restricted Subsidiary" is any of our subsidiaries (1) which has substantially all of its property in the United States (other than its territories and possessions) and (2) in which the total of our securities of, loans and advances to and other investments in, such subsidiary exceeded 10% of our Consolidated Net Tangible Assets (as defined below) at the end of the quarter preceding the date of this determination, except that: . a subsidiary we acquire after the date of the indenture will not be a Restricted Subsidiary unless our Board of Directors designates it as such or unless it is treated similarly under our $10.75 billion bank credit facilities or another agreement we enter into for borrowed money; 10 . a special purpose "receivables subsidiary," which is a wholly-owned subsidiary created specifically to sell, convey, or grant a security interest in or otherwise transfer undivided percentage interests in its receivables, will not be considered a Restricted Subsidiary; and . any subsidiary we have designated as unrestricted for purposes of our $10.75 billion bank credit facilities or another agreement we enter into for borrowed money will not be considered a Restricted Subsidiary. "Property" means any interest of any person in any kind of property or asset, whether real, personal or mixed, or tangible or intangible (including capital stock in other corporations), but it does not include capital stock that we have issued to others. "Capital stock" means shares or other equivalents of corporate stock, partnership interest or any other equity interest, but excludes any debt security convertible or exchangeable into an equity interest. Our "Consolidated Net Tangible Assets" are our consolidated total assets (with our subsidiaries) as reflected in our most recent balance sheet, less: . current liabilities, excluding current maturities of long-term debt and capital lease obligations (which is an indebtedness represented by obligations under a lease that we are required to capitalize for financial reporting purposes); and . goodwill, trademarks, patents and minority interests of others. Certain Restrictions Consolidation, Merger and Sale of Assets We may not consolidate or merge with or sell, lease or convey all or substantially all of our assets to, any other corporation unless (a) the surviving corporation (if it is not WorldCom) is a corporation organized and existing under the laws of the United States or one of the fifty United States and it expressly assumes (pursuant to a supplemental indenture) to pay the principal and any interest on your debt securities and to perform and observe all of the covenants and conditions under the indenture, and (b) immediately after such transactions, there is no default in the performance of any of our covenants or the conditions of the indenture. Upon any such consolidation, merger or sale, the successor corporation will succeed to and be substituted for us under the indenture. (Section 801). Limitation on Liens A lien is a preference arrangement on property, such as: . a mortgage or deed of trust; . a pledge; . a hypothecation; . an assignment; . a deposit arrangement; . a security interest; . a charge; . an easement or zoning restriction that materially impairs usefulness or marketability; . an encumbrance; 11 . a preference; . a priority; . a security agreement; . a capital lease obligation; . a conditional sale; . any other agreement that has the same economic effect as any of the above; or . any "sale and leaseback transaction," which is an arrangement whereby we, or a Restricted Subsidiary, would sell and then lease back property from the purchaser. Under the indenture, we may not, and we may not allow our Restricted Subsidiaries to, allow any lien on any of our property or assets (which includes capital stock), unless the lien secures your debt securities equally and ratably with, or prior to, any other indebtedness secured by such lien, subject to certain exceptions described below. (Section 1004). The indenture excepts from this limitation secured debt which we or our Restricted Subsidiaries may issue, assume, guarantee or permit to exist up to 10% of the value of our total assets as shown on our most recent balance sheet at the time. This restriction will not apply to: . liens existing at the date of the indenture; . liens on property that exist when we acquire the property and liens that secure payment of the purchase price of the property; . liens that secure debt which a Restricted Subsidiary owes to us or to another Restricted Subsidiary; . liens on property, shares of stock or indebtedness of any entity that exists when (a) it becomes a Restricted Subsidiary, (b) is merged into or consolidated with us or a Restricted Subsidiary, or (c) we or a Restricted Subsidiary acquires all or substantially all of the assets of the entity, provided that no such lien extends to any other property of us or a Restricted Subsidiary; . liens on property to secure debt incurred for development or improvement of the property; . liens securing (a) nondelinquent performance of bids or contracts (other than for borrowed money, obtaining of advances or credit or the securing of debt), (b) contingent obligations on surety and appeal bonds and (c) other similar nondelinquent obligations, in each case incurred in the ordinary course of business; . liens securing capital lease obligations, provided that (a) any such lien attaches to the property within 270 days after the acquisition thereof and (b) such lien attaches solely to the property so acquired; . liens arising solely by virtue of any statutory or common law provision relating to banker's liens, rights of set-off or similar rights and remedies as to deposit account or other funds, provided that such deposit account is not a dedicated cash collateral account and is not subject to restrictions against our access in excess of those set forth by 12 regulations promulgated by the Federal Reserve Board and such deposit account is not intended by us to provide collateral to the depository institution; . pledges or deposits under worker's compensation laws, unemployment insurance laws or similar legislation; . statutory and tax liens for sums not yet due or delinquent or which are being contested or appealed in good faith by appropriate proceedings; . liens arising solely by operation of law and in the ordinary course of business, such as mechanics', materialmen's, warehousemen's and carriers' liens and liens of landlords or of mortgages of landlords on fixtures and movable property located on premises leased in the ordinary course of business; . liens on personal property (other than shares or debt of Restricted Subsidiaries) securing loans maturing in not more than one year or on accounts receivables in connection with a receivables financing program; or . extensions, renewals or replacement of any of the liens described above, if limited to all or any part of the same property securing the original lien. Events of Default, Notice and Waiver An event of default in respect of any series of debt securities means: . default for 30 days in payment of any interest installment; . default in payment of principal, premium, if any, or sinking fund obligation when due; . default, for 90 days after we receive notice as provided in the indenture, in performance of any other covenant or breach of any warranty in the indenture governing such series; . certain events of our bankruptcy, insolvency or reorganization or receivership; and . any other events which we may specify for such series, which will be indicated in the prospectus supplement for such series. (Section 501). Within 90 days after a default in respect of any series of debt securities, the trustee must give to the holders of such series notice of all uncured and unwaived defaults by us known to it. However, except in the case of default in payment, the trustee may withhold such notice if it determines that such withholding is in the interest of such holders. (Section 601). If an event of default occurs in respect of any outstanding series of debt securities, the trustee or the holders of not less than 25% in principal amount of the outstanding debt securities of that series may declare the principal amount (or, if the debt securities of that series are original issue discount securities or indexed securities, such portion of the principal amount as may be specified in the terms thereof) of all of the debt securities of that series to be due and payable immediately by written notice thereof to us (and to the trustee if given by the holders). However, at any time after such a declaration of acceleration but before a judgment or decree for payment of the money due has been obtained, the holders of a majority in principal amount of outstanding debt securities of such series may, subject to certain conditions, rescind and annul such acceleration if all events of default, other than the non-payment of accelerated principal (or 13 premium, if any) or interest on debt securities of such series have been cured or waived as provided in the indenture. (Section 502). The holders of a majority in principal amount of the outstanding debt securities of a series, on behalf of the holders of all debt securities of such series, may waive any past default and its consequences, but may not waive an uncured default in payment or default which cannot be waived without the consent of the holders of all outstanding securities of that series. (Section 513). Within 120 days after the close of each fiscal year, we must file with the trustee a statement, signed by specified officers, stating whether or not such officers have knowledge of any default under the indenture and, if so, specifying each such default and the nature and status thereof. (Section 1005). Subject to provisions in the indenture relating to its duties in case of default, the trustee is not required to take action at the request of any holders of debt securities, unless such holders have offered to the trustee reasonable security or indemnity. (Section 602). Subject to such indemnification requirements and certain limitations in the indenture, if any event of default has occurred, the holders of a majority in principal amount of the outstanding debt securities of any series may direct the time, method and place of conducting proceedings for remedies available to the trustee, or exercising any trust or power conferred on the trustee, in respect of such series. (Section 512). Modification or Amendment of the Indenture We and the trustee may enter into supplemental indentures without the consent of the holders for certain purposes, including: . to evidence the succession of another entity to WorldCom and the assumption by such entity of our covenants in the indenture; . to add to our covenants for the benefit of all or any series of the debt securities or to surrender any of our rights or powers under the indenture; . to add events of default for the benefit of the holders of all or any series of the debt securities, which may provide for a particular period of grace after default or may provide for an immediate enforcement upon such default or may limit the remedies available to the trustee upon such default or may limit the right of the holders to waive such default; . to change or eliminate any provisions of the indenture, as long as such change or elimination is effective only when there are no outstanding debt securities of any series created prior to the execution of such supplemental indenture which is entitled to the benefit of the provisions being changed or eliminated; . to provide security for the debt securities; . to establish the form or terms of any series of debt securities in accordance with the indenture; 14 . to provide for the acceptance and appointment of a successor trustee for any series of debt securities or to provide for or facilitate the administration of the trusts under the indenture by more than one trustee; . to cure any ambiguity, to correct or supplement any provision of the indenture which may be defective or inconsistent with any other provision, or to make any other provisions with respect to matters or questions arising under the indenture which are not inconsistent with the provisions of the indenture, as long as the additional provisions do not adversely affect the interests of any holders in any material respects; or . to supplement any of the provisions of the indenture to such extent as shall be necessary to permit or facilitate the defeasance and discharge of any series of the debt securities in accordance with the indenture, as long as such action does not adversely affect the interests of any holders in any material respect. (Section 901). If we receive the consent of the holders of a majority in principal amount of the outstanding debt securities affected, we may enter into supplemental indentures with the trustee that would: . add, change or eliminate provisions in the indenture; or . change the rights of the holders of any series of debt securities. However, unless we receive the consent of all of the affected holders, we may not enter into supplemental indentures that would, with respect to the debt securities of such holders: . change the maturity of the principal, premium, if any, or any installment of principal or interest; . reduce the principal amount or any premium or additional payments; . reduce the interest rate; . reduce any amount payable on redemption or reduce the amount of the principal of an original issue discount security that would be payable on acceleration or provable in bankruptcy, or adversely affect any right of repayment of any holder; . adversely change any right you may have to require repayment; . change the place where, or the currency or currencies in which, payments are made; . impair or affect your right to institute suit for payment; . reduce the requirement for majority approval of supplemental indentures; or . modify any of the provisions of the indenture relating to supplemental indentures or waiver of past defaults with respect to such series, except to increase any such percentage or to provide that certain other provisions of the indenture cannot be modified or waived with respect to such series without the consent of the holders of each such debt security. (Section 902). A supplemental indenture which changes or eliminates any covenant or other provision of the indenture which was included solely for the benefit of one or more series of the debt securities, or which modifies the rights of holders of debt securities of such series with respect to such covenant or other provision, will only require the consent of the holders of at least a majority of 15 the outstanding debt securities of such one or more particular series. It is not necessary for the holders of the debt securities to approve the particular form of any proposed supplemental indenture, but it is sufficient if such holders approve the substance of the proposed supplemental indenture. (Section 902). Defeasance; Satisfaction and Discharge Legal Defeasance. The indenture provides that, unless otherwise provided by the terms of the applicable series of debt securities, we may be discharged from any and all obligations in respect of the debt securities of any series (except for certain obligations to register the transfer or exchange of debt securities of such series, to replace stolen, lost or mutilated debt securities of such series, and to maintain paying agencies and certain provisions relating to the treatment of funds held by paying agents). We will be so discharged upon the deposit with the trustee, in trust, of money and/or government obligations (which term is described below) that, through the payment of interest and principal in accordance with their terms, will provide money in an amount sufficient in the opinion of a nationally recognized firm of independent public accountants to pay and discharge each installment of principal, premium, if any, and interest on and any mandatory sinking fund payments in respect of the debt securities of that series on the stated maturity of those payments in accordance with the terms of the indenture and those debt securities. This discharge may occur only if, among other things, we have delivered to the trustee an opinion of counsel to the effect that the holders of the debt securities of that series will not recognize income, gain or loss for United States federal income tax purposes as a result of the defeasance and will be subject to United States federal income tax on the same amounts and in the same manner and at the same times as would have been the case if the defeasance had not occurred. (Sections 1402 and 1404). Defeasance of Certain Covenants. The indenture provides that, unless otherwise provided by the terms of the applicable series of debt securities, upon compliance with certain conditions: . we may omit to comply with the covenants described under the heading "Consolidation, Merger and Sale of Assets" and "Limitations on Liens" and certain other covenants set forth in the indenture, as well as any additional covenants which may be set forth in the applicable prospectus supplement; and . any omission to comply with those covenants will not constitute a default or an event of default with respect to the debt securities of that series, which we refer to as a "covenant defeasance." (Section 1403). The conditions include: . depositing with the trustee money and/or Government obligations, that, through the payment of interest and principal in accordance with their terms, will provide money in an amount sufficient in the opinion of a nationally recognized firm of independent public accountants to pay and discharge each installment of principal of, premium, if any, and interest on and any mandatory sinking fund payments in respect of the debt securities of that series on the stated maturity of those payments in accordance with the terms of the indenture and those debt securities; and 16 . delivering to the trustee an opinion of counsel to the effect that the holders of the debt securities of that series will not recognize income, gain or loss for United States federal income tax purposes as a result of the covenant defeasance and will be subject to United States federal income tax on the same amounts and in the same manner and at the same times as would have been the case if the covenant defeasance had not occurred. (Section 1404). Covenant Defeasance and Events of Default. In the event we exercise our option to effect covenant defeasance with respect to any series of debt securities and the debt securities of that series are declared due and payable because of the occurrence of any event of default, the amount of money and/or Government obligations on deposit with the trustee will be sufficient to pay amounts due on the debt securities of that series at the time of their stated maturity but may not be sufficient to pay amounts due on the debt securities of that series at the time of the acceleration resulting from the event of default. However, we will remain liable for those payments. The term "government obligations" means securities which are (1) direct obligations of the United States or the government which issued the foreign currency in which the debt securities are payable, for the payment of which its full faith and credit is pledged, or (2) obligations of a person controlled or supervised by and acting as an agency or instrumentatlity of the United States or the government which issued such foreign currency, the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States or such foreign government, which, in either case, are not callable or redeemable at the option of the issuer thereof, and also includes a depository receipt issued by a bank or trust company as custodian with respect to any such Government obligation or a specific payment of interest on or principal of any such Government obligation held by such custodian for the account of the holder of a depository receipt, provided that, except as required by law, such -------- custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government obligation or the specific payment of interest on or principal of the Government obligation evidenced by such depository receipt. (Section 101). We may exercise our defeasance option even if we have already exercised our covenant defeasance option. There may be additional provisions relating to defeasance which we will describe in the prospectus supplement. (Sections 1401 and 1402). Governing Law The indenture and the debt securities will be governed by, and construed in accordance with, the internal laws of the State of New York. (Section 111). Title WorldCom, the trustee and any agent of us or the trustee may treat the person in whose name a debt security is registered as the absolute owner thereof, whether or not such debt security may be overdue, for the purpose of receiving payment and for all other purposes. (Section 309). 17 Regarding the Trustee The trustee is Chase Manhattan Trust Company, National Association. The trustee is a lender to us under our bank credit agreements. From time to time, we may enter into other banking and other commercial relationships with the trustee. There may be more than one trustee under the indenture, each with respect to one or more series of debt securities. (Section 101). Any trustee may resign or be removed with respect to one or more series of debt securities, and a successor trustee may be appointed to act with respect to such series. (Section 608). If two or more persons are acting as trustee with respect to different series of debt securities, each trustee will be a trustee of a trust under the indenture separate from the trust administered by any other such trustee. Except as otherwise indicated in this prospectus, any action to be taken by the trustee may be taken by each such trustee with respect to, and only with respect to, the one or more series of debt securities for which it is trustee under the indenture. (Section 609). PLAN OF DISTRIBUTION We may sell the debt securities to one or more underwriters for public offering and sale by them and may also sell the debt securities to investors directly or through agents. We will name any underwriter or agent involved in the offer and sale of debt securities in the applicable prospectus supplement. We have also reserved the right to sell or exchange debt securities directly to investors on our own behalf in those jurisdictions where we are authorized to do so. We may distribute the debt securities from time to time in one or more transactions: . at a fixed price or prices, which may be changed; . at market prices prevailing at the time of sale; . at prices related to such prevailing market prices; or . at negotiated prices. We may also, from time to time, authorize dealers, acting as our agents, to offer and sell debt securities upon the terms and conditions set forth in the applicable prospectus supplement. In connection with the sale of debt securities, we, or the purchasers of debt securities for whom the underwriters may act as agents, may compensate underwriters in the form of underwriting discounts or commissions. Underwriters may sell the debt securities to or through dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for whom they may act as agent. Unless otherwise indicated in a prospectus supplement, an agent will be acting on a best efforts basis and a dealer will purchase debt securities as a principal, and may then resell the debt securities at varying prices to be determined by the dealer. We will describe in the applicable prospectus supplement any compensation we pay to underwriters or agents in connection with the offering of debt securities, and any discounts, concessions or commissions allowed by underwriters to participating dealers. Dealers and agents participating in the distribution of debt securities may be deemed to be underwriters, and any discounts and commissions received by them and any profit realized by them on resale of the debt securities may be deemed to be underwriting discounts and commissions. We may enter into agreements to indemnify underwriters, dealers and agents against certain civil liabilities, 18 including liabilities under the Securities Act of 1933, and to reimburse these persons for certain expenses. To facilitate the offering of debt securities, certain persons participating in the offering may engage in transactions that stabilize, maintain, or otherwise affect the price of the debt securities. This may include over- allotments or short sales of the debt securities, which involves the sale by persons participating in the offering of more debt securities than we sold to them. In these circumstances, these persons would cover such over-allotments or short positions by making purchases in the open market or by exercising their over-allotment option. In addition, these persons may stabilize or maintain the price of the debt securities by bidding for or purchasing debt securities in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating in the offering may be reclaimed if debt securities sold by them are repurchased in connection with stabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of the debt securities at a level above that which might otherwise prevail in the open market. These transactions may be discontinued at any time. Certain of the underwriters, dealers or agents and their associates may engage in transactions with and perform services for us in the ordinary course of our business. Each series of debt securities offered will