{"id":40478,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/separation-agreement-worldcom-inc-and-bernard-j-ebbers.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"separation-agreement-worldcom-inc-and-bernard-j-ebbers","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/separation-agreement-worldcom-inc-and-bernard-j-ebbers.html","title":{"rendered":"Separation Agreement &#8211; WorldCom Inc. and Bernard J. Ebbers"},"content":{"rendered":"<pre>                              SEPARATION AGREEMENT\n                               (BERNARD J. EBBERS)\n\n                  SEPARATION AGREEMENT, dated as of April 29, 2002, between\nWORLDCOM, INC., a Georgia corporation (the \"Company\"), and BERNARD J. EBBERS\n(the \"Executive\").\n\nSECTION 1. RESIGNATION. The Executive hereby resigns from all directorships,\noffices and positions with the Company and its subsidiaries, affiliates and\nemployee benefit plans and trusts, effective April 29, 2002 (the \"Termination\nDate\"). The Executive will be appointed to serve the Company's board of\ndirectors as non-executive CHAIRMAN EMERITUS at the pleasure of the board, and\nalso will serve as a consultant as described in Section 9.\n\nSECTION 2. PENSION BENEFITS. Commencing as soon as practicable following May 1,\n2002, and on each May 1 thereafter that occurs during the Executive's lifetime,\nthe Company shall pay the Executive $1,500,000, in cash. Should the Executive be\nsurvived by the individual who is the Executive's spouse on the Termination\nDate, the Company shall pay such spouse $750,000 in cash on each May 1 after the\nExecutive's death that occurs during such spouse's lifetime. These pension\nbenefits are subject to complete discontinuance pursuant to Section 14.\n\nSECTION 3. OTHER BENEFITS.\n\n                  (a) The Company shall provide the Executive, at its expense\n         (and subject to offset for Medicare coverage), with continued medical\n         and life insurance benefits for the remainder of his lifetime at the\n         level applicable generally to senior executives of the Company. The\n         Executive also shall receive (without duplication) such amounts, if\n         any, to which the Executive may be entitled as of the Termination Date\n         pursuant to the terms of the employee benefit programs and compensation\n         programs of the Company (other than severance programs).\n\n                  (b) The Executive will have use of the Company aircraft for a\n         maximum of 30 hours per calendar year, subject to reimbursement of the\n         Company by the Executive on the same basis as is currently in effect\n         with the Company for personal usage, in order to avoid imputed income.\n\n                  (c) Subject to Section 6(b), the Executive may retain, at no\n         additional cost to him, his current Company-issued desktop computer.\n\n                  (d) The Executive may lease office space from the Company at\n         its 515 Amite Street location on terms and conditions mutually\n         agreeable to the parties.\n\nSECTION 4. STOCK OPTIONS. Each outstanding option granted to the Executive to\npurchase WorldCom group common stock or MCI group common stock (collectively,\n\"Company Stock\") shall become fully vested and exercisable on the Termination\nDate, and each such option shall\n\n\n\n                                                                               2\n\n\nremain exercisable until the fifth anniversary of the Termination Date (or, if\nearlier, the expiration of such option's original term), except to the extent\nthe applicable option agreement cannot be amended to permit such extension of\nthe option's exercise period.\n\nSECTION 5. LOANS. Simultaneously herewith, the Executive shall execute the\nletter agreement dated of even date herewith between the Executive and the\nCompany (the \"Letter Agreement\") and the related promissory note (the\n\"Promissory Note\"). The Executive further acknowledges and agrees that his\nobligations under the letter agreement dated April 2, 2002 (the \"April 2 Letter\nAgreement\"), as modified by the Letter Agreement, shall continue to apply in\nfull force and effect. The payments due from the Executive under the Promissory\nNote are subject to acceleration as described in Section 14.\n\nSECTION 6. RESTRICTIVE COVENANTS.