EX-10.65 9 dex1065.htm EXHIBIT 10.65

EXHIBIT 10.65

 

MCI, INC.

 

2003 MANAGEMENT RESTRICTED STOCK PLAN


MCI, INC.

 

2003 MANAGEMENT RESTRICTED STOCK PLAN

 

1. Purpose. This MCI, Inc. 2003 Management Restricted Stock Plan (the “Plan”) is intended to attract, retain and motivate highly competent persons as officers and key employees of MCI, Inc., a Delaware corporation (the “Company”), and its subsidiaries and affiliates, by providing them with appropriate incentives and rewards hereunder (collectively “Awards”).

 

2. Administration.

 

(a) Committee. The Plan will be administered by the Board of Directors of the Company (“Board”) or, at the Board’s discretion, by a committee (the “Committee”) appointed by the Board from among its members. It is intended that such a Committee consist of not less than two (2) members each of whom is (i) a “Non-Employee Director” within the meaning of Rule 16b-3(b)(3) (or any successor rule) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and (ii) an “outside director” within the meaning of Treasury Regulation Section 1.162-27(e)(3) under Section 162(m) of the Internal Revenue Code of 1986, as amended (the Code). However, no action of the Committee shall be void or voidable solely because its members do not then qualify as Non-Employee Directors or outside directors. All references herein to “Committee” shall be deemed to include the Board.

 

(b) Authority. The Committee is authorized, subject to the provisions of the Plan, to establish such rules as it deems necessary for the proper administration and operation of the Plan and to make such determinations and interpretations and to take such action in connection with the Plan and any Awards granted hereunder as it deems necessary or advisable. All determinations and interpretations made by the Committee, in its sole and absolute discretion, shall be binding and conclusive on all participants and their successors, beneficiaries and legal representatives.

 

(c) Indemnification. No member of the Committee and no employee of the Company shall be liable for any act or failure to act hereunder, except in circumstances involving his or her bad faith or willful misconduct, or for any act or failure to act hereunder by any other member or employee or by any agent to whom duties in connection with the administration of this Plan have been delegated. The Company shall indemnify members of the Committee and any agent of the Committee who is an employee of the Company, a subsidiary or an affiliate against any and all liabilities or expenses (including attorney’s fees) to which they may be subjected by reason of any act or failure to act with respect to their duties on behalf of the Plan, except in circumstances involving such person’s bad faith or willful misconduct.

 

(d) Delegation and Advisers. To the fullest extent permitted under Section 157 of the Delaware General Corporation Law, the Committee may delegate to one or more of its members, or to one or more agents, such administrative duties as it may deem advisable, and the Committee, or any person to whom it has delegated duties as aforesaid, may employ one or more persons to render advice with respect to any responsibility the Committee or such person may have under the Plan. The Committee may employ such legal or other counsel, consultants and agents as it may deem desirable for the administration of the Plan and may rely upon any opinion or computation received from any such counsel, consultant or agent. Expenses incurred by the Committee in the engagement of such counsel, consultant or agent shall be paid by the Company, or the subsidiary or affiliate whose employees have participated in the Plan, as determined by the Committee.

 

3. Common Stock Available Under the Plan.

 

(a) Basic Limitations. The aggregate number of shares of common stock of the Company (the “Common Stock”) that may be subject to the Awards granted under this Plan shall be 10,921,000 shares of Common Stock, which may be authorized and unissued or treasury shares, subject to any adjustments made in accordance with Section 4 hereof.

 

(b) Additional Shares. Any shares of Common Stock subject to an Award which for any reason is cancelled, forfeited or otherwise terminated in a manner that any such shares are not issued to, are forfeited


by or re-acquired from a participant, including any shares delivered to the Company as part or full payment for any Award or to satisfy a tax obligation, shall again be available for Awards under the Plan. The preceding sentence shall apply only for purposes of determining the aggregate number of shares of Common Stock subject to Awards.

 

(c) Acquisitions. In connection with the acquisition of any business by the Company or any of its subsidiaries or affiliates, any outstanding grants, awards or sales of stock, options or other similar rights pertaining to such business may be assumed or replaced by Awards under the Plan upon such terms and conditions as the Committee determines. The date of any such grant or award shall relate back to the date of the initial grant or award being assumed or replaced, and service with the acquired business shall constitute service with the Company or its subsidiaries or affiliates for purposes of such grant or award. Any shares of Common Stock underlying any grant or award or sale pursuant to any such acquisition shall be disregarded for purposes of applying the limitations under and shall not reduce the number of shares of Common Stock available under Section 3(a) above.