be a new issue of securities and will have no established trading market. Such debt securities offered may or may not be listed on a national securities exchange. No assurance can be such as to the liquidity of or the existence of trading markets for any debt securities offered. BOOK-ENTRY DEBT SECURITIES The prospectus supplement will indicate whether we are issuing the related debt securities as book-entry securities. Book-entry securities of a series will be issued in the form of one or more global notes that will be deposited with The Depository Trust Company, New York, New York, or "DTC," as depositary, or a nominee, and will evidence all of the debt securities of that series. This means that we will not issue certificates to each holder. We may issue one or more global securities to DTC, which will keep a computerized record of its participants (for example, your broker) whose clients have purchased the debt securities. DTC has indicated it intends to follow the following procedures with respect to book-entry debt securities. Additional or differing terms of the depositary arrangements will be described in the applicable prospectus supplement. Ownership of beneficial interests in book-entry debt securities will be limited to persons that have accounts with DTC for the related global debt security, referred to as "participants," or persons that may hold interests through participants. Upon the issuance of a global debt security, DTC will credit, on its book-entry registration and transfer system, the participants' accounts with the respective principal amounts of the book-entry debt securities represented by such global debt security beneficially owned by such participants. The accounts to be credited will be designated by any dealers, underwriters or agents participating in the distribution of the book-entry debt securities. Ownership of book-entry debt securities will be shown on, and the transfer of such ownership interests will be effected only through, records maintained by DTC for the related global debt security (with respect to interests of participants) and on the records of participants (with respect to interests of persons holding through participants). 19 Unless it is exchanged in whole or in part for a security evidenced by individual certificates, a global security may not be transferred, except that DTC, its nominees and their successors may transfer a global security as a whole to one another. The laws of some jurisdictions require that certain purchasers of securities such as debt securities take physical delivery of such securities in definitive form. Such limits and such laws may impair the ability to acquire or transfer beneficial interests in the global security. So long as DTC for a global debt security, or its nominee, is the registered owner of that global debt security, DTC or its nominee, as the case may be, will be considered the sole owner or holder of the book-entry debt securities represented by such global debt security for all purposes under the indenture. Except as described below, beneficial owners of book-entry debt securities will not be entitled to have securities registered in their names, will not receive or be entitled to receive physical delivery of a certificate in definitive form representing securities and will not be considered the owners or holders of those securities under the indenture. Accordingly, each person beneficially owning book-entry debt securities must rely on the procedures of DTC for the related global debt security and, if such person is not a participant, on the procedures of the participant through which such person owns its interest, to exercise any rights of a holder under the indenture. We understand, however, that under existing industry practice, DTC will authorize the persons on whose behalf it holds a global debt security to exercise certain rights of holders of debt securities, and the indenture provides that we, the trustee and our respective agents will treat as the holder of a debt security the persons specified in a written statement of DTC with respect to that global debt security for purposes of obtaining any consents or directions required to be given by holders of the debt securities pursuant to the indenture. (Section 309). We will make payments on each series of book-entry debt securities to DTC or its nominee, as the sole registered owner and holder of the global security. Neither WorldCom, the trustee nor any of their agents will be responsible or liable for any aspect of DTC's records relating to or payments made on account of beneficial ownership interests in a global security or for maintaining, supervising or reviewing any of DTC's records relating to such beneficial ownership interests. We expect that DTC, upon receipt of any payment of principal of, premium or interest on a global debt security, will immediately credit participants' accounts with payments in amounts proportionate to the respective amounts of book-entry debt securities held by each participant as shown on the records of DTC. We also expect that payments by participants to owners of beneficial interests in book-entry debt securities held through those participants will be governed by standing customer instructions and customary practices, as is now the case with the securities held for the accounts of customers in bearer form or registered in "street name." However, payments will be the responsibility of those participants and not of DTC, the trustee or us. We will issue certificated debt securities in exchange for each global debt security only if: . DTC notifies us that it is unwilling or unable to continue as depositary or if DTC ceases to be a clearing agency registered under the Securities Exchange Act of 1934 and we do not appoint a successor within 90 days; . we decide that the global security shall be exchangeable; or 20 . there is an event of default under the indenture or an event which with the giving of notice or lapse of time or both would become an event of default with respect to the debt securities represented by such global security. (Section 305) If that occurs, we will issue debt securities of that series in certificated form in exchange for such global security. An owner of a beneficial interest in the global security then will be entitled to physical delivery of a certificate for debt securities of such series equal in principal amount to such beneficial interest and to have such debt securities registered in its name. We would issue the certificates for such debt securities in denominations of $1,000 or any larger amount that is an integral multiple thereof, and we would issue them in registered form only, without coupons. (Section 305) DTC has provided us the following information: DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the United States Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered under the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds securities that its direct participants deposit with DTC. DTC also records the settlement among direct participants of securities transactions, such as transfers and pledges, in deposited securities through computerized records for direct participant's accounts. This eliminates the need to exchange certificates. Direct participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. DTC's book-entry system is also used by other organizations such as securities brokers and dealers, banks and trust companies that work through a direct participant. The rules that apply to DTC and its participants are on file with the SEC. DTC is owned by a number of its direct participants and by the New York Stock Exchange, Inc., The American Stock Exchange, Inc. and the National Association of Securities Dealers, Inc. No fees or costs of DTC will be charged to you. We have obtained the foregoing information concerning DTC and DTC's book-entry system from sources we believe to be reliable, but we take no responsibility for the accuracy of this information. When so provided in the prospectus supplement, investors in the global securities representing any of the debt securities issued hereunder may hold a beneficial interest in such global securities through DTC, Cedel S.A. ("CEDEL"), or the Euroclear system or through participants. The global securities may be traded as home market instruments in both the European and U.S. domestic markets. Initial settlement and all secondary trades will settle as set forth in the applicable prospectus supplement. CERTAIN UNITED STATES FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS FOR NON-U.S. HOLDERS If you are a beneficial owner of global securities holding securities, directly or indirectly, through CEDEL or Euroclear (or through DTC if you have an address outside the United States), you will generally be subject to the 30% United States withholding tax that generally applies to payments of interest (including original issue discount) on registered debt issued by United States persons. You will not be subject to the 30% United States withholding tax if: 21 (1) each clearing system, bank or other financial institution that holds customers' securities in the ordinary course of its trade or business in the chain of intermediaries between you and us (as the entity required to withhold tax) complies with applicable certification requirements; and (2) you take one of the steps described below to obtain an exemption or reduced tax rate: The Internal Revenue Service ("IRS") issued new withholding regulations (the "withholding regulations"), which make certain modifications to withholding, backup withholding and information reporting rules. The withholding regulations attempt to unify certification requirements and modify certain reliance standards. The withholding regulations will generally be effective for payments made after December 31, 2000, although you may begin complying with the withholding regulations immediately. . Exemption for non-U.S. persons (Form W-8 or new Form W-8BEN). If you are a non-U.S. person (as defined below) and you are not a beneficial owner owning, actually or constructively, 10% or more of the total combined voting power of all classes of our stock entitled to vote or a controlled foreign corporation that is related to us actually or constructively through stock ownership, you can obtain a complete exemption from the withholding tax by filing a properly completed Form W-8 (Certificate of Foreign Status) or new Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding). The Form W-8 is valid until the earlier of (i) three years beginning on the date that the form is signed, or (ii) December 31, 2000. After December 31, 2000, only Form W-8BEN will be acceptable. Form W- 8BEN is valid for a period of three years beginning on the date that the form is signed. If the information shown on Form W-8 or Form W-8BEN changes, you must file a new Form W-8 or Form W-8BEN within 30 days of such change. . Exemption for non-U.S. persons with effectively connected income (Form 4224 or new Form W-8ECI). If you are a non-U.S. person (as defined below), including a non-U.S. corporation or bank with a United States branch, for which the interest income is effectively connected with your conduct of a trade or business in the United States, you can obtain an exemption from the withholding tax by filing a properly completed Form 4224 (Exemption from Withholding of Tax on Income Effectively Connected with the Conduct of a Trade or Business in the United States) or new Form W-8ECI (Certificate of Foreign Person's Claim for Exemption from Withholding on Income Effectively Connected with the Conduct of a Trade or Business in the United States). The Form 4224 is valid until the earlier of (i) one year beginning on the date the form is signed, or (ii) December 31, 2000. After December 31, 2000, only Form W-8ECI will be acceptable. Form W-8ECI is valid for a period of three years beginning on the date that the form is signed. . Exemption or reduced rate for non-U.S. persons resident in treaty countries (Form 1001 or new Form W-8BEN). If you are a non-U.S. person (as defined below) that is entitled to the benefits of an income tax treaty with the United States, you can obtain an exemption or reduced tax rate (depending on the treaty terms) by filing a properly completed Form 1001 (Ownership, Exemption or Reduced Rate Certificate) or new Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding). If Form 1001 is provided and the treaty provides only for a reduced rate, we will withhold tax at that rate unless you alternatively file Form W-8. Either you or your agent may file Form 1001 or Form W-8BEN. The Form 1001 is valid until the earlier of (i) three years beginning on the 22 date that the form is signed, or (ii) December 31, 2000 . After December 31, 2000, only Form W-8BEN will be acceptable. Form W-8BEN is valid for a period of three years beginning on the date that the form is signed. . Exemption for U.S. Persons (Form W-9). If you are a U.S. person, you can obtain a complete exemption from the withholding tax by filing a properly completed Form W-9 (Payer's Request for Taxpayer Identification Number and Certification). United States Federal Income Tax Reporting Procedure Under the existing rules you (or, in the case of a Form 1001 or a Form 4224 filer, your agent) must submit the appropriate form to the entity through whom you directly hold the global security. For example, if you are listed directly on the books of Euroclear or CEDEL as the holder of the debt security, you must provide Euroclear or CEDEL, as the case may be, the IRS Form. Each person through which a debt security is held must submit, on your behalf, the IRS Form (or in certain cases a copy thereof) under applicable procedures to the person through which it holds the debt security, until the IRS Form is received by the U.S. person who would otherwise be required to withhold U.S. federal income tax from interest payable on the debt security. For example, in the case of debt securities held through Euroclear or CEDEL, the IRS Form (or a copy thereof) must be received by the U.S. depository of such clearing agency. The withholding regulations revise the procedures that withholding agents and payees must follow to comply with, or to establish an exemption from, withholding for payments made after December 31, 2000. You should consult your own tax advisors regarding compliance with these procedures under the withholding regulations. The term "U.S. person" means: . a citizen or resident of the United States; . a corporation or partnership organized in or under the laws of the United States or any State thereof or the District of Columbia; . an estate that is subject to U.S. federal income taxation regardless of the source of its income; or . a trust if (A) a court within the United States is able to exercise primary supervision over the trust's administration and (B) one or more U.S. persons have the authority to control all the trust's substantial decisions. Notwithstanding the preceding sentence, to the extent provided in Treasury Regulations, certain trusts in existence on August 20, 1996, and treated as U.S. persons prior to such date, that elect to continue to be treated as U.S. persons will also be a U.S. person. The term "non-U.S. person" means any person who is not a U.S. person as described above. The terms "United States" and "U.S." means the United States of America (including the States and the District of Columbia). This summary does not deal with all aspects of U.S. federal income and withholding taxes, the application of the withholding regulations or the application of any U.S. income or estate tax treaty that may be relevant to foreign beneficial owners of the global securities. You are advised to consult your own tax advisors for specific tax advice concerning your holding and disposing of beneficial interests in the global securities. 23 LAWYERS The legality of the debt securities offered by this prospectus have been passed upon for WorldCom by P. Bruce Borghardt, Esq., General Counsel--Corporate Development of WorldCom. Mr. Borghardt is paid a salary by WorldCom, is a participant in various employee benefit plans offered by WorldCom to employees of WorldCom generally and owns and has options to purchase shares of WorldCom common stock. Bryan Cave LLP, St. Louis, Missouri, is also representing us in connection with some of the aspects of the debt securities. EXPERTS The consolidated financial statements of WorldCom 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 WorldCom's 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 WorldCom's 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. The consolidated financial statements and schedules of Sprint and the combined financial statements and schedules of the Sprint FON Group and the Sprint PCS Group appearing in WorldCom's Current Report on Form 8-K-2 dated April 11, 2000 (filed April 11, 2000), have been audited by Ernst & Young LLP, independent auditors, as set forth in their reports thereon included therein and incorporated herein by reference which, as to the years 1998 and 1997 for Sprint and the Sprint PCS Group, are based in part on the reports of Deloitte & Touche LLP, independent auditors. Such consolidated and combined financial statements and schedules are incorporated herein by reference in reliance upon such reports given on the authority of such firm as experts in accounting and auditing. The consolidated financial statements of Sprint Spectrum Holding Company, L.P. as of December 31, 1998, and for each of the years in the two-year period ended December 31, 1998, have been audited by Deloitte & Touche LLP, independent auditors, as stated in their report which is included in WorldCom's Current Report on Form 8-K-2 dated April 11, 2000 (filed April 11, 2000), and are incorporated herein by reference, and have been incorporated in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. 24 PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution The following table sets forth the expenses (other than underwriting discounts and commissions), which other than the SEC registration fee are estimates, payable by the Company in connection with the sale and distribution of the securities registered hereby: SEC registration fee...................................... $3,960,000 Printing expenses......................................... $ 80,000 Trustee's fees and expenses............................... $ 50,000 Accountants' fees and expenses............................ $ 30,000 Legal fees and expenses................................... $ 200,000 Miscellaneous............................................. $ 15,000 ---------- Total................................................ $4,335,000 ========== 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 WorldCom 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 WorldCom'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 WorldCom shall be limited to the fullest extent permitted by amendments to Georgia law. 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 an individual 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 WorldCom) in which the individual is made a party because he or she is or was a director of WorldCom, or, while a director of WorldCom, such individual is or was serving at the request of WorldCom, as a director, officer, partner, trustee, employee or agent of another foreign or II-1 domestic corporation, partnership, joint venture, trust, employee benefit plan or other enterprise. This 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, 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, whether or not involving action in his or her official capacity. 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 under Section 14-2-855 of the GBCC 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 WorldCom, 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 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 WorldCom; (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. II-2 Section 14-2-857 of the GBCC provides that an officer of WorldCom (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, WorldCom may, as provided by either WorldCom's Second Amended and Restated Articles of Incorporation as amended, WorldCom'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 WorldCom's Restated Bylaws and Article Twelve of WorldCom's Second Amended and Restated Articles of Incorporation, as amended, are consistent with the foregoing provisions of the GBCC. However, WorldCom'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, WorldCom'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 his or her conduct was unlawful, or in the case of a proceeding by or in the right of WorldCom, to which such director was adjudged liable to WorldCom, unless a court shall determine that the director is fairly and reasonably entitled to indemnification in view of all the circumstances. WorldCom's Restated Bylaws extend the indemnification available to officers under the GBCC to employees and agents. Reference is made to the form of Underwriting Agreement Standard Provisions filed as Exhibit 1.1 with respect to indemnification of the Company, its directors and certain officers by the Underwriters or by an agent, as the case may be. Item 16. Exhibits See Exhibit Index. Item 17. Undertakings The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (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 hereof) 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 Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% 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; II-3 provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or 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 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. (4) 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 Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this registration statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (5) 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 Securities and Exchange 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 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 Act and will be governed by the final adjudication of such issue. (6) The undersigned registrant hereby undertakes that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-4 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 Amendment No. 1 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Clinton, State of Mississippi, on May 11, 2000. WORLDCOM, Inc. By: /s/ Scott D. Sullivan --------------------------- Scott D. Sullivan Chief Financial Officer Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to Registration Statement has been signed by the following persons in the capacities and on the dates indicated. Name Title Date ---- ----- ---- /s/ Clifford Alexander, Jr.* Director May 11, 2000 - --------------------------- Clifford Alexander, Jr. /s/ James C. Allen* Director May 11, 2000 - --------------------------- James C. Allen /s/ Judith Areen* Director May 11, 2000 - --------------------------- Judith Areen /s/ Carl J. Aycock* Director May 11, 2000 - --------------------------- Carl J. Aycock /s/ Max E. Bobbitt* Director May 11, 2000 - --------------------------- Max E. Bobbitt II-5 Director, President and Chief Executive Officer /s/ Bernard J. Ebbers* (Principal Executive May 11, 2000 - --------------------------- Officer) Bernard J. Ebbers /s/ Francesco Galesi* Director May 11, 2000 - --------------------------- Francesco Galesi /s/ Stiles A. Kellett, Jr.* Director May 11, 2000 - --------------------------- Stiles A. Kellett, Jr. /s/ Gordon S. Macklin* Director May 11, 2000 - --------------------------- Gordon S. Macklin /s/ John A. Porter* Director May 11, 2000 - --------------------------- John A. Porter /s/ Bert C. Roberts, Jr.