\n\n         (a) NON-COMPETITION. Executive acknowledges and recognizes the highly\ncompetitive nature of the businesses of the Company and its affiliates and\naccordingly agrees as follows:\n\n         (i) For a period of five years following the Termination Date (the\n\"Restricted Period\"), the Executive will not, whether on the Executive's own\nbehalf or on behalf of or in conjunction with any person, firm, partnership,\njoint venture, association, corporation or other business organization, entity\nor enterprise whatsoever (\"Person\"), directly or indirectly:\n\n                  (A) engage in any business which is in competition with the\n                  business of the Company or an affiliate, which shall include\n                  any business which is principally involved in the purchase,\n                  sale or other dealing in any property or the rendering of any\n                  service purchased, sold, dealt in or rendered by the Company\n                  or an affiliate as a material part of the business of the\n                  Company or an affiliate within the same geographic area in\n                  which the Company or an affiliate makes such purchases, sales\n                  or dealings or renders such services (a \"Competitive\n                  Business\");\n\n                  (B) enter the employ of, or render any services to, any Person\n                  (or any division or controlled or controlling affiliate of any\n                  Person) in respect of any Competitive Business;\n\n                  (C) acquire a financial interest in, or otherwise become\n                  actively involved with, any Competitive Business, directly or\n                  indirectly, as an individual, partner, shareholder, officer,\n                  director, principal, agent, trustee or consultant; or\n\n                  (D) interfere with, or attempt to interfere with, business\n                  relationships (whether formed before, on or after the\n                  Termination Date) between the Company or any of its affiliates\n                  and customers, clients, suppliers or investors of the Company\n                  or its affiliates.\n\n         (ii) Notwithstanding anything to the contrary in this Agreement,\nExecutive may directly or indirectly own, solely as an investment, securities of\nany Person which are publicly traded on a national or regional stock exchange or\non the over-the-counter market if Executive (A) is not a controlling person of,\nor a member of a group which controls, such person and (B) does not, directly or\nindirectly, own 5% or more of any class of securities of such Person.\n\n\n\n                                                                               3\n\n\n         (iii) During the Restricted Period, Executive will not, whether on\nExecutive's own behalf or on behalf of or in conjunction with any Person,\ndirectly or indirectly:\n\n                  (A) solicit or encourage any employee of the Company or its\n                  affiliates to leave the employment of the Company or its\n                  affiliates; or\n\n                  (B) hire any such employee who was employed by the Company or\n                  its affiliates as of the Termination Date, or, if later,\n                  within the six-month period prior to such date of hire;\n                  provided however, notwithstanding any other provision hereof,\n                  Executive may hire his current secretary, Debra Blackwell.\n\n         (iv) During the Restricted Period, Executive will not, directly or\nindirectly, solicit or encourage to cease to work with the Company or its\naffiliates any consultant then under contract with the Company or its\naffiliates.\n\n         (v) It is expressly understood and agreed that although the Executive\nand the Company consider the restrictions contained in this Section 6 to be\nreasonable, if a final determination is made by a court of competent\njurisdiction or an arbitrator that the time or territory or any other\nrestriction contained in this Agreement is an unenforceable restriction against\nthe Executive, the provisions of this Agreement shall not be rendered void but\nshall be deemed amended to apply as to such maximum time and territory and to\nsuch maximum extent as such court or arbitrator may determine or indicate to be\nenforceable. Alternatively, if any such court of competent jurisdiction or\narbitrator finds that any restriction contained in this Agreement is\nunenforceable, and such restriction cannot be amended so as to make it\nenforceable, such finding shall not affect the enforceability of any of the\nother restrictions contained herein.\n\n         (b) CONFIDENTIALITY.