8-K

SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549-1004

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FORM 8-K

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CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported): December 30, 2005

MCI, Inc.(Exact Name of Registrant as Specified in Charter)
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DELAWARE	001-10415	20-0533283
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

22001 Loudoun County Parkway,	20147
Ashburn, Virginia
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (703) 886-5600

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 1.01. Entry into a Material Definitive Agreement.

On September 30, 2005, the Internal Revenue Service proposed regulations under Section 409A of the Internal Revenue Code of 1986, which governs the taxation of arrangements that provide for the deferral of compensation and that could have the effect of increasing taxes incurred in connection with severance arrangements. In light of these regulations, on December 30, 2005, the board of directors of MCI, Inc. unanimously approved an amendment to the employment agreement with Michael Capellas, and the Compensation Committee unanimously approved amendments to the employment agreements with Robert Blakely, Jonathan Crane and Anastasia Kelly to provide tax treatment consistent with that intended under their existing employment agreements. The amendments provide that upon the closing of the Company’s acquisition by Verizon Communications Inc.:

• Messrs. Capellas, Blakely and Crane and Ms. Kelly will receive the same payments and benefits that they would have received under their existing employment agreements had their employment terminated as of the closing of the acquisition without cause (other than due to death or disability) or for good reason. Such payments and benefits have been previously disclosed in the Company’s filings with the Securities and Exchange Commission.
• For Messrs. Blakely and Crane and Ms. Kelly, unvested equity awards will vest and any restrictions on disposition of restricted stock will lapse.

A copy of the amendment for Mr. Capellas and the form of amendment for Messrs. Blakely and Crane and Ms. Kelly are filed herewith as Exhibit 10.1 and 10.2, respectively. The foregoing description is qualified in its entirety by reference to the full text of each such Exhibit.

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SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	MCI, INC. (Registrant)
	By:	/s/ Robert T. Blakely
	Name:	Robert T. Blakely
	Title:	Executive Vice President and Chief Financial Officer
Date:  January 5, 2006

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EXHIBIT INDEX

Exhibit No.	Description
10.1	Amendment to the Employment Agreement between MCI, Inc. and Michael D. Capellas, effective as of December 30, 2005
10.2	Form of First Amendment to the Employment Agreement between MCI, Inc. and certain named executive officers, effective as of December 30, 2005

EX-10.1

Exhibit 10.1

FIRST AMENDMENT TO THE
EMPLOYMENT AGREEMENT BETWEEN MCI, INC. AND
[                   ]

     Effective [                   ], 2004, MCI, Inc. (the “Company”) and [                   ] (the “Executive”) entered into an Employment Agreement (the “Agreement”). The Agreement is hereby amended as follows, effective as of December 30, 2005.

1.

New Sections 13(e) and 13(f) are added to read as follows:

“(e) Payment on Change in Control. In the event the merger contemplated by that certain Agreement and Plan of Merger, dated as of February 14, 2005, as amended, among Verizon Communications, Inc., Eli Acquisition LLC and MCI, Inc. becomes effective (which merger will constitute a Change in Control as defined in Section 13(a) and a change in control, as defined under Code Section 409A(a)(2)(A)(v) and IRS guidance thereunder): (i) all unvested equity awards shall immediately vest and any restrictions on disposition of vested stock or on the payment of any deferred stock units shall lapse and (ii) provided Executive executes (without revocation) a general release substantially in the form of Appendix 2 hereto (modified, as applicable, to reflect this Section 13(e)),

	(A)	Executive shall be entitled to a lump sum payment payable within 10 business days after the effective date of the merger equal to the amounts described in Sections 13(c)(i), 13(c)(vi), 13(c)(vii), 13(c)(viii), and 13(d), and
	(B)	the Executive shall become entitled to the payments and benefits described in Sections 13(c)(ii), 13(c)(iii), 13(c)(iv) and 13(c)(viii) (provided, that such benefits shall not duplicate any benefits to which Executive may be entitled as a result of employment with the Company after the merger).
If Executive becomes entitled to payments or benefits under this Section 13(e)(ii), Executive shall not be entitled at any time to any similar payments or benefits under Section 9 or Section 13(c) or any severance benefits under any of the Company’s severance plans.