* Director May 11, 2000 - --------------------------- Bert C. Roberts, Jr. Vice Chairman of the Board, Chief Operations /s/ John W. Sidgmore* Officer and Director May 11, 2000 - --------------------------- John W. Sidgmore Director and Chief Financial Officer (Principal Financial /s/ Scott D. Sullivan Officer and Principal May 11, 2000 - --------------------------- Accounting Officer) Scott D. Sullivan /s/ Lawrence C. Tucker* Director May 11, 2000 - --------------------------- Lawrence C. Tucker Director May 11, 2000 - --------------------------- Juan Villalonga *By:/s/ Scott D. Sullivan --------------------- Scott D. Sullivan Attorney-in-Fact II-6 EXHIBIT INDEX ------------- Exhibit No. Description - ----------- ----------- 1.1 Form of Underwriting Agreement Standard Provisions for debt securities, with form of Terms Agreement + 4.1 Form of indenture between WorldCom, Inc. and Chase Manhattan Trust Company, National Association* 5.1 Validity Opinion of WorldCom, Inc. Counsel* 8.1 Opinion of Bryan Cave LLP as to certain tax matters 12.1 Statement re Computation of Ratio of Earnings to Fixed Charges* 23.1 Consent of Arthur Andersen LLP 23.2 Consent of KPMG LLP 23.3 Consent of Ernst & Young LLP 23.4 Consent of Deloitte & Touche LLP 23.5 Consent of WorldCom, Inc. Counsel (included in Exhibit 5.1)* 23.6 Consent of Bryan Cave LLP (included on Exhibit 8.1) 24.1 Power of Attorney (included in Signature Page)* 25.1 Statement of Eligibility of trustee on Form T-1 with respect to the indenture __________________ * Previously filed. + Indicates document to be filed as an exhibit to a subsequent report on Form 8-K or Form 10-Q and incorporated herein. II-7 EX-8.1 2 OPINION OF BRYAN CAVE LLP EXHIBIT 8.1 [Letterhead of Bryan Cave LLP] May 11, 2000 WorldCom, Inc. 500 Clinton Center Drive Clinton, Mississippi 39056 Ladies and Gentlemen: We have acted as special tax counsel to WorldCom, Inc., a Georgia corporation (the "Company"), in connection with the preparation of a Prospectus (the "Prospectus") included as part of the Registration Statement on Form S-3, File No. 333-34578 (the "Registration Statement") filed with the Securities and Exchange Commission on April 11, 2000 under the Securities Act of 1933 and amended by Pre-effective Amendment No. 1 thereto, filed today. The Prospectus provides the Company may offer from time to time its Debt Securities in the aggregate principal amount of up to U.S. $15 billion ($15,000,000,000). Except as otherwise indicated herein, all capitalized terms used in this letter have the same meaning assigned to them in the Registration Statement. In rendering our opinion, we have examined and relied upon without independent investigation as to matters of fact the Prospectus and such other documents, certificates and instruments as we have considered relevant for purposes of this opinion. We have assumed without independent verification that the Prospectus is accurate and complete in all material respects, and our opinion is conditioned expressly on, among other things, the accuracy as of the date hereof, and the continuing accuracy, of all of such facts, information, covenants, statements and representations through and as of the date of consummation of the filing. Any material changes in the facts referred to, set forth or assumed herein or in the Prospectus may affect the conclusions stated herein. In rendering our opinion, we have considered the applicable provisions of the Internal Revenue Code of 1986, as amended and in effect (the "Code"), U.S. Treasury Regulations promulgated thereunder (the "Regulations"), pertinent judicial authorities, rulings of the Internal Revenue Service and such other authorities as we have considered relevant. It should be noted that such laws, Code, Regulations, judicial decisions and administrative interpretations are subject to repeal, revocation, reversal, modification or change at any time and, in some circumstances, with retroactive effect. A material change in any of the authorities which we have considered could affect the conclusions upon which our opinion is based. WorldCom, Inc. May 11, 2000 Page 2 Based solely upon the foregoing and in reliance thereon and subject to the exceptions, limitations and qualifications stated herein, we confirm that the statements contained in the Prospectus under the caption "Certain United States Federal Income Tax Documentation Requirement for Non-U.S. Holders" insofar as such statements constitute matters of law or legal conclusions, as qualified therein, are our opinion and such statements are true, correct and complete in all material respects. Except as expressly set forth above, we express no other opinion. We consent to the filing of this opinion as Exhibit 8.1 of the Registration Statement. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933 or the rules and regulations of the Securities and Exchange Commission. Very truly yours, /s/ Bryan Cave LLP ------------------ Bryan Cave LLP EX-23.1 3 CONSENT OF ARTHUR ANDERSEN LLP Exhibit 23.1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this Amendment No. 1 to Form S-3, to be filed on or around May 11, 2000, of our report dated March 24, 2000, included in WorldCom, Inc.'s Form 10-K, for the year ended December 31, 1999, and to all references to our Firm included in this Registration Statement. ARTHUR ANDERSEN LLP Jackson, Mississippi, May 11, 2000. EX-23.2 4 CONSENT OF KPMG LLP EXHIBIT 23.2 INDEPENDENT AUDITORS' CONSENT The Board of Directors and Shareholders WorldCom, Inc.: We consent to incorporation by reference in this Amendment No. 1 to the registration statement on Form S-3 of WorldCom, Inc. of our report dated February 18, 1998, relating to the consolidated statements of operations, changes in shareholders' equity, and cash flows for the year ended December 31, 1997 of Brooks Fiber Properties, Inc. and subsidiaries, which report appears in WorldCom, Inc.'s Form 10-K for the year ended December 31, 1999 and to the reference to our firm in this registration statement under the heading "Experts." KPMG LLP St. Louis, Missouri May 11, 2000 EX-23.3 5 CONSENT OF ERNST & YOUNG EXHIBIT 23.3 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in Pre- effective Amendment No. 1 to the Registration Statement (Form S-3) and related Prospectus of WorldCom, Inc. for the registration of $15,000,000,000 of debt securities and to the incorporation by reference therein of our reports dated February 1, 2000, with respect to the consolidated financial statements and schedule of Sprint Corporation and the combined financial statements and schedules of the Sprint FON Group and the Sprint PCS Group included in WorldCom, Inc.'s Current Report (Form 8-K-2) dated April 11, 2000, filed with the Securities and Exchange Commission. Ernst & Young LLP Kansas City, Missouri May 11, 2000 EX-23.4 6 CONSENT OF DELOITTE & TOUCHE LLP Exhibit 23.4 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in Amendment No. 1 to Registration Statement No. 333-34578 on Form S-3 of WorldCom, Inc. of our report dated February 2, 1999, on the consolidated financial statements of Sprint Spectrum Holding Company, L.P. and subsidiaries, appearing in the WorldCom's Current Report on Form 8-K dated April 11, 2000 (filed April 11, 2000), and to the reference to us under the heading "Experts" in the Prospectus, which is part of this Registration Statement. Deloitte & Touche LLP Kansas City, Missouri May 10, 2000 EX-25.1 7 STATEMENT OF ELIGIBILITY EXHIBIT 25.1 -------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 -------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________ ----------------------------------------- CHASE MANHATTAN TRUST COMPANY, NATIONAL ASSOCIATION (Exact name of trustee as specified in its charter) 29-2933369 (State of incorporation (I.R.S. employer if not a national bank) identification No.) One Oxford Centre, Suite 1100 301 Grant Street, Pittsburgh, PA 15219 (Address of principal executive offices) (Zip Code) William H. McDavid The Chase Manhattan Bank General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) -------------------------------------------- WorldCom, Inc. (Exact name of obligor 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 of principal executive offices) (Zip Code) -------------------------------------------- Debt Securities (Title of the indenture securities) -------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. Comptroller of the Currency, Washington, D.C. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. None. No responses are included for Items 3-15 of this Form T-1 because the Obligor is not in default as provided under Item 13. Item 16. List of Exhibits ---------------- List below all exhibits filed as a part of this Statement of Eligibility. 1. Exhibit T1A(a) A copy of the Articles of Association of the Trustee as now in effect. 2. Exhibit T1A(b) A copy of the Certificate of Authority of the Trustee (previously known as New Trust Company, National Association,) to commence business. Also included in Exhibit TIA (b) are letters dated November 24, 1997 from the Comptroller of the Currency authorizing the exercise of fiduciary powers by the Trustee and acknowledging the name change of the Trustee. 3. Exhibit T1A(c) The Authorization of the Trustee to exercise corporate trust powers is contained in Exhibit T1A(b). 4. Exhibit T1B A copy of the By-Laws of the Trustee as now in effect. 5. Exhibit T1C Not applicable 6. Exhibit T1D The Trustee's consent required by Section 321(b) of the Act. 7. Exhibit T1E A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Exhibit T1F Not applicable 9. Exhibit T1G Not applicable 2 SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, Chase Manhattan Trust Company, National Association, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of Pittsburgh and Pennsylvania, on the 11th day of May, 2000. CHASE MANHATTAN TRUST COMPANY, NATIONAL ASSOCIATION By /s/ Elaine D. Renn ---------------------------- Elaine D. Renn Vice President 3 EXHIBIT T1A(a) [CHASE LOGO] CHASE MANHATTAN TRUST COMPANY, NATIONAL ASSOCIATION CHARTER NO. 23548 ARTICLES OF ASSOCIATION For the purpose of organizing an Association to perform any lawful activities of a national bank, the undersigned do enter into the following Articles of Association: FIRST. The title of this Association shall be Chase Manhattan Trust Company, National Association (the "Association"). SECOND. The main office of the Association shall be in the City of Pittsburgh, County of Allegheny, Commonwealth of Pennsylvania. The business of the Association shall be limited to the fiduciary powers and the support of activities incidental to the exercise of those powers. The Association will obtain the prior written approval of the Office of the Comptroller of the Currency before amending these Articles of Association to expand the scope of its activities and services. THIRD. The board of directors of this Association shall consist of not less than five nor more than twenty-five persons, the exact number to be fixed and determined from time to time by resolution of a majority of the full board of directors or by resolution of a majority of the shareholders at any annual or special meeting thereof. Each director, during the full term of his directorship, shall own common or preferred stock of the Association or of a holding company owning the Association, with an aggregate par, fair market or equity value of not less than $1,000. Any vacancy in the board of directors may be filled by action of the shareholders or a majority of the remaining directors. Terms of directors, including directors selected to fill vacancies, shall expire at the next regular meeting of shareholders at which directors are elected, unless the directors resign or are removed from office. Despite the expiration of a director's term, the director shall continue to serve until his or her successor is elected and qualifies or until there is a decrease in the number of directors and his or her position is eliminated. FOURTH. There shall be an annual meeting of the shareholders to elect directors and transact whatever other business may be brought before the meeting. It shall be held at the main office or any other convenient place the board of directors may designate, on the day of each year specified therefore in the by- laws, or if that day falls on a legal holiday in the state in which the Association is located, on the next following banking day. If no election is held on the day fixed or in event of a legal holiday, on the following banking day, an election may be held on any subsequent day within 60 days of the day fixed, to be designated by the board of directors, or, if the directors fail to fix the day, by shareholders representing two-thirds of the shares issued and outstanding. Advance notice of the meeting may be duly waived by the sole shareholder in accordance with 12 C.F.R. 7.2001. A director may resign at any time by delivering written notice to the board of directors, its Chairperson, or to the Association, which resignation shall be effective when the notice is delivered unless the notice specifies a later effective date. A director may be removed by shareholders at a meeting called to remove him or her, when notice of the meeting stating that the purpose or one of the purposes is to remove him or her is provided, if there is a failure to fulfill one of the affirmative requirements for qualification, or for cause. FIFTH. The authorized amount of capital stock of this Association shall be five million dollars ($5,000,000), divided into fifty thousand (50,000) shares of common stock of the par value of one hundred dollars ($ 100) each; but said capital stock may be increased or decreased from time to time, according to the provisions of the laws of the United States. 4 No holder of shares of the capital stock of any class of the Association shall have any preemptive or preferential right of subscription to any shares of any class of stock of the Association, whether now or hereafter authorized, or to any obligations convertible into stock of the Association, issued, or sold, nor any right to subscription to any thereof other than such, if any, as the board of directors, in its discretion may from time to time determine and at such price as the board of directors may from time to time fix. Unless otherwise specified in the Articles of Association or required by law, (1) all matters requiring shareholder action, including amendments to the Articles of Association, must be approved by shareholders owning a majority voting interest in the outstanding voting stock, and (2) each shareholder shall be entitled to one vote per share. The Association, at any time and from time to time, may authorize and issue debt obligations, whether or not subordinated, without the approval of the shareholders. SIXTH. The board of directors may appoint one of its members President of this Association, and one of its members Chairperson of the board or two of its members as Co-Chairpersons of the board, and shall have the power to appoint one or more Vice Presidents, a Secretary who shall keep minutes of the directors' and shareholders' meetings and be responsible for authenticating the records of the Association, and such other officers and employees as may be required to transact the business of this Association. A duly appointed officer may appoint one or more officers or assistant officers if authorized by the board of directors in accordance with the by-laws. The board of directors shall have the power to: (1) Define the duties of the officers, employees, and agents of the Association. (2) Delegate the performance of its duties, but not the responsibility for its duties, to the officers, employees, and agents of the Association. (3) Fix the compensation and enter into employment contracts with its officers and employees upon reasonable terms and conditions consistent with applicable law. (4) Dismiss officers and employees. (5) Require bonds from officers and employees and fix the penalty thereof. (6) Ratify written policies authorized by the Association's management or committees of the board. (7) Regulate the manner in which any increase or decrease of the capital of the Association shall be made, provided that nothing herein shall restrict the power of shareholders to increase or decrease the capital of the Association in accordance with law. (8) Manage and administer the business and affairs of the Association. (9) Adopt initial by-laws, not inconsistent with law or the Articles of Association, for managing the business and regulating the affairs of the Association. (10) Amend or repeal by-laws, except to the extent that the Articles of Association reserve this power in whole or in part to shareholders. (11) Make contracts. (12) Generally perform all acts that are legal for a board of directors to perform. SEVENTH. The board of directors shall have the power to change the location of the main office to any other location permitted under applicable law, without the approval of the shareholders, and shall have the power to establish or change the location of any branch or branches of the Association to any other location permitted under applicable law, without the approval of the shareholders subject to approval by the Office of the Comptroller of the Currency. EIGHTH. The corporate existence of this Association shall continue until termination according to the laws of the United States. NINTH. These Articles of Association may be amended at any regular or special meeting of the shareholders by the affirmative vote of the holders of a majority of the stock of this Association, unless the vote of the holders of a greater amount of stock is required by law, and in that case by the vote of the holders of such greater amount. The Association's board of directors may propose one or more amendments to the Articles of Association for submission to the shareholders. 5 EXHIBIT T1A (b) [LETTERHEAD OF THE COMPTROLLER OF THE CURRENCY APPEARS HERE] Whereas, satisfactory evidence has been presented to the Comptroller of the Currency that New Trust Company National Association located in Pittsburgh State of Pennsylvania has complied with all provisions of the statues of the United States required to be complied with before being authorized to commence the business of banking as a National Banking Association; Now, therefore, I hereby certify that the above named association is authorized to commence the business of banking as a National Banking Association. In Testimony whereof, witness my [CHARTER SEAL signature and seal of APPEARS HERE] Charter No. office this 24th days of 23548 November 1997 [SIGNATURE APPEARS HERE] 6 - -------------------------------------------------------------------------------- Comptroller of the Currency Exhibit T1A (b) Administrator of National Banks - -------------------------------------------------------------------------------- November District 11 14 Avenue of the America's Suite 3900 New York, New York 10036 November 24, 1997 Joseph R. Bielawa Vice President and Assistant General Counsel The Chase Manhattan Bank 270 Park Avenue, 39th Floor New York, New York 10017 Re: Change in Corporate Title New Trust Company, National Association (Bank) Pittsburgh, Pennsylvania Dear Mr. Bielawa: The Office of the Comptroller of the Currency (OCC) has received your submission, concerning the change and amendment to Article First of the above- referenced Bank's Articles of Association. The OCC has amended its records to reflect that effective November 24, 1997, the corporate title of New Trust Company, National Association, Charter Number 23548, was changed to "Chase Manhattan Trust Company, National Association." You are reminded that the OCC does not approve national bank name changes nor dies it maintain official titles or the retention of alternate titles. The use of other titles or the retention of the rights o any previously title is the responsibility of the Bank's board of directors. Legal counsel should be consulted to determine whether or not the new title, or any previously used title, could be challenged by competing institutions under the provisions of federal state law. A copy of the amended Article as accepted for filing is enclosed for the Bank's records. Very truly yours /s/ Linda Leickel Linda Leickel Senior Licensing Analyst Charter No.:23548 Control No.: 97 NE 04 010 w/97 NE 01 022 7 - -------------------------------------------------------------------------------- Comptroller of the Currency Exhibit T1A (b) Administrator of National Banks - -------------------------------------------------------------------------------- November District Licensing 1114 Avenue of the America's Suite 3900 Telephone (212) 790-4055 New York, New York 10036 Fax: (212) 790-4098 November 24, 1997 Mr. Daryl J. Zupan President and CEO New Trust Company, National Association c/o Mellon Bank, N.A., Corporate Trust Two Mellon Bank Center, Suite 325 Pittsburgh, Pennsylvania 15259 Re: Charter for a National Trust Bank, New Trust Company, National Association. Pittsburgh, Pennsylvania ACN 97 NE 01 0022 Dear Mr. Zupan: The Comptroller of the Currency (OCC) has found that you have met all conditions imposed by the OCC and completed all steps necessary to commence the business of banking. Your charter certificate is enclosed. You are authorized to commence business on November 24, 1997. This letter also constitutes OCC authorization to exercise fiduciary powers. You are reminded that several of the standard conditions contained in the preliminary approval letter dated October 23, 1997 will continue to apply once the bank opens and by opening, you agree to subject your association to these conditions of operations. Some of the conditions bear reiteration here: 1. Regardless of the association's FDIC insurance status, the association is subject to the Change in Bank Control act (12 U.S.C. 1817(j)) by virtue of its national bank charter. Please refer to item 4 in the list of standard conditions sent with the preliminary approval letter. 2. The board of directors is responsible for regular review and update of policies and procedures and for assuring ongoing compliance with them. This includes maintaining an internal control system that ensures compliance with the currency reporting and record keeping requirements of the Bank Secrecy Act (BSA). The board is expected to train its personnel in BSA procedures and designate one person or a group to monitor day-to-day compliance. 8 Mr. Daryl J. Zupan Page two 3. The bank will not engage in full commercial powers authorized to national banks without the OCC's prior approval Following the commencement of operations, bank management is urged to become familiar with the requirements of the Securities Exchange Act of 1934 and Part 11 of the Comptroller's regulations relative to the registration of the bank's equity securities and related periodic reports. These requirements will be applicable to your bank when the number of shareholders of record is maintained at 500 or more. Such registration may be subsequently terminated pursuant to the Act, only when the number of shareholders of record is reduced to fewer than 300. Should you have any questions regarding the supervision of your bank, please contact the portfolio manager who will be responsible for OCC's ongoing supervisory effort at your institution. You will be notified of the name and number of the appropriate individual in the near future. Sincerely, /s/ Micheal G. Tiscia Micheal G. Tiscia Licensing Manager Enclosure cc: Official File Field File 9 EXHIBIT T1B [CHASE LOGO] CHASE MANHATTAN TRUST COMPANY, NATIONAL ASSOCIATION BY-LAWS Article I. Meetings of Shareholders Section 1.1. Annual Meeting. The regular annual meeting of the shareholders to elect directors and transact whatever other business may properly come before the meeting, shall be held at the main office of the Association, or such other place as the board may designate, and at such time in each year as may be designated by the board of directors. Unless otherwise provided by law, notice of the meeting may be waived by the Association's sole shareholder in accordance with 12 C.F.R. (S) 7.2001. If, for any cause, an election of directors is not made on that date, or in the event of a legal holiday, on the next following banking day, an election may be held on any subsequent day within 60 days of the date fixed, to be designated by the board, or, if the directors fail to fix the date, by shareholders representing two thirds of the shares issued and outstanding. Section 1.2. Special Meetings. Except as otherwise specifically provided by statute, special meetings of the shareholders may be called for any purpose at any time by a majority of the board of directors or by any one or more shareholders owning, in the aggregate, not less than twenty-five percent of the stock of the Association or by the Chairperson of the board of directors or the President. Unless otherwise provided by law, advance notice of a special meeting may be waived by the Association's Sole Shareholder in accordance with 12 C.F.R. (S) 7.2001. Section 1.3. Nominations of Directors. Nominations for election to the board of directors may be made by the board of directors or by any stockholder of any outstanding class of capital stock of the Association entitled to vote for the election of directors. Nominations, other than those made by or on behalf of the existing management of the Association, shall be made in writing and shall be delivered or mailed to the President of the Association and to the Comptroller of the Currency, Washington, D.C., not less than 14 days nor more than 50 days prior to any meeting of shareholders called for the election of directors, provided, however, that if less than 21 days' notice of the meeting is given to shareholders, such nomination shall be mailed or delivered to the President of the Association and to the Comptroller of the Currency not later than the close of business on the seventh (7th) day following the day on which the notice of meeting was mailed. Such notification shall contain the following information to the extent known to the notifying shareholder. (1) The name and address of each proposed nominee. (2) The principal occupation of each proposed nominee. (3) The total number of shares of capital stock of the Association that will be voted for each proposed nominee. (4) The name and residence address of the notifying shareholder. (5) The number of shares of capital stock of the Association owned by the notifying shareholder. Nominations not made in accordance herewith may, in his/her discretion, be disregarded by the Chairperson of the meeting, and upon his/her instructions, the vote tellers may disregard all votes cast for each such nominee. Section 1.4. Proxies. Shareholders may vote at any meeting of the shareholders by proxies duly authorized in writing, but no officer or employee of this Association shall act as proxy. Proxies shall be valid only for one meeting to be specified therein, and any adjournments of such meeting. Proxies shall be dated and filed with the records of the meeting. Proxies with rubber stamped facsimile signatures may be used and unexecuted proxies may be counted upon receipt of a confirming telegram from the shareholder. Proxies meeting above requirements submitted at any time during a meeting shall be accepted. Section 1.5 Quorum. A majority of the outstanding capital stock, represented in person or by proxy, shall constitute a quorum at any meeting of shareholders, unless otherwise provided by law, or by the shareholders or directors pursuant to Section 10.2, but less than a quorum may adjourn any meeting, from time to time, and the meeting may be held, as adjourned, without further notice. A majority of the votes cast shall decide every question or matter submitted to the shareholders at any meeting, unless otherwise provided by law or by the Articles of Association, or by the shareholders or directors pursuant to Section 10.2. Any action required or permitted to be taken by the shareholders may be taken without a meeting by unanimous written consent of the shareholders to a resolution authorizing the action. The resolution and the written consent shall be filed with the minutes of the proceedings of the shareholders. 