EXHIBIT 10.16
SECOND AMENDED AND RESTATED
JANUARY 1999 STOCKHOLDERS' AGREEMENT
This Second Amended and Restated January 1999 Stockholders'
Agreement (this "Agreement") is entered into as of December 17, 1999, by and
among McLeodUSA Incorporated, a Delaware corporation (the"Company"); Alliant
Energy Corporation, a Wisconsin corporation ("AEC"); IES Investments Inc., an
Iowa corporation (n/k/a Alliant Energy Investments, Inc.) and indirect wholly
owned subsidiary of AEC ("IES"); Heartland Properties, Inc., a Wisconsin
corporation and indirect wholly owned subsidiary of AEC ("Heartland");
Alliant Energy Foundation, Inc., a Wisconsin corporation (non-profit) ("AEF"
and together with AEC, IES and Heartland, the "AEC Entities"); Clark E.
McLeod ("McLeod"); Mary E. McLeod (together with McLeod, the "McLeods");
Richard A. Lumpkin ("Lumpkin") and each of the former shareholders of
Consolidated Communications Inc. ("CCI") and certain permitted transferees of
the former CCI shareholders in each case who are listed in Schedule I hereto
(the "CCI Shareholders"); and M/C Investors L.L.C., a Delaware limited
liability company ("M/C Investors") and Media/Communications Partners III
Limited Partnership, a Delaware limited partnership ("M/C Partners" and
together with M/C Investors, the"M/C Stockholders"). The AEC Entities, the
McLeods, Lumpkin and the CCI Shareholders party hereto are referred to herein
collectively as the"Original Stockholders" and individually as an"Original
Stockholder."
WHEREAS, the Company, IES, the McLeods, Lumpkin, the CCI
Shareholders party hereto and the M/C Stockholders are parties to an Amended
and Restated January 1999 Stockholders' Agreement, entered into as of
September 15, 1999 (the "Amended and Restated January 1999 Stockholders'
Agreement");
WHEREAS, the Company, IES, the McLeods, Lumpkin, the CCI
Shareholders party hereto and the M/C Stockholders desire to add each of AEC,
Heartland and AEF as a party to this Agreement and to make certain other
changes in accordance with the terms herein set forth;
WHEREAS, the Company, the Original Stockholders and the M/C
Stockholders deem it to be in the best interests of the Company and its
stockholders to provide for the continuity and stability of the business and
policies of the Company on the terms and conditions hereinafter set forth;
WHEREAS, concurrently with execution and delivery of this
Agreement, the Company and the Original Stockholders are entering into an
amendment and restatement of the Amended and Restated November 1998
Stockholders' Agreement, entered into as of September 15, 1999; and
WHEREAS, the Company, the Original Stockholders and the M/C
Stockholders desire to amend and restate the Amended and Restated January
1999 Stockholders' Agreement in its entirety with the terms and conditions
hereinafter set forth;
NOW, THEREFORE, for and in consideration of the foregoing and of
the mutual covenants and agreements contained herein, the parties hereto
agree as follows:
1. [INTENTIONALLY DELETED]
2. VOTING AGREEMENT
2.1 Board of Directors
For the period commencing on the Effective Date (as defined in Section
2.2) and ending on the Expiration Date (as defined in Section 2.2), each
Original Stockholder and the M/C Stockholders, for so long as each such
Original Stockholder and the M/C Stockholders beneficially and continuously
owns at least five million (5,000,000) shares of the Company's Class A common
stock, $.01 par value per share (the "Class A Common Stock"), subject to
adjustment pursuant to Section 5.1, shall take or cause to be taken all such
action within their respective power and authority as may be required:
(a) to establish and maintain the authorized size of the Board of
Directors of the Company (the "Board of Directors" or the "Board") at
up to thirteen (13) directors;
(b) to cause to be elected to the Board one (1) director designated by the
AEC Entities, for so long as the AEC Entities collectively
beneficially and continuously own at least five million (5,000,000)
shares of Class A Common Stock (subject to adjustment pursuant to
Section 5.1);
(c) to cause Lumpkin to be elected to the Board, for so long as Lumpkin
and the CCI Shareholders collectively beneficially and continuously
own at least five million (5,000,000) shares of Class A Common Stock
(subject to adjustment pursuant to Section 5.1);
(d) to cause to be elected to the Board three (3) directors who are
executive officers of the Company designated by McLeod, for so long as
the McLeods collectively beneficially and continuously own at least
five million (5,000,000) shares of Class A Common Stock (subject to
adjustment pursuant to Section 5.1);
(e) to cause to be elected to the Board one (1) director designated by the
M/C Stockholders, for so long as the M/C Stockholders collectively
beneficially and continuously own at least five million (5,000,000)
shares of Class A Common Stock (subject to adjustment pursuant to
Section 5.1);
(f) to cause to be elected to the Board a director or directors nominated
by the Board to replace a director or directors designated pursuant to
paragraphs (b) through (e) above upon the earlier to occur of such
designated director's or directors' resignation (and the acceptance of
such resignation by the Board) and the expiration of such director's
or directors' term as a result of any party or parties identified in
paragraphs (b) through (e) above no longer collectively beneficially
and continuously owning at least five million (5,000,000) shares of
Class A Common Stock (subject to adjustment pursuant to Section 5.1)
at any time during the period commencing on the Effective Date and
ending on the Expiration Date; it being understood that within three
(3) business days following such time that the party or parties
identified in paragraphs (b) through (e) above no longer collectively
beneficially and continuously own at least five million (5,000,000)
shares of Class A Common Stock (subject to adjustment pursuant to
Section 5.1) during such period, such party or parties shall use its
or their respective best efforts to cause the director or directors
designated by such party or parties to tender their immediate
resignation to the Board which the Board may accept or reject; and
(g) to cause to be elected to the Board, if and as nominated by the Board,
up to seven (7) non-employee directors.