(f) Code Section 409A. It is intended that the Agreement shall comply with the provisions of Code Section 409A and the Treasury regulations relating thereto so as not to subject the Executive to the payment of additional taxes and interest under Code Section 409A. In furtherance of this intent, this Agreement shall be interpreted, operated and administered in a manner consistent with these intentions, and to the extent that any regulations or other guidance issued under Code Section 409A would result in the Executive being subject to payment of additional income taxes or interest under Code Section 409A, the parties agree to amend the Agreement in order to avoid the application of such taxes or interest under Code Section 409A.”

2.

The terms of the Agreement as in effect prior to this First Amendment not amended hereby shall be and remain in full force and effect and not affected by this First Amendment.

     IN WITNESS WHEREOF, the parties have executed this First Amendment on the dates indicated below, effective as of the date set forth above.

COMPANY	EXECUTIVE
By	Signature of Executive
Title	Date
Date	Address – Street
	Address – City, State, Zip Code

EX-10.2

Exhibit 10.2

AMENDMENT TO THE

EMPLOYMENT AGREEMENT BETWEEN MCI, INC. AND MICHAEL D. CAPELLAS

     MCI, Inc. (the “Company”) and Michael D. Capellas (the “Executive”) entered into that certain Employment Agreement setting forth a definitive statement of terms and conditions of employment that were agreed to on December 16, 2002 (the “Agreement”). The Agreement is hereby amended as follows, effective as of December 30, 2005.

1.	A new Section 30 is added to read as follows:
	“30. Payment on Change in Control. In the event the merger contemplated by that certain Agreement and Plan of Merger, dated as of February 14, 2005, as amended, among Verizon Communications, Inc., Eli Acquisition LLC and MCI, Inc. becomes effective (which merger will constitute a change in control, as defined under Code Section 409A(a)(2)(A)(v) and IRS guidance thereunder):
	(i) all unvested equity awards shall immediately vest and any restrictions on disposition of vested stock or on the payment of any deferred stock units shall lapse to the same extent provided in Section 13(a) in the event of termination of the Executive’s employment under circumstances described in clause (i) thereof,
	(ii) Executive shall be entitled to a lump sum payment payable within 10 business days after the effective date of the merger equal to the amounts described in Sections 10(a)(i)and 15, and
	(iii) Executive shall become entitled to the payments and benefits described in Sections 10(a)(ii) and 10(a)(iii) (provided, that such benefits shall not duplicate any benefits to which Executive may be entitled as a result of employment with the Company after the merger).
	If Executive becomes entitled to payments or benefits under this Section 30, Executive shall not be entitled at any time to any payments or benefits under Sections 10 or Section 13 or any severance benefits under any of the Company’s severance plans.”
2.	A new Section 31 is added to read:
	“31. Code Section 409A. It is intended that the Agreement shall comply with the provisions of Code Section 409A and the Treasury regulations relating thereto so as not to subject the Executive to the payment of additional taxes and interest under Code Section 409A. In furtherance of this intent, this Agreement

shall be interpreted, operated and administered in a manner consistent with these intentions, and to the extent that any regulations or other guidance issued under Code Section 409A would result in the Executive being subject to payment of additional income taxes or interest under Code Section 409A, the parties agree to amend the Agreement in order to avoid the application of such taxes or interest under Code Section 409A.”

3.

The terms of the Agreement as in effect prior to this Amendment not amended hereby shall be and remain in full force and effect and not affected by this Amendment.

     IN WITNESS WHEREOF, the parties have executed this Amendment as of the dates indicated below.

COMPANY	EXECUTIVE
By	Michael D. Capellas
Title	Date
Date	Address – Street
	Address – City, State, Zip Code