 

4. Adjustment Provisions.

 

(a) Adjustment Generally. If there shall be any change in the Common Stock of the Company through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, reverse stock split, split up, spin-off, combination of shares, exchange of shares, dividend in kind or other like change in capital structure or distribution (other than normal cash dividends) to shareholders of the Company, an adjustment shall be made to the shares available under the Plan and to each outstanding stock unit such that each such Award shall thereafter be exercisable for such securities, cash and/or other property as would have been received in respect of the Common Stock subject to such stock unit had such Award been exercised in full immediately prior to such change or distribution, and such an adjustment shall be made successively each time any such change shall occur.

 

(b) Modification of Awards. In the event of any change or distribution described in subsection (a) above, in order to prevent dilution or enlargement of participants’ rights under the Plan, the Committee will have authority to adjust, in an equitable manner, the number and kind of shares that may be issued under the Plan, the number and kind of shares subject to outstanding Awards, the purchase price applicable to outstanding Awards, and the fair market value of the Common Stock and other value determinations applicable to outstanding Awards. Appropriate adjustments may also be made by the Committee in the terms of any Awards under the Plan to reflect such changes or distributions and to modify any other terms of outstanding Awards on an equitable basis, including modifications of performance targets and changes in the length of performance periods, if applicable. In addition, the Committee is authorized to make adjustments to the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events affecting the Company or the financial statements of the Company, or in response to changes in applicable laws, regulations, or accounting principles.

 

5. Participants. Participants will consist of such officers and key employees of the Company and its subsidiaries and affiliates as the Committee in its sole discretion determines to be responsible for the success and future growth and profitability of the Company and whom the Committee may designate from time to time to receive Awards under the Plan. Designation of a participant in any year shall not require the Committee to designate such person to receive a Award in any other year or, once designated, to receive the same type or amount of Award as granted to the participant in any other year. The Committee shall consider such factors as it deems pertinent in selecting participants and in determining the type and amount of their respective Awards.

 

6. Type of Awards.

 

(a) General. Awards under the Plan may be granted in any one or a combination of Stock Awards or Stock Units. Each such grant is described below. Awards granted under the Plan shall be evidenced by an agreement (which need not be identical) that may provide additional terms and conditions associated with such Awards, as determined by the Committee in its sole discretion, provided, however, that in the event of any conflict between the provisions of the Plan and any such agreement, the provisions of the Plan shall prevail.

 

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(b) Initial Awards. As of the Effective Date, Stock Awards or Stock Units shall be granted to certain officers and key employees in amounts and upon such terms and conditions as the Committee shall have approved prior to such date. Such an initial Award shall vest in equal quarterly installments over the three-year period beginning on the Effective Date, provided the participant remains employed by the Company or any subsidiary thereof. In addition, a pro rata portion of the unvested Shares subject to such an initial Award shall vest upon a participant’s death or disability (as determined for purposes of the applicable long term disability plan of the Company or its subsidiary), but not for any other termination of employment unless otherwise determined by the Committee in its sole discretion.

 

(c) Exchange of Awards. At the discretion of the Committee and in such manner determined by the Committee, a participant may exchange all or a portion of such participant’s unvested Stock Units for similarly unvested Stock Awards, or such participant’s unvested Stock Awards for similarly unvested Stock Units.

 

7. Stock Awards.

 

(a) Generally. The Committee may, in its discretion, grant Stock Awards (which may include mandatory payment of any bonus in stock) consisting of Common Stock issued or transferred to participants with or without other payments therefor.

 

(b) Additional Terms. Stock Awards may be subject to such terms and conditions, including vesting, as the Committee determines appropriate, including, without limitation, restrictions on the sale or other disposition of such shares, the right of the Company to reacquire such shares for no consideration upon termination of the participant’s employment within specified periods. The Committee may require the participant to deliver a duly signed stock power, endorsed in blank, relating to the Common Stock covered by such an Award. The Committee may also require that the stock certificates evidencing such shares be held in custody or bear restrictive legends until the restrictions thereon shall have lapsed.

 

(c) Rights as a Shareholder. The Stock Award shall specify whether the participant shall have, with respect to the shares of Common Stock subject to a Stock Award, all of the rights of a holder of shares of Common Stock of the Company, including the right to receive dividends and to vote the shares.

 

8. Stock Units.

 

(a) Generally. The Committee may, in its discretion, grant Stock Units (as defined in subsection (c) below) to participants hereunder. Stock Units may be subject to such terms and conditions, including vesting, as the Committee determines appropriate. A Stock Unit granted by the Committee shall provide payment in shares of Common Stock at such time as the award agreement shall specify. Shares of Common Stock issued pursuant to this Section 8 may be issued with or without other payments therefor as may be required by applicable law or such other consideration as may be determined by the Committee. The Committee shall determine whether a participant granted a Stock Unit shall be entitled to a Dividend Equivalent Right (as defined in subsection (c) below).

 

(b) Settlement of Stock Units. Shares of Common Stock shall be distributed to a participant in settlement of his or her Stock Units unless otherwise determined by the Committee.

 

(c) Definitions. A Stock Unit means a notional account representing one (1) share of Common Stock. A Dividend Equivalent Right means the right to receive the amount of any dividend paid on the share of Common Stock underlying a Stock Unit, which shall be payable in cash or in the form of additional Stock Units.

 

9. Foreign Laws. The Committee may grant Awards to individual participants who are subject to the laws of nations other than the United States, which Awards may have terms and conditions as determined by the Committee to be (a) necessary to comply with applicable foreign laws or business practices, (b) necessary to avoid unfavorable tax treatment of such Awards, or (c) otherwise appropriate. The most senior human resources officer of the Company (the HRO) may also make the same types of modifications to such an Award, other than an Award issued to an officer of the Company or its subsidiaries who is subject to Section 16 of the Exchange Act. The

 

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Committee or the HRO may take any action which it deems advisable to obtain approval of such Awards by the appropriate foreign governmental entity; provided, however, that no such Awards may be granted pursuant to this Section 9 and no action may be taken which would result in a violation of any applicable law.

 

10. Change in Control.

 

(a) Effect of a Change in Control. Notwithstanding any other provision of this Plan, if there is a Change in Control (as defined in subsection (b) below) of the Company and any participant hereunder is terminated without Cause (as defined in the agreement pertaining to the Award) within two years thereafter, all then outstanding Stock Units of such participant shall immediately vest and become settleable and any restrictions on Stock Awards of such participant shall immediately lapse. Thereafter, all Awards shall be subject to the terms of any agreement effecting the Change in Control.

 

(b) Definitions. For purposes of this Section 10, a “Change in Control” of the Company, with respect to any participant, shall be deemed to have occurred upon any of the following events (unless another definition is provided in any applicable individual change in control agreement between the Company and the participant, in which case such agreement shall govern):

 

(i) the sale, lease or transfer, in one or a series of related transactions, of all or substantially all of the assets of the Company and its Restricted Subsidiaries (as defined in the Indenture) taken as a whole to any other “person” or “group,” as that term is used in Section 13(d)(3) of the Exchange Act (other than the Company or any of its Restricted Subsidiaries), other than a creation of a holding company that does not involve a change in the beneficial ownership of the Company as a result of the transaction and other than a creation of a holding company that does not involve a change in the beneficial ownership of the Company as a result of the transaction;

 

(ii) the adoption of a plan relating to the liquidation or dissolution of the Company;

 

(iii) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in rules 13d-3 and 13d-5 under the Exchange Act (except that a person shall be deemed to have beneficial ownership of all shares that such Person has a right to acquire, whether such right is exercisable immediately or after 60 days), directly or indirectly of more than 50% of the voting power of the voting stock of the Company by way of purchase, merger or consolidation or otherwise;

 

(iv) the merger or consolidation with or into another Person or merger of another Person into the Company with the effect that immediately after that transaction the existing stockholders of the Company immediately before the transaction hold, directly or indirectly, less than 50% of the total voting power of all securities generally entitled to vote in the election of directors, managers or trustees of the Person surviving the merger or consolidation; or

 

(v) the first day on which a majority of the members of the Company’s Board of Directors are not Continuing Directors. For purposes of the preceding clause, “Continuing Directors” means, as of any date of determination, any member of the Company’s Board of Directors who: (1) was a member of the Company’s Board of Directors on the Effective Date; or (2) was nominated for election or elected to the Company’s Board of Directors with the affirmative vote of, or whose election or appointment was otherwise approved or ratified (whether before or after nomination or election) by, at least a majority of the Continuing Directors who were members of the Company’s Board of Directors at the time of the nomination, election or approval, as applicable.

 

11. Nontransferability. Each Award granted under the Plan to a participant (other than vested Stock Awards) shall not be transferable otherwise than by will or the laws of descent and distribution, and shall be exercisable, during the participant’s lifetime, only by the participant. Notwithstanding the foregoing, at the discretion of the Committee, an award of a Award may permit the transferability of such Award by a participant solely to the participant’s spouse, siblings, parents, children and grandchildren, trusts for the benefit of such persons, or partnerships, corporations, limited liability companies or other entities owned solely by such persons, subject to any restriction included in the award agreement pertaining to such Award.

 

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12. Other Provisions. The award of any Award under the Plan may also be subject to such other provisions (whether or not applicable to the Award awarded to any other participant) as the Committee determines appropriate, including, without limitation, the forfeiture of, or restrictions on resale or other disposition of, Common Stock acquired under any form of Award, for the acceleration of vesting of Awards in the event of a change in control of the Company, for the payment of the value of Awards to participants in the event of a change in control of the Company, or to comply with federal and state securities laws, or understandings or conditions as to the participant’s employment in addition to those specifically provided for under the Plan.

 

13. Withholding. All payments or distributions of Awards made pursuant to the Plan shall be net of any amounts required to be withheld pursuant to applicable federal, state and local tax withholding requirements. If the Company proposes or is required to distribute Common Stock pursuant to the Plan, it may require the recipient to remit to it or to the corporation that employs such recipient an amount sufficient to satisfy such tax withholding requirements prior to the delivery of any certificates for such Common Stock. In lieu thereof, the Company or the employing corporation shall have the right to withhold the amount of such taxes from any other sums due or to become due from such corporation to the recipient as the Committee shall prescribe. The Committee may, in its discretion and subject to such rules as it may adopt (including any as may be required to satisfy applicable tax and/or non-tax regulatory requirements), permit a participant to pay all or a portion of the federal, state, local and non-U.S. withholding taxes arising in connection with any Award consisting of shares of Common Stock by electing to have the Company withhold shares of Common Stock having a fair market value equal to the amount of tax to be withheld, such tax calculated at minimum statutory withholding rates.

 

14. No Employment Rights. A participant shall not have any right to continue to serve the Company or any of its subsidiaries or affiliates as an officer, employee or otherwise by reason of his or her participation in the Plan, and any such participant’s employment shall not be enlarged or otherwise affected by his or her designation as a participant or by transactions under the Plan.

 

15. Unfunded Plan. Participants shall have no right, title, or interest whatsoever in or to any investments which the Company may make to aid it in meeting its obligations under the Plan. Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any participant, beneficiary, legal representative or any other person. To the extent that any person acquires a right to receive payments from the Company under the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company. All payments to be made hereunder shall be paid from the general funds of the Company and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts except as expressly set forth in the Plan. The Plan is not intended to be subject to the Employee Retirement Income Security Act of 1974, as amended.

 

16. No Fractional Shares. No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan or any Award. The Committee shall determine whether cash, or Awards, or other property shall be issued or paid in lieu of fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated.

 

17. Duration, Amendment and Termination. No Award shall be granted more than ten (10) years after the Effective Date. The Committee may amend the Plan from time to time or suspend or terminate the Plan at any time, subject to the shareholder approval if and to the extent required under the rules of any stock exchange or automated quotation system on which the Company’s common stock is then listed or quoted.

 

18. Governing Law. The Plan, Awards granted hereunder and actions taken in connection herewith shall be governed and construed in accordance with the laws of the State of Delaware (regardless of the law that might otherwise govern under applicable Delaware principles of conflict of laws).

 

19. Effective Date. The Plan shall be effective as of the date on which all the conditions to the effectiveness of the Company’s plan of reorganization have been satisfied or waived (the Effective Date).