For purposes of this Section 2.1, (i) the McLeods shall be deemed
to be a single Original Stockholder of the Company, (ii) the M/C Stockholders
shall be deemed to be a single stockholder of the Company, and the M/C
Stockholders shall be deemed to own shares "continuously" as long as the
shares of the M/C Stockholders are owned by the M/C Stockholders or an M/C
Stockholder Permitted Transferee (as defined in Section 3.1), (iii) Lumpkin
and all of the CCI Shareholders shall be deemed to be a single Original
Stockholder of the Company, and the CCI Shareholders shall be deemed to own
shares "continuously" as long as the shares of the CCI Shareholders are owned
by the CCI Shareholders or a CCI Permitted Transferee (as defined in the
Second Amended and Restated November 1998 Stockholders' Agreement (as defined
in Section 2.2)), and (iv) the AEC Entities shall be deemed to be a single
Original Stockholder of the Company, and the AEC Entities shall be deemed to
own shares "continuously" as long as the shares of the AEC Entities are owned
by the AEC Entities or an AEC Permitted Transferee (as defined in the Second
Amended and Restated November 1998 Stockholders' Agreement).
2.2 Definitions
For purposes of this Agreement, the following terms have the
meanings indicated:
(a) "Affiliate" and"Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act").
(b) A person shall be deemed the "beneficial owner" of
and shall be deemed to"beneficially own" any securities:
(i) which such person or any of such person's
Affiliates or Associates, directly or indirectly,
has the right to acquire (whether such right is
exercisable immediately or only after the passage
of time) pursuant to any agreement, arrangement
or understanding (whether or not in writing), or
upon the exercise of conversion rights, exchange
rights, other rights, warrants or options, or
otherwise;
(ii) which such person or any of such person's
Affiliates or Associates, directly or indirectly,
has the right to vote or dispose of or has
"beneficial ownership" of (as determined pursuant
to Rule 13d-3 under the Exchange Act), including
pursuant to any agreement, arrangement or
understanding, whether or not in writing; or
(iii) which are beneficially owned, directly or
indirectly, by any other person (or any Affiliate
or Associate thereof) with which such person or
any of such person's Affiliates or Associates has
any agreement, arrangement or understanding
(whether or not in writing), for the purpose of
acquiring, holding, voting or disposing of any
voting securities of the Company.
For purposes of the definition of "beneficial owner" and
"beneficially own," the terms "agreement," "arrangement"
and"understanding" shall not include this Agreement or the
Second Amended and Restated November 1998 Stockholders'
Agreement.
(c) "Effective Date" shall mean December 17, 1999.
(d) "Expiration Date" shall mean December 31, 2001.
(e) "Merger" shall mean the merger of Ovation
Communications, Inc. with and into Bravo Acquisition
Corporation pursuant to the terms and conditions of the
Merger Agreement.
(f) "Merger Agreement" shall mean the Agreement and Plan
of Merger, dated as of January 7, 1999, by and among the
Company, Bravo Acquisition Corporation, Ovation
Communications, Inc. and certain of the stockholders of
Ovation Communications, Inc.
(g) "Second Amended and Restated November 1998
Stockholders' Agreement" shall mean the Second Amended and
Restated November 1998 Stockholders' Agreement, entered
into as of December 17, 1999, by and among the Company and
the Original Stockholders.
(h) "Stock Split" shall mean that certain two-for-one
stock split in the form of a stock dividend paid on July
26, 1999 to stockholders of record on July 12, 1999
effected by the Company with respect to its Class A Common
Stock.
3. TRANSFERS OF SECURITIES
3.1 Restrictions on Transfers
(a) Except as otherwise provided in this Section 3.1 or Section
3.2, the M/C Stockholders hereby agree that until the Expiration Date, the
M/C Stockholders will not offer, sell, contract to sell, grant any option to
purchase, or otherwise dispose of, directly or indirectly, ("Transfer"), any
equity securities of the Company or any other securities convertible into or
exercisable for such equity securities ("Securities") beneficially owned by
such M/C Stockholders as a result of the Merger (including distributions of
Securities with respect to such Securities and Securities acquired as a
result of a stock split with respect to such Securities) without submitting a
written request to, and receiving the prior written consent of, the Board of
Directors; provided, however, that the M/C Stockholders may transfer
Securities to any beneficial owner or Affiliate of the M/C Stockholders, in
each case provided that (i) such transfer is done in accordance with the
transfer restrictions applicable to such Securities under federal and state
securities laws and (ii) the transferee agrees to be bound by the terms
hereof (as this Agreement may be amended or amended and restated from time to
time) as an M/C Stockholder with respect to the shares being transferred
pursuant to this Section (any such M/C Stockholder transferee pursuant to the
foregoing proviso, an"M/C Stockholder Permitted Transferee"), and any such
transfer shall not constitute a"Transfer" for purposes of this Agreement.
Notwithstanding the foregoing, no party hereto shall avoid the provisions of
this Agreement by making one or more transfers to one or more M/C Stockholder
Permitted Transferees and then at any time directly or indