WorldCom, Inc. Declares Dividend Distribution Of Preferred Stock Purchase Rights
JACKSON, Miss. and OMAHA, Neb. (August 26, 1996) --
On August 25, 1996, the Board of Directors of WorldCom, Inc.
(Nasdaq/NM:WCOM) approved the adoption of a Shareholder Rights Plan
designed to discourage takeovers that involve abusive tactics or do
not provide fair value to shareholders. Similar plans have been
adopted by many other publicly traded companies. WorldCom, Inc. is
not aware of any effort to acquire control of the Company. This
Shareholder Rights Plan has no impact on, nor is it impacted by the
recently announced merger with MFS Communications Company, Inc.
Bernard J. Ebbers, President and CEO of WorldCom, Inc. stated,
"The Board of Directors determined that adopting the Shareholder
Rights Plan is an effective and reasonable method to safeguard the
interests of our shareholders. We are particularly concerned that the
future benefits of current programs and initiatives could be denied
to shareholders by an opportunistic, undervalued acquisition of the
Company. The plan is designed to assure that shareholders are not
deprived of their rights to share in the full measure of the
Company's long-term potential, while not preventing a fully
valued bid for the Company."
The Shareholder Rights Plan provides for a dividend distribution
of one Preferred Stock Purchase Right for each outstanding share of
WorldCom, Inc. common stock. The dividend distribution will be made
to shareholders of record on September 6, 1996. Each shareholder is
automatically entitled to the Rights and no physical distribution of
new certificates will be made at this time. The Rights distribution
of new certificates will be made at this time. The Rights
distribution is not taxable to shareholders.
The Rights will be exercisable only if a person or group (except
for certain exempted persons or groups) acquires 15% or more of
WorldCom, Inc.'s common stock or announces a tender offer which
would result in ownership of 15% or more of the common stock. Each
Right entitles the holder to purchase one one-thousandth of a share
of Series 3 Junior Participating Preferred Stock at an exercise price
of $160.00 and will expire on September 6, 2006.
Following the acquisition of 15% or more of WorldCom, Inc.'s
common stock by a person or group, the holders of the Rights (other
than the acquiring person) will be entitled to purchase shares of
common stock at one-half the then current market price, and, in the
event of a subsequent merger or other acquisition of the Company, to
buy shares of common stock of the acquiring entity at one-half of the
market price of those shares.
WorldCom, Inc. will be able to redeem the Rights at $0.01 per
Right at any time until a person or group acquires 15% or more of the
Company's shares.
A letter outlining the Shareholder Rights Plan in more detail will
be sent to the Company's stockholders following the record
date.
WorldCom, Inc. is one of the largest long distance
telecommunications companies in the United States, offering domestic
and international voice, data and video products and services to
business customers, other carriers and the residential market. The
company operates a nationwide digital fiber optic network in the
United States and has worldwide network capacity. The common shares
of WorldCom, Inc. trade on The Nasdaq Stock Market's National
Market under the symbol WCOM.