 

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Index of Defined Terms

 

 

 

 

Term


  

Section Where
Defined or
First Used


Awards

  

1

Board

  

2(a)

Change in Control

  

10(b)

Chapter 11 Plan

  

10(b)

Code

  

2(a)

Committee

  

2(a)

Common Stock

  

3(a)

Company

  

1

Dividend Equivalent Right

  

8(c)

Effective Date

  

19

Exchange Act

  

2(a)

Plan

  

1

Stock Award

  

7(a)

Stock Unit

  

8(c)

 

7

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EX-10.66 10 dex1066.htm EXHIBIT 10.66

EXHIBIT 10.66

 

MCI, INC.

DEFERRED STOCK UNIT PLAN

 

The MCI, Inc. Deferred Stock Unit Plan (the “Plan”) is established and maintained by MCI, Inc. (the “Company”), effective on the date that all conditions to the effectiveness of the Company’s plan of reorganization have been satisfied or waived, to permit Eligible Employees to defer receipt of certain compensation.

 

ARTICLE I

 

DEFINITIONS

 

Wherever used herein the following terms shall have the meanings hereinafter set forth:

 

1.1. “Affiliate” means a subsidiary or other affiliate of the Company.

 

1.2. “Committee” means the Compensation Committee of the Company’s Board of Directors or such other Committee as may be appointed by the Board of Directors of the Company from time to time.

 

1.3. “Company” means MCI, Inc. or any successor corporation or other entity.

 

1.4. “Deferral Form” means a written or electronic form provided by the Committee pursuant to which an Eligible Employee may elect to defer amounts under the Plan.

 

1.5. “Deferred Stock Unit Account” means a bookkeeping account established under the Plan for each Participant electing to defer a Stock Unit Award under Section 3.1.

 

1.6. “Eligible Employee” means an Employee who is designated by the Committee as eligible to participate in the Plan. Eligibility shall be limited to a “select group of management or highly compensated employees,” as such phrase is defined under ERISA. The Committee shall notify any Employee of his status as an Eligible Employee at such time and in such manner as the Committee shall determine. Any determination of the Committee regarding whether an Employee is an Eligible Employee shall be final and binding for all Plan purposes.

 

1.7. “Employee” means an individual who is an employee of the Company or its Affiliates. The term “Employee” shall not include a person designated by the Company or its Affiliates as an independent contractor, leased employee, or consultant, even if such person is determined to be an “employee” by any governmental or judicial authority.

 

1.8. “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

1.9. “Participant” means an Eligible Employee who elects to defer amounts under the Plan.

 

1.10. “Plan” means the MCI, Inc. Deferred Stock Unit Plan, as set forth herein and as amended from time to time.

 

1.11. “Plan Year” means January 1 through December 31.

 

1.12. “Shares” means shares of Company common stock.

 

1.13. “Stock Unit” means a stock unit, as defined under the MCI, Inc. 2003 Management Restricted Stock Plan.

 

1.14. “Stock Unit Award” means an award of Stock Units granted by the Company to an Eligible Employee under the MCI, Inc. 2003 Management Restricted Stock Plan.


1.15. “Vesting Date” means the date a Stock Unit is scheduled to vest, entitling the Stock Unit grantee to distribution of a Share in settlement of the Stock Unit.

 

ARTICLE II

 

PARTICIPATION

 

Any Eligible Employee may elect to participate in the Plan by making a deferral election under Section 3.1.

 

ARTICLE III

 

STOCK UNIT DEFERRALS

 

3.1 Deferrals of Stock Units. An Eligible Employee may elect to defer receipt of all or a portion of the Shares issuable under a Stock Unit Award by completing and submitting a Deferal Form in accordance with procedures established by the Committee. Any such election shall be effective only if it is made at least 6 months before, and in the year prior to the year containing, the date the portion of the Stock Units to be deferred vests. Any such election shall be permitted only if and to the extent the terms of the agreement governing the Stock Unit Award permit such a deferral.

 

3.2 Election Irrevocable. Once an election to defer is made by a Participant under Section 3.1, it shall be permanent and irrevocable.

 

3.3 Crediting of Deferrals. A Participant’s Deferred Stock Unit Account shall be credited with a number of notional Shares equal to the number of Shares deferred under Section 3.1 as soon as practicable after the Shares would have been received by the Participant absent the deferral election. A Participant shall at all times be 100% vested in any amounts credited to his Deferred Stock Unit Account. Nothing in this Section or otherwise in the Plan, however, will require the Company to actually invest amounts credited to a Participant’s Deferred Stock Unit Account in Shares or otherwise.