\n\n         (i) The Executive will not at any time use, divulge or convey any\nsecret or confidential information, knowledge, or data of the Company or its\naffiliates, including information, knowledge or data of third parties as to\nwhich the Company or its affiliates is under an obligation of confidentiality\n(as, for example, information supplied to allow the Company to evaluate a\npotential acquisition), obtained by the Executive in the course of the\nExecutive's activities as a director, officer or employee of the Company except\nwhere required to do so by a court of law, by a governmental agency having\nsupervisory authority over the business of the Company or by any administrative\nor legislative body with apparent jurisdiction over the Executive to order the\nExecutive to divulge, disclose or make accessible such information. Such\ninformation, knowledge or data includes, but is not limited to, secret or\nconfidential matters (A) of a technical nature such as, but not limited to,\nmethods, know-how, formulae, compositions, process, discoveries, machines,\ninventions, computer programs and similar items or research projects, (B) of a\nbusiness nature such as, but not limited to, information about cost, purchasing,\nprofits, market, sales or lists of customers, and (C) pertaining to future\ndevelopments such as, but not limited to, research and development of future\nmarketing or merchandising (\"Confidential Information\"). Such Confidential\nInformation does not include information, knowledge or data that becomes\npublicly known other than through a breach of this Agreement by the Executive.\n\n         (ii) On and after the Termination Date the Executive shall (A) not use\nof any\n\n\n\n                                                                               4\n\n\nConfidential Information or intellectual property owned or used by the Company,\nits subsidiaries or affiliates, (B) immediately destroy, delete, or return to\nthe Company, at the Company's option, all originals and copies in any form or\nmedium in the Executive's possession or control (including any of the foregoing\nstored or located in the Executive's office, home, laptop or other computer,\nwhether or not Company property) to the extent that they contain Confidential\nInformation.\n\n         (c) NON-DISPARAGEMENT. The Company and its affiliates shall refrain\nfrom making any statements or comments of a defamatory or disparaging nature to\nany third party regarding the Executive, and the Executive shall refrain from\nmaking any statements or comments of a defamatory or disparaging nature to any\nthird party regarding the Company, any of its affiliates, or any of their\ndirectors, officers, personnel, policies or product; provided, however, that it\nshall not be a violation of this Section 6(c) for either party to make truthful\nstatements when required to do so by a court of law, by any governmental agency\nhaving supervisory authority over the party, or by any administrative or\nlegislative body with apparent jurisdiction to order the party to divulge,\ndisclose or make accessible such information.\n\nSECTION 7. SPECIFIC PERFORMANCE. The Executive acknowledges and agrees that the\nCompany's remedies at law for a breach or threatened breach of any of the\nprovisions of Section 6 would be inadequate and the Company would suffer\nirreparable damages as a result of such breach or threatened breach. In\nrecognition of this fact, the Executive agrees that, in the event of such a\nbreach or threatened breach, in addition to any remedies at law, the Company,\nwithout posting any bond, shall be entitled to cease making any payments or\nproviding any entitlement or benefit otherwise required by this Agreement\n(including without limitation the payments, entitlements and benefits otherwise\nprovided pursuant to Sections 2, 3, 4 and 5), and, notwithstanding Section 22,\nshall be entitled to bring an action in any court of competent jurisdiction for\nthe purpose of obtaining equitable relief in the form of specific performance,\ntemporary restraining order, temporary or permanent injunction or any other\nequitable remedy which may then be available.\n\nSECTION 8. COOPERATION. The Executive shall provide reasonable cooperation in\nconnection with any action or proceeding which relates to the Company or any of\nits affiliates, including without limitation in connection with any litigation\nand disputes arising out of actions or inactions of the Company or any affiliate\nof which the Executive has knowledge or information. The Executive further\nagrees to cooperate with the Company in supplying data, information, and\nexpertise within the Executive's special knowledge or competence and otherwise\nassist the Company in the protection of the interests of the Company and its\naffiliates. The Company shall reimburse the Executive for reasonable\nout-of-pocket expenses (such as hotel and travel expenses) incurred by the\nExecutive in connection with such cooperation following its receipt of the\nExecutive's appropriately itemized request.\n\nSECTION 9. CONSULTATION. For a period of five years following the Termination\nDate, the Executive shall remain available to provide consulting services to the\nCompany and its affiliates, in particular the Chief Executive Officer of the\nCompany, on business matters from time to time at the Company's reasonable\nrequest. The Executive acknowledges that all such consulting services will be\nperformed by the Executive as an independent contractor, and not as an employee,\nand that the Executive will not be eligible or entitled to participate, as a\nresult of the performance of such consulting services, in any Company benefit or\nincentive program.