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MCI Awards $8.1 Million Severance

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By Christopher Stern
Washington Post Staff Writer
Thursday, May 13, 2004; Page E01

MCI Inc., which plans to trim 12,000 workers from its payroll this year, agreed to make a $8.1 million severance payment to a former executive who worked just seven months for the long-distance company.

Ashburn-based MCI disclosed the severance agreement with former president and chief operating officer Richard R. Roscitt in a filing with the Securities and Exchange Commission. Roscitt, a former AT&T Corp. executive, joined MCI in August of last year and left in March of this year.

Roscitt joined MCI in the middle of its 21-month stay in bankruptcy reorganization. At the time he was hired, the company touted his 30 years of experience in telecommunications, including key leadership roles at AT&T.

Under the terms of his original employment contract, Roscitt will be paid $8.1 million plus a bonus of $450,000 related to his performance while at MCI. Roscitt has an unlisted phone number and could not be reached for comment.

Roscitt is also due pay for four weeks of vacation under the agreement along with "secretarial support, continuation of Internet access, and reimbursement of fees for cellular phone service for up to six months." The company also provided him with a computer for use at his home.

An MCI official said the severance payment was consistent with Roscitt's original contract, which was approved by the federal bankruptcy court and also by a court-appointed corporate monitor. "It's certainly not uncommon for companies, especially companies going through challenging times, to offer attractive employment agreements to lure talent," said MCI spokesman Brad Burns.

Roscitt's position was effectively eliminated earlier this year when MCI chief executive Michael D. Capellas assumed Roscitt's title of president. Capellas hired Roscitt thinking that Roscitt's telecommunications experience would help balance his own background in the computer industry.

When MCI announced Roscitt's departure in March, the company said in a press release that he "elected to leave the company to pursue other opportunities." However, according to the separation agreement included in MCI's recent SEC filing, Roscitt resigned "at the request of the company." The agreement did not elaborate.

Sources familiar with Roscitt's employment at the company said the longtime AT&T executive had difficulty fitting into the faster-paced culture of MCI. At the time, MCI, then known as WorldCom Inc., was struggling to emerge from bankruptcy while defending itself from charges of corporate fraud.

MCI and its long-distance competitors continue to grapple with a severe downtown due to competition from the big regional phone companies and wireless carriers. MCI has projected a 23 percent revenue decline this year and announced earlier this week that it is cutting its total staff by 15 percent. According to MCI's Burns, most rank-and-file employees are offered three months' salary as severance.


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