 

3.4 Adjustments to Accounts. If there shall be any change in the Shares through merger, consolidation, reorganization, recapitalization, stock dividend, stock split, reverse stock split, split up, spin-off, combination of shares, exchange of shares, dividend in kind or other like change in capital structure or distribution (other than regular cash dividends) to shareholders of the Company, an adjustment shall be made to the number and kind of securities credited to a Participant’s Deferred Stock Unit Account such that each such Account shall be credited with such securities, cash and/or other property as would have been received in respect of the Shares credited to the Account immediately prior to such change or distribution, and such an adjustment shall be made successively each time any such change shall occur. The Committee has the authority and discretion to make such adjustments in an equitable manner. Any cash or property other than Shares credited to a Participant’s Deferred Stock Unit Account in accordance with this Section shall be paid in the form and at the time determined by the Committee.

 

3.5 Dividend Equivalent Rights. An amount equal to any regular cash dividend which would have been received had the amounts credited to the Participant’s Deferred Stock Unit Account actually been invested in Shares will be paid to the Participant as soon as practicable after such dividend would have been paid.

 

3.6 Distribution of Deferred Stock Unit Accounts. When a Participant elects to defer receipt of Shares under Section 3.1, he shall also elect a date for distribution of the deferred Shares (the “Distribution Date”). Distribution of Shares will be made as soon as practicable after the Distribution Date. The Distribution Date may be either (a) the fourth January 1 following the Vesting Date for the related Stock Units, (b) the sixth January 1 following the Vesting Date for the related Stock Units, or (c) the date the Participant terminates employment with the Company and its Affiliates. Notwithstanding the Participant’s elected Distribution Date(s), all Shares credited to the Participant’s Deferred Stock Unit Account shall be distributed as soon as practicable after the Participant terminates employment with the Company and its affiliates.

 

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3.7 Distributions Upon Death. If a Participant dies before distribution of all Shares credited to his Deferred Stock Unit Account, any remaining Shares shall be distributed as soon as practicable to the beneficiary designated by the Participant in a writing delivered to the Committee prior to death. If a Participant has not designated a beneficiary or if no designated beneficiary is living on the date of death, such Shares shall be distributed to the Participant’s estate.

 

3.8 Manner of Payment. All distributions under this Article III shall be in the form of Shares, provided that the value of any fractional Share deemed held in a Participant’s Deferred Stock Unit Account, shall be paid in cash. The value of a fractional Share shall be determined for this purpose by the Committee.

 

3.9 Restrictions on Shares. Shares distributed under the Plan shall be subject to the same restrictions on sale, transfer, and disposition that would have applied to any Shares a Participant was to receive upon settlement of his Stock Units under the terms of the agreement governing the Stock Unit Award.

 

ARTICLE IV

 

ADMINISTRATION

 

4.1 General Administration. The Committee shall be responsible for the operation and administration of the Plan and for carrying out the provisions hereof. Any matter requiring interpretation of any Plan provision shall be made in the sole and absolute discretion of the Committee, which interpretation shall be final and conclusive on any party. The Committee shall be entitled to rely conclusively upon all tables, valuations, certificates, opinions and reports furnished by any actuary, accountant, controller, counsel or other person employed or engaged by the Company with respect to the Plan.

 

4.2 Effect of Taxation. Any provision of the Plan shall cease to be operable and any action which may be taken under the terms of the Plan (including without limitation any Participant distribution elections) shall cease to be available, to the extent such provision or permitted action would cause Shares deferred under the Plan to be treated as immediately taxable for federal income tax purposes for one or more Participants, as determined by the Committee, in its sole discretion. The Committee shall notify Participants of any determination under this Section as soon as practicable thereafter.

 

4.3 Claims for Benefits.

 

(a) Filing a Claim. A Participant or his authorized representative may file a claim for benefits under the Plan. Any claim must be in writing and submitted to the Committee at such address as may be specified from time to time. Claimants will be notified in writing of approved claims, which will be processed as claimed. A claim is considered approved only if its approval is communicated in writing to a claimant.

 

(b) Denial of Claim. In the case of the denial of a claim for benefits paid or payable with respect to a Participant, a written notice will be furnished to the claimant within 90 days of the date on which the claim is received by the Committee. If special circumstances (such as for a hearing) require a longer period, the claimant will be notified in writing, prior to the expiration of the 90-day period, of the reasons for an extension of time; provided, however, that no extensions will be permitted beyond 90 days after the expiration of the initial 90-day period.