\n\nSECTION 10. INDEMNITY. The existing rights of the Executive and obligations of\nthe Company\n\n\n\n                                                                               5\n\n\nwith regard to indemnification of the Executive that are not dependent upon\nExecutive's continued employment or holding an office or directorship with the\nCompany or an affiliate, and the indemnification rights under the Company's\ncurrent by-laws, shall continue.\n\nSECTION 11. RELEASE. The Executive acknowledges that certain payments provided\nfor hereunder are in excess of the amounts that the Executive would otherwise be\nentitled to receive and that the Company had no obligation to enter into this\nAgreement. In consideration of the Company assuming these additional obligations\nand entering into this Agreement, and as a material inducement to the Executive\nto enter into this Agreement, the parties agree to execute (and not revoke) a\nrelease (\"Release\") substantially in the form attached hereto as EXHIBIT A. This\nAgreement is subject in all respects to Executive's execution (and\nnon-revocation) of the Release.\n\nSECTION 12. SEVERABILITY. In the event that any one or more of the provisions of\nthis Agreement shall be or become invalid, illegal or unenforceable in any\nrespect, the validity, legality and enforceability of the remaining provisions\nof this Agreement shall not be affected thereby.\n\nSECTION 13. ASSIGNMENT. This Agreement, and all of Executive's rights and duties\nhereunder, shall not be assignable or delegable by Executive. Any purported\nassignment or delegation by Executive in violation of the foregoing shall be\nnull and void AB INITIO and of no force and effect. This Agreement may be\nassigned by the Company to a person or entity which is a successor in interest\nto substantially all of the business operations of the Company. Upon such\nassignment, the rights and obligations of the Company hereunder shall become the\nrights and obligations of such successor person or entity.\n\nSECTION 14. SET-OFF; BREACH. In the event of any breach of this Agreement by the\nExecutive, the Company's obligation to pay any amounts to the Executive, whether\nunder this Agreement or otherwise, and the Company's obligation to make the\narrangements provided under this Agreement, net of any withholding obligations,\nshall be subject to set-off by or against, counterclaim or recoupment of,\namounts owed by the Executive to the Company or its affiliates. Without limiting\nthe generality of the foregoing, in the event of any breach of this Agreement by\nthe Executive, any default by the Executive on any of the obligations contained\nin the Letter Agreement, the Promissory Note or the April 2 Letter Agreement, or\nthe filing of voluntary or involuntary bankruptcy by the Executive, payment of\nthe pension benefits described in Section 2 will be permanently discontinued and\nall outstanding amounts due to the Company by the Executive will be accelerated\nas provided in the Promissory Note.\n\nSECTION 15. NO MITIGATION. Executive shall not be required to mitigate the\namount of any payment provided for pursuant to this Agreement by seeking other\nemployment, and the Executive shall not be required to pay the Company any\namounts the Executive may receive from such alternative employment.\n\nSECTION 16. SUCCESSORS; BINDING AGREEMENT. This Agreement shall inure to the\nbenefit of and be binding upon personal or legal representatives, executors,\nadministrators, successors, heirs, distributees, devisees and legatees.\n\nSECTION 17. NOTICE. For purposes of this Agreement, notices and all other\ncommunications provided for in this Agreement shall be in writing and shall be\ndeemed to have been duly given when delivered by hand or overnight courier or\nthree days after it has been mailed by United\n\n\n                                                                               6\n\n\nStates registered mail, return receipt requested, postage prepaid, addressed to\nthe respective addresses set forth below in this Agreement, or to such other\naddress as either party may have furnished to the other in writing in accordance\nherewith, except that notice of change of address shall be effective only upon\nreceipt.\n\n                  Notice to the Company shall be addressed to:\n                           WorldCom, Inc.\n                           500 Clinton Center Drive\n                           Clinton, MS  39056\n                           Attn:  General Counsel\n\n                  With a copy to:\n                           Kenneth C. Edgar, Jr., Esq.