10 Article II. Directors Section 2.1. Board of Directors. The board of directors ("board") shall have the power to manage and administer the business and affairs of the Association. Except as expressly limited by law, all corporate powers of the Association shall be vested in and may be exercised by the board. Section 2.2. Number. The board shall consist of not less than five nor more than twenty-five persons, the exact number within such minimum and maximum limits to be fixed and determined from time to time by resolution of a majority of the full board or by resolution of a majority of the shareholders at any meeting thereof; provided, however, that a majority of the full board may not --------- -------- increase the number of directors to a number which: (1) exceeds by more than two the number of directors last elected by shareholders where such number was 15 or less; and (2) exceeds by more than four the number of directors last elected by shareholders where such number was 16 or more, but in no event shall the number of directors exceed 25. Section 2.3. Organization Meeting. The Secretary shall notify the directors- elect of their election and of the time at which they are required to meet at the main office of the Association to organize the new board and elect and appoint officers of the Association for the succeeding year. Such meeting shall be held on the day of the election or as soon thereafter as practicable, and, in any event, within 30 days thereof. If, at the time fixed for such meeting, there shall not be a quorum, the directors present may adjourn the meeting, from time to time, until a quorum is obtained. Section 2.4. Regular Meetings. The time and location of regular meetings of the board shall be set by the board. Such meetings may be held without notice. Any business may be transacted at any regular meeting. The board may adopt any procedures for the notice and conduct of any meetings as are not prohibited by law. Section 2.5. Special Meetings. Special meetings of the board may be called at the request of the Chairperson or Co-Chairperson of the board, the President, or three or more directors. Each member of the board shall be given notice stating the time and place, by telegram, telephone, letter or in person, of each such special meeting at least one day prior to such meeting. Any business may be transacted at any special meeting. Section 2.6. Action by the Board. Except as otherwise provided by law, corporate action to be taken by the board shall mean such action at a meeting of the board. Any action required or permitted to be taken by the board or any committee of the board may be taken without a meeting if all members of the board or the committee consent in writing to a resolution authorizing the action. The resolution and the written consents thereto shall be filed with the minutes of the proceedings of the board or committee. Any one or more members of the board or any committee may participate in a meeting of the board or committee by means of a conference telephone or similar communications equipment allowing all persons participating in the meeting to hear each other at the same time. Participation by such means shall constitute presence in person at such meeting. Section 2.7. Waiver of Notice. Notice of a special meeting need not be given to any director who submits a signed waiver of notice, whether before or after the meeting, or who attends the meeting without protesting, prior thereto or at its commencement, the lack of notice to him or her. Section 2.8. Quorum and Manner of Acting. Except as otherwise required by law, the Articles of Association or these by-laws, a majority of the directors shall constitute a quorum for the transaction of any business at any meeting of the board and the act of a majority of the directors present and voting at a meeting at which a quorum is present shall be the act of the board. In the absence of a quorum, a majority of the directors present may adjourn any meeting, from time to time, until a quorum is present and no notice of any adjourned meeting need be given. At any such adjourned meeting at which a quorum is present, any business may be transacted which might have been transacted at the meeting as originally called. Section 2.9. Vacancies. In the event a majority of the full board increases the number of directors to a number which exceeds the number of directors last elected by shareholders, as permitted by Section 2.2, directors may be appointed to fill the resulting vacancies by vote of such majority of the full board. In the event of a vacancy in the board for any other cause, a director may be appointed to fill such vacancy by vote of a majority of the remaining directors then in office. Section 2.10. Removal of Directors. The vacancy created by the removal of a director pursuant to this Section may be filled by the board in accordance with Section 2.9 of these by-laws or by the shareholders. 11 Article III. Committees Section 3.1. Executive Committee. There may be an executive committee consisting of the Chairperson or Co-Chairperson of the board and not less than two other directors appointed by the board annually or more often. Subject to the limitations in Section 3.4(g) of these by-laws, the executive committee shall have the maximum authority permitted by law. Section 3.2. Audit Committee. There may be an audit committee composed of not less than two directors, exclusive of any active officers, appointed by the board annually or more often, whose duty it shall be to make an examination at least once during each calendar year and within fifteen months of the last examination into the affairs of the Association, or cause continuous suitable examinations to be made, by auditors responsible only to the board, and to report the results of any such examinations in writing to the board from time to time. Such examinations shall include audits of the fiduciary business of the Association as may be required by law or regulation. Section 3.3. Other Committees. The board may appoint, from time to time, other committees of one or more persons, for such purposes and with such powers as the board may determine. Section 3.4. General. (a) Each committee shall elect a Chairperson from among the members thereof and shall also designate a Secretary of the committee, who shall keep a record of its proceedings. (b) Vacancies occurring from time to time in the membership of any committee shall be filled by the board for the unexpired term of the member whose departure causes such vacancy. The board may designate one or more alternate members of any committee, who may replace any absent member or members at any meeting of such committee. (c) Each committee shall adopt its own rules of procedure and shall meet at such stated times as it may, by resolution, appoint. It shall also meet whenever called together by its Chairperson or the Chairperson of the board. (d) No notice of regular meetings of any committee need be given. Notice of every special meeting shall be given either by mailing such notice to each member of such committee at his or her address, as the same appears in the records of the Association, at least two days before the day of such meeting, or by notifying each member on or before the day of such meeting by telephone or by personal notice, or by leaving a written notice at his or her residence or place of business on or before the day of such meeting. Waiver of notice in writing of any meeting, whether prior or subsequent to such meeting, or attendance at such meeting, shall be equivalent to notice of such meeting. Unless otherwise indicated in the notice thereof, any and all business may be transacted at any special meeting. (e) All committees shall, with respect to all matters, be subject to the authority and direction of the board and shall report to it when required. (f) Unless otherwise required by law, the Articles of Association or these by-laws, a quorum at any meeting of any committee shall be one-third of the full membership and present shall be the act of the committee. (g) No committee shall have authority to take any action which is expressly required by law or regulation to be taken at a meeting of the board or by a specified proportion of directors. Article IV. Officers and Employees Section 4.1. Chairperson of the Board. The board shall appoint one of its members to be the Chairperson of the board, or two persons to serve as Co- Chairperson of the board to serve at its pleasure. Such person shall preside at all meetings of the board. The Chairperson or Co-Chairpersons of the board shall supervise the carrying out of the policies adopted or approved by the board; shall have general executive powers, as well as the specific powers conferred by these by-laws; and shall also have and may exercise such further powers and duties as from time to time may be conferred upon, or assigned by the board. Section 4.2. President. The board may appoint one of its members to be the President of the Association. In the absence of the Chairperson or Co- Chairpersons, the President shall preside at any meeting of the board. The President shall have general executive powers, and shall have and may exercise any and all other powers and duties pertaining by law, regulation, or practice to the office of President, or imposed by these by-laws. The President shall also have and may exercise such further powers and duties as from time to time may be conferred, or assigned by the board. Section 4.3. Vice President. The board may appoint one or more Vice Presidents. Each Vice President shall have such powers and duties as may be assigned by the board. Section 4.4. Secretary. The board shall appoint a Secretary, Cashier, or other designated officer who shall be Secretary of the board and of the Association, and shall keep accurate minutes of all meetings. The Secretary shall attend to the giving of all notices required by these by-laws; shall be custodian of the corporate seal, records, documents and papers of the Association; shall provide for the keeping of proper records of all transactions of the Association; shall have and may exercise any and all other powers and duties pertaining by law, regulation 12 or practice, to the office of Cashier, or imposed by these by-laws; and shall also perform such other duties as may be assigned from time to time, by the board. Section 4.5. Other Officers. The board may appoint one or more Assistant Vice Presidents, one or more Trust Officers, one or more Assistant Secretaries, one or more Assistant Cashiers, one or more Managers and Assistant Managers of branches and such other officers and attorneys in fact as from time to time may appear to the board to be required or desirable to transact the business of the Association. Such officers shall respectively exercise such powers and perform such duties as pertain to their several offices, or as may be conferred upon, or assigned to, them by the board, the Chairperson or Co-Chairpersons of the board, or the President. The board may authorize an officer to appoint one or more officers or assistant officers. Section 4.6. Resignation. An officer may resign at any time by delivering notice to the Association. A resignation is effective when the notice is given unless the notice specifies a later effective date. Article V. Fiduciary Activities Section 5.1. Trust Committee. There shall be a Trust Committee of this Association composed of four or more members, who shall be capable and experienced officers or directors of the Association. The Committee is charged with the responsibility for the investment, retention, or disposition of assets held in accounts with respect to which the Association has investment authority; for the review of the assets of accounts for which the Association has investment authority promptly after the acceptance of such an account and at