 

(c) Reasons for Denial. A denial or partial denial of a claim will clearly set forth:

 

(i) the specific reason or reasons for the denial;

 

(ii) specific reference to pertinent Plan provisions on which the denial is based;

 

(iii) a description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary; and

 

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(iv) an explanation of the procedure for review of the denied or partially denied claim set forth below, including the claimant’s right to bring a civil action under ERISA section 502(a) following an adverse benefit determination on review.

 

(d) Review of Denial. Upon denial of a claim, in whole or in part, a claimant or his duly authorized representative will have the right to submit a written request to the Committee for a full and fair review of the denied claim by filing a written notice of appeal with the Committee within 60 days of the receipt by the claimant of written notice of the denial of the claim. A claimant or the claimant’s authorized representative will have, upon written request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits, and also may submit issues and comments in writing. The review will take into account all comments, documents, records, and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.

 

If the claimant fails to file a request for review within 60 days of the denial notification, the claim will be deemed abandoned and the claimant precluded from reasserting it. If the claimant does file a request for review, his request must include a description of the issues and evidence he deems relevant. Failure to raise issues or present evidence on review will preclude those issues or evidence from being presented in any subsequent proceeding or judicial review of the claim.

 

(e) Decision Upon Review. The Committee will provide a prompt written decision on review. If the claim is denied on review, the decision shall set forth:

 

(i) the specific reason or reasons for the adverse determination;

 

(ii) specific reference to pertinent Plan provisions on which the adverse determination is based;

 

(iii) a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the claimant’s claim for benefits; and

 

(iv) a statement describing any voluntary appeal procedures offered by the Plan and the claimant’s right to obtain the information about such procedures, as well as a statement of the claimant’s right to bring an action under ERISA section 502(a).

 

A decision will be rendered no more than 60 days after the Committee’s receipt of the request for review, except that such period may be extended for an additional 60 days if the Committee determines that special circumstances (such as for a hearing) require such extension. If an extension of time is required, written notice of the extension will be furnished to the claimant before the end of the initial 60-day period.

 

The Committee will have full authority to interpret and apply in its discretion the provisions of the Plan in its review of denied benefit claims.

 

(f) Finality of Determinations; Exhaustion of Remedies. Decisions reached under the claims procedures set forth in this Section shall be final and binding on all parties. No legal action for benefits under the Plan shall be brought unless and until the claimant has exhausted his remedies under this Section. In any such legal action, the claimant may only present evidence and theories which the claimant presented during the claims procedure. Any claims which the claimant does not in good faith pursue through the review stage of the procedure shall be treated as having been irrevocably waived. Judicial review of a claimant’s denied claim shall be limited to a determination of whether the denial was an abuse of discretion based on the evidence and theories the claimant presented during the claims procedure. Any suit or legal action initiated by a claimant with respect to the Plan must be brought by the claimant no later than one year following a final decision on the claim for benefits by the Committee. The one-year limitation on suits for benefits will apply in any forum where a claimant initiates such suit or legal action.

 

(g) Effect of Committee Action. The Plan shall be interpreted by the Committee in accordance with the terms of the Plan and their intended meanings. However, the Committee shall have the discretion to make

 

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any findings of fact needed in the administration of the Plan, and shall have the discretion to interpret or construe ambiguous, unclear or implied (but omitted) terms in any fashion it deems to be appropriate in its sole judgment. The validity of any such finding of fact, interpretation, construction or decision shall not be given de novo review if challenged in court, by arbitration or in any other forum, and shall be upheld unless clearly arbitrary or capricious. To the extent the Committee has been granted discretionary authority under the Plan, the Committee’s prior exercise of such authority shall not obligate it to exercise its authority in a like fashion thereafter. All actions taken and all determinations made in good faith by the Committee shall be final and binding upon all persons claiming any interest in or under the Plan.

 

4.4 Indemnification. To the extent not covered by insurance, the Company shall indemnify the Committee, each employee, officer, director, and agent of the Company, and all persons formerly serving in such capacities, against any and all liabilities or expenses, including all legal fees relating thereto, arising in connection with the exercise of their duties and responsibilities with respect to the Plan, provided however that the Company shall not indemnify any person for liabilities or expenses due to that person’s own gross negligence or willful misconduct.

