CWA Presses Shareholders to Block 'Poison Pill' Tactic at MCI WorldCom

The Communications Workers of America is urging WorldCom shareholders to support a proposal requiring shareholder approval of any plan to adopt or keep a so-called "poison pill" provision. Shareholders will consider the measure at the company's annual meeting on Thursday, June 1, at 500 Clinton Center Drive in Clinton, Miss. The meeting begins at 10 a.m.

At the meeting, Brenda Scott, president of CWA Local 3570, and Rev. James Evans, a member of the Mississippi House of Representatives and civil rights activist, will urge support for the CWA resolution.

A `poison pill' prevents any change in the control of a company without the approval of the board of directors, forcing any potential buyer to negotiate only with management and not allowing any offers to be made directly to the shareholders.



The proposal, Item 2 on the shareholder agenda, has been submitted by the CWA Pension Fund. The last time shareholders considered this proposal - two years ago - it won 49 percent of voted shares.

CWA has been contacting private and public investors to further explain why the proposal is in the best interests of shareholders. Several top institutional holders of WorldCom stock have announced they are supporting the CWA proposal, including Barclays Bank PLC and State Street Corp., the second and third largest holders of WorldCom stock.

"The proposal is based on the proposition that shareholders, who own MCI WorldCom, should have the right to decide what is a fair price for their holdings," CWA wrote to investors.

Shareholders, not the board of directors, should decide whether there are special circumstances that might offset the risk that a "poison pill" could entrench management or make it less responsive or accountable to shareholder interests, CWA continued.

The board of directors has offered no evidence that a potential buyer may seek MCI WorldCom stock at a price that doesn't reflect its true value. To the contrary, the poison pill provision could place the interests of incumbent management in conflict with the best interests of shareholders, CWA pointed out.

This measure is especially important in light of recent reports that the merger with Sprint may be blocked by anti-trust officials in both the United States and Europe. If the merger does fail, MCI WorldCom's assets may be very valuable to another telecommunications company, and "shareholders should be able to determine whether a bid for their share is fair, without having that right infringed on" by management perhaps pursuing its own best interests, CWA pointed out.

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