WorldCom Director Resigns Under Pressure

One of WorldCom Inc.’s longest-serving directors, Stiles Kellett, has resigned from the telecommunications giant, his lawyer said Monday, after being pressured by the board to step down.

Kellett, whose decision came Sunday night, had been under fire for his use of company aircraft. He has agreed to pay $119,000 to settle the controversy, as well as $3,000 an hour for use of the jet.

“He wanted to save the company further distraction,” his lawyer, Stuart Pierson, said.

WorldCom had asked Kellett to resign after court-appointed bankruptcy monitor Richard Breeden criticized a deal that let Kellett use company aircraft for $1 a month plus a $400-an-hour usage fee, the sources said. Breeden had pushed for Kellett’s removal.

Kellett and WorldCom’s former chief executive, Bernard J. Ebbers, forged the aircraft pact without the full knowledge of the board, sources have said.

Kellett kept the Falcon 20 near his home in Atlanta under a one-year lease, the Washington Post reported in July.

Kellett, who was on the WorldCom board for 12 years, is chairman of Kellett Investment Corp. and serves as a director on other company boards. He was on WorldCom’s compensation and stock option committee when the Clinton-based company provided $408 million in personal loans and pension benefits to Ebbers.

The company is trying to nullify Ebbers’ pension deal, sources said.

WorldCom, which filed for Chapter 11 protection in July, has disclosed $7.2 billion in accounting errors.

“I have decided to offer the company a monetary resolution of the current controversy over my lease of a corporate aircraft,” Kellett said in a statement sent to Bloomberg News via e-mail by his attorney. Because the payment “exceeds what was fair and reasonable to the company -- which the company does not contest -- it removes all possibility of criticism of the company, the board of directors and me.”