 

4.5 Nature of Plan. The Plan is intended to be “a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees” within the meaning of sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, and shall be administered in a manner consistent with that intent.

 

ARTICLE V

 

AMENDMENT OR TERMINATION

 

5.1 Amendment or Termination. The Company intends the Plan to be permanent but reserves the right to amend or terminate the Plan in the sole discretion at any time.

 

5.2 Effect of Amendment or Termination. No amendment or termination of the Plan shall adversely affect the rights of any Participant to amounts credited to his Deferred Stock Unit Account as of the effective date of such amendment or termination. Upon termination of the Plan, distribution of Shares deemed held in Deferred Stock Unit Accounts shall be made to Participants and beneficiaries in the manner and at the time described in Article III of the Plan. Upon termination of the Plan, no further deferrals of Stock Units shall be permitted; however, deemed dividends on deferred Stock Units shall continue to be paid in accordance with Article III.

 

ARTICLE VI

 

GENERAL PROVISIONS

 

6.1 Rights Unsecured. The right of a Participant or his beneficiary to receive a distribution hereunder shall be an unsecured claim against the general assets of the Company, and neither the Participant nor his beneficiary shall have any rights in or against any amount credited to any Deferred Stock Unit Accounts under this Plan or any other assets of the Company. The Plan at all times shall be considered entirely unfunded for tax purposes. Any funds set aside by the Company for the purpose of meeting its obligations under the Plan, including any amounts held by a trustee, shall continue for all purposes to be part of the general assets of the Company and shall be available to its general creditors in the event of the Company’s bankruptcy or insolvency.

 

6.2 No Guarantee of Benefits. Nothing contained in the Plan shall constitute a guarantee by the Company or any other person or entity that the assets of the Company will be sufficient to pay any benefits hereunder.

 

6.3 No Enlargement of Rights. No Participant or beneficiary shall have any right to receive a distribution under the Plan except in accordance with the terms of the Plan. Establishment of the Plan shall not be construed to give any Participant the right to continue to provide services to the Company.

 

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6.4 Spendthrift Provision. No interest of any person in, or right to receive a distribution under, the Plan shall be subject in any manner to sale, transfer, assignment, pledge, attachment, garnishment, or other alienation or encumbrance of any kind; nor may such interest or right to receive a distribution be taken, either voluntarily or involuntarily for the satisfaction of the debts of, or other obligations or claims against, such person.

 

6.5 Applicable Law. To the extent not preempted by federal law, the Plan shall be governed by the laws of the State of Delaware.

 

6.6 Incapacity of Recipient. If any person entitled to a distribution under the Plan is deemed by the Company to be incapable of personally receiving and giving a valid receipt for such payment, then, unless and until a claim for such payment shall have been made by a duly appointed guardian or other legal representative of such person, the Company may provide for such payment or any part thereof to be made to any other person or institution then contributing toward or providing for the care and maintenance of such person. Any such payment shall be a payment for the account of such person and a complete discharge of any liability of the Company and the Plan with respect to the payment.

 

6.7 Taxes. The Company or other payor may withhold from a distribution under the Plan, or from other compensation payable to a Participant, any federal, state or local taxes required by law to be withheld with respect to any deferred amount or distribution, and shall report such distributions and other Plan-related information to the appropriate governmental agencies as required under applicable laws.

 

6.8 Corporate Successors. The Plan and the obligations of the Company under the Plan shall become the responsibility of any successor to the Company by reason of a transfer or sale of assets of the Company or by the merger or consolidation of the Company into or with any other corporation or other entity.

 

6.9 Unclaimed Benefits. Each Participant shall keep the Company informed of his current address and the current address of his designated beneficiary. The Company shall not be obligated to search for the whereabouts of any person if the location of a person is not made known to the Company.

 

6.10 Words and Headings. Words in the masculine gender shall include the feminine and the singular shall include the plural, and vice versa, unless qualified by the context. Any headings used herein are included for ease of reference only, and are not to be construed so as to alter the terms hereof.

 

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IN WITNESS WHEREOF, MCI, Inc. has caused this MCI, Inc. Deferred Stock Unit Plan to be executed by its duly authorized officers on this              day of                     , 2004.

 

 

 

 

 

 

 

 

MCI, INC.

 

 

 

ATTEST:

 

 

 

 

 

 

 

 


 

By:

 

 


 

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