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AMENDMENT AGREEMENT
EXHIBIT 7
AMENDMENT AGREEMENT, dated as of February 14, 1997 (this "Amendment
Agreement"), among BRITISH TELECOMMUNICATIONS plc, a public limited corporation
incorporated under the laws of England and Wales ("BT"), MCI COMMUNICATIONS
CORPORATION, a Delaware corporation ("MCI"), and TADWORTH CORPORATION, a
Delaware corporation and a wholly owned subsidiary of BT ("Merger Sub").
WHEREAS, BT, MCI and Merger Sub are parties to an Agreement and Plan of
Merger, dated as of November 3, 1996 (the "Merger Agreement");
WHEREAS, Section 7.3 of the Merger Agreement provides that the Merger
Agreement may be amended by the parties thereto, by action taken or authorized
by their respective Boards of Directors, at any time before or after approval
of the matters presented in connection with the Merger (as defined in the
Merger Agreement) by the stockholders of MCI or BT, by an instrument in writing
signed on behalf of each of the parties thereto;
WHEREAS, BT, MCI and Merger Sub desire to amend the Annexes to the Merger
Agreement effective immediately;
NOW THEREFORE, in consideration of the premises and for other valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
hereby agree as follows:
1. Amendment to Exhibit B to Annex A. Exhibit B to Annex A of the Merger
Agreement is hereby amended by deleting the definition of "Cause" under the
section entitled "Optionholders; Management Employee Bonus Program and Other
Employee Bonus Program" in its entirety and inserting in lieu thereof the
following:
"Cause" shall mean (1) "Cause" as defined in the participant's
employment agreement, or if applicable to such participant, the
Executive Severance Program, and (ii) with respect to any other
participant: (A) theft or embezzlement of property of MCI or any of
its affiliates; (B) fraud or wrongdoing against MCI or any of its
affiliates; (C) a conviction of a crime of moral turpitude; (D)
receipt of consideration or acceptance of benefits from, or the
participation in business activities with, persons doing business with
MCI or any of its affiliates, in violation of the business ethics
policy of MCI; (E) malicious destruction of property of MCI or any of
its affiliates; (F) improper disclosure of trade secrets of MCI or any
of its affiliates; (G) actively engaging in, or working for a business
in, direct competition with MCI or any of its affiliates while
employed by MCI or one of its affiliates; or (H) such other reason as
the Compensation Committee of the Board of Directors of MCI may
determine. MCI shall determine whether a termination of employment has
occurred for "Cause."
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2. Amendment to Annex B. Annex B of the Merger Agreement is hereby amended
by adding the following to section 3 thereof:
"Each Senior Retention ISU will provide for the payment, deferral or
reinvestment, at the holder's election pursuant to a program established by
MCI prior to the Effective Time, of dividend equivalents equal to the
amount of any dividends that would have been paid to the holder thereof
following the Effective Time had the BT ADSs underlying such Senior
Retention ISU been issued and outstanding on the applicable dividend record
date."
3. Authorization: Effectiveness. (a) Each party hereto represents that
this Amendment Agreement has been duly executed and delivered by such party and
constitutes a valid and binding obligation of such party, enforceable against
such party in accordance with its terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and similar laws
relating to or affecting creditors generally, by general equitable principles
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) or by an implied covenant of good faith and fair dealing.
(b) This Amendment Agreement shall become effective upon execution and
delivery by the parties hereto. Except as expressly amended hereby, the
provisions of the Merger Agreement are and shall remain in full force and
effect.
4. Governing Law. This Amendment Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
5. Counterparts. This Amendment Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
IN WITNESS WHEREOF, BT, MCI and Merger Sub have caused this Amendment
Agreement to be signed by their respective officers thereunto duly authorized,
all as of the day and year first above written.
BRITISH TELECOMMUNICATIONS plc
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Secretary and Chief Legal Adviser
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MCI COMMUNICATIONS CORPORATION
By: /s/ Xxxx X. Xxxxxxx, Xx.
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Name: Xxxx X. Xxxxxxx, Xx.
Title: Chairman
TADWORTH CORPORATION
By: -----------------------
Name:
Title:
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MCI COMMUNICATIONS CORPORATION
By:
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Name:
Title:
TADWORTH CORPORATION
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: Vice President and Secretary
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