\n                           Simpson Thacher &amp; Bartlett\n                           425 Lexington Avenue\n                           New York, NY 10017\n\n                  Notice to the Executive shall be addressed to:\n                           Mr. Bernard J. Ebbers\n                           2116 Highway 84 East\n                           Oakhill Farm\n                           Brookhaven, MS 39601\n\n                  With a copy to:\n                           Charles P. Adams, Jr., Esq.\n                           Adams and Reese, LLP\n                           P.O. Box 24297\n                           Jackson, MS 39225-4297\n\nSECTION 18. WITHHOLDING TAXES. The Company may withhold from any amounts payable\nunder this Agreement such Federal, state and local taxes as may be required to\nbe withheld pursuant to any applicable law or regulation.\n\nSECTION 19. ENTIRE AGREEMENT\/AMENDMENTS. This Agreement, the Release, the Letter\nAgreement and the Promissory Note contain the entire understanding of the\nparties with respect to the subject matter hereof; except that the obligations\ndescribed in the April 2 Letter Agreement, as modified by the Letter Agreement,\nshall continue to apply in all respects. There are no restrictions, agreements,\npromises, warranties, covenants or undertakings between the parties with respect\nto the subject matter herein other than those expressly set forth herein and\ntherein. This Agreement may not be amended except by written instrument signed\nby the parties hereto.\n\nSECTION 20. NO WAIVER. The failure of a party to insist upon strict adherence to\nany term of this Agreement on any occasion shall not be considered a waiver of\nsuch party's rights or deprive such party of the right thereafter to insist upon\nstrict adherence to that term or any other term of this Agreement.\n\n\n                                                                               7\n\n\n\n\n\nSECTION 21. ARBITRATION. Except as set forth in Section 7, any dispute,\ncontroversy or claim arising out of or relating to this Agreement shall be\nsettled exclusively by binding arbitration by a single arbitrator, conducted in\nthe State of Mississippi in accordance with the rules of the American\nArbitration Association then in effect. If the Executive and the Company are\nunable to mutually agree on the arbitrator, the arbitrator shall be chosen in\naccordance with the rules of the American Arbitration Association. Judgment may\nbe entered on the arbitrator's award in any court in the State of Mississippi\nhaving jurisdiction.\n\nSECTION 22. GOVERNING LAW; VENUE. This Agreement shall be governed by and\nconstrued in accordance with the laws of the State of Mississippi, without\nregard to conflicts of laws principles thereof. The Executive irrevocably\nsubmits to the non-exclusive jurisdiction of the courts of the State of\nMississippi and the courts of the United States located in the State of\nMississippi for the purpose of any action or proceeding arising out of or\nrelating to this Agreement, and acknowledges that the designated FORA have a\nreasonable relation to this Agreement and the parties' relationship to one\nanother.\n\nSECTION 23. COUNTERPARTS. This Agreement may be signed in counterparts, each of\nwhich shall be an original, with the same effect as if the signatures thereto\nand hereto were upon the same instrument.\n\n         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as\nof the day and year first written above.\n\n                                       WORLDCOM, INC.\n\n\n                                       \/s\/ John W. Sidgmore\n                                       --------------------------------------\n                                       By: John W. Sidgmore\n                                           President and\n                                           Chief Executive Officer\n\n\n                                       \/s\/ Bernard J. Ebbers\n                                       --------------------------------------\n                                       Bernard J. Ebbers\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[9361],"corporate_contracts_industries":[9519],"corporate_contracts_types":[9539,9551],"class_list":["post-40478","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-worldcom-inc","corporate_contracts_industries-telecommunications__telephone","corporate_contracts_types-compensation","corporate_contracts_types-compensation__severance"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/40478","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=40478"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=40478"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=40478"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=40478"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}