least once during every calendar year thereafter to determine the advisability of retaining or disposing of such assets; for the determination of the manner in which proxies received for accounts for which the Association has responsibility for the voting of proxies shall be voted; for the determination of all substantial questions involving discretionary authority of the Association of a non-investment nature, including, but not limited to, distribution of principal and/or income in respect of any account; for providing advice as to the investment, retention, or disposition of assets in investment advisory accounts maintained by the Association; for the making of such reports as this board shall require; and for such other responsibilities as may be assigned by this board. The Trust Committee, in discharging its aforementioned responsibilities, may authorize officers of the Association to exercise such powers and under such conditions as the Committee may from time to time prescribe. Section 5.2. Trust Investments. Funds held in a fiduciary capacity shall be invested according to the instrument establishing the fiduciary relationship and local law. Where such instrument does not specify the character and class of investments to be made and does not vest in the Association a discretion in the matter, funds held pursuant to such instrument shall be invested in investments in which corporate fiduciaries may invest under applicable law. Section 5.3. Trust Audit Committee. The board shall appoint a committee of at least two directors, exclusive of any active officer of the association, which shall, at least once during each calendar year make suitable audits of the association's fiduciary activities or cause suitable audits to be made by auditors responsible only to the board, and at such time shall ascertain whether fiduciary powers have been administered according to law, Part 9 of the Regulations of the Comptroller of the Currency, and sound fiduciary principles. Section 5.4. Fiduciary Files. There shall be maintained by the association all fiduciary records necessary to assure that its fiduciary responsibilities have been properly undertaken and discharged. Article VI. Stock and Stock Certificates Section 6.1. Transfers. Shares of stock shall be transferable on the books of the Association, and a transfer book shall be kept in which all transfers of stock shall be recorded. Every person becoming a shareholder by such transfer shall, in proportion to his or her shares, succeed to all rights of the prior holder of such shares. The board may impose conditions upon the transfer of the stock reasonably calculated to simplify the work of the Association with respect to stock transfers, voting at shareholder meetings, and related matters and to protect it against fraudulent transfers. Section 6.2. Stock Certificates. Certificates of stock shall bear the signature of the Chairperson or Co-Chairpersons of the board or President (which may be engraved, printed or impressed), and shall be signed manually or by facsimile process by the Secretary, Assistant Secretary, Cashier, Assistant Cashier, or any other officer appointed by the board for that purpose, to be known as an authorized officer, and the seal of the Association shall be engraved thereon. Each certificate shall recite on its face that the stock represented thereby is transferable only upon the books of the Association properly endorsed. In case any such officer who has signed or whose facsimile signature has been placed upon such certificate shall have ceased to be such before such certificate is issued, it may be issued by the Association with the same effect as if such officer had not ceased to be such at the time of its issue. The corporate seal may be a facsimile, engraved or printed. 13 Article VII. Corporate Seal Section 7.1. Corporate Seal. The Chairperson, the President, the Cashier, the Secretary or any Assistant Cashier or Assistant Secretary, or other officer thereunto designated by the board, shall have authority to affix the corporate seal to any document requiring such seal, and to attest the same. Such seal shall be substantially in the following form: A circle, with the words "Chase Manhattan Trust Company, National Association" within such circle. Article VIII. Miscellaneous Provisions Section 8.1. Fiscal Year. The fiscal year of the Association shall be the calendar year. Section 8.2. Execution of Instruments. All agreements, indentures, mortgages, deeds, conveyances, transfers, certificates, declarations, receipts, discharges, releases, satisfactions, settlements, petitions, schedules, accounts, affidavits, bonds, undertakings, proxies and other instruments or documents may be signed, executed, acknowledged, verified, delivered or accepted on behalf of the Association by the Chairperson or Co-Chairpersons of the board, or the President, or any Vice Chairperson, or any Managing Director, or any Vice President, or any Assistant Vice President, or the Chief Financial Officer, or the Controller, or the Secretary, or the Cashier, or, if in connection with exercise of fiduciary powers of the Association, by any of those officers or by any Trust Officer. Any such instruments may also be executed, acknowledged, verified, delivered or accepted on behalf of the Association in such other manner and by such other officers as the board may from time to time direct. The provisions of this Section 8.2 are supplementary to any other provision of these by-laws. Section 8.3. Records. The Articles of Association, the by-laws and the proceedings of all meetings of the shareholders, the board, and standing committees of the board, shall be recorded in appropriate minute books provided for that purpose. The minutes of each meeting shall be signed by the Secretary, Cashier or other officer appointed to act as Secretary of the meeting. Section 8.4. Corporate Governance Procedures. To the extent not inconsistent with applicable Federal banking law, bank safety and soundness or these by-laws, the corporate governance procedures found in the Delaware General Corporation Law shall be followed by the Association. Article IX. Indemnification Section 9.1. Right to Indemnification. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she is or was a director or an officer of the Association or is or was serving at the request of the Association as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan (hereinafter an "indemnitee"), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Association to the fullest extent authorized by the Delaware General Corporation Law, as the same exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Association to provide broader indemnification rights than such law permitted the Association to provide prior to such amendment), against all expense, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith; provided, however, that, except as provided in Section 9.3 of these by-laws with respect to proceedings to enforce rights to indemnification, the Association shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the board. Section 9.2. Right to Advancement of Expenses. The right to indemnification conferred in Section 9.1 of these by-laws shall include the right to be paid by the Association the expenses (including attorney's fees) incurred in defending any such proceeding in advance of its final disposition (hereinafter an "advancement of expenses"); provided, however, that, if the Delaware General Corporation Law requires, an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Association of an undertaking (hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a "final adjudication") that such indemnitee is not entitled to be indemnified for such expenses under this Section 9.2 or otherwise. The rights to 14 indemnification and to the advancement of expenses conferred in Sections 9.1 and 9.2 of these by-laws shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the indemnities heirs, executors and administrators. Section 9.3. Right of Indemnitee to Bring Suit. If a claim under Section 9.1 or 9.2 of these by-laws is not paid in full by the Association within sixty (60) days after a written claim has been received by the Association except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty (20) days, the indemnitee may at any time thereafter bring suit against the Association to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Association to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (1) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (2) any suit brought by the Association to recover an advancement of expenses pursuant to the terms of an undertaking, the Association shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met any applicable standard for indemnification set forth in the Delaware General Corporation Law. Neither the failure of the Association (including the board, the Association's independent legal counsel, or its shareholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the Association (including the board, the Association's independent legal counsel, or its shareholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or brought by the Association to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article IX or otherwise shall be on the Association. Section 9.4. Non-Exclusivity of Rights. The rights to indemnification and to the advancement of expenses conferred in this Article IX shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, the Association's Articles of Association, by-laws, agreement, vote of shareholders or disinterested directors or otherwise. Section 9.5. Insurance. The Association may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Association or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Association would have the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law. Section 9.6. Indemnification of Employees and Agents of the Association. The Association may, to the extent authorized from time to time by the board, grant rights to indemnification and to the advancement of expenses to any employee or agent of the Association to the fullest extent of the provisions of this Article IX with respect to the indemnification and advancement of expenses of directors and officers of the Association. Article X. By-laws Section 10.1. Inspection. A copy of the by-laws, with all amendments, shall at all times be kept in a convenient place at the main office of the Association, and shall be open for inspection to all shareholders during banking hours. Section 10.2. Amendments. The by-laws may be amended, altered or repealed, at any regular meeting of the board by a vote of a majority of the total number of the directors except as provided below. The Association's shareholders may amend or repeal the by-laws even though the by-laws may be amended or repealed by its board. 15 EXHIBIT T1D Consent for Records of Governmental Agencies to be Made Available to the Commission -------------------------------------- The undersigned, Chase Manhattan Trust Company, National Association, Pittsburgh, Pennsylvania pursuant to Section 321(b) of The Trust Indenture Act of 1939, hereby authorizes the Board of Governors of the Federal Reserve System, the Federal Reserve Banks, the Treasury Department, the Comptroller of the Currency and the Federal Deposit Insurance Corporation, under such conditions as they may prescribe, to make available to the Commission such reports, records or other information as they may have available with respect to the undersigned as a prospective trustee under an indenture to be qualified under the aforesaid Trustee Indenture Act of 1939 and to make through their examiners or other employees for the use of the Commission, examinations of the undersigned prospective Trustee. The undersigned also, pursuant to Section 321(b) of said Trust Indenture Act of 1939, consents that reports of examination by the Federal, State, Territorial or District authorities may be furnished by such authorities to the Commission upon request therefor. Dated this 11th day of December, 1998. Chase Manhattan Trust Company, National Association By: /s/ Timothy J. Vara ------------------- Timothy J. Vara Vice President 16 EXHIBIT T1E Chase Manhattan Trust Company, National Association Statement of Condition December 31, 1999 ($000) -------- Assets Cash and Due From Banks $ 12,526 Securities Available for Sale 4,847 Premises and Fixed Assets 4,452 Intangible Assets 157,494 -------- Total Assets $179,329 ======== Liabilities Sundry Liabilities and Accrued Expenses $ 6,300 -------- Stockholder's Equity Common Stock $ 5,000 Surplus 156,892 Retained Earnings 11,137 -------- Total Stockholder's Equity $173,029 -------- Total Liabilities and Stockholder's Equity $179,329 ======== 17 -----END PRIVACY-ENHANCED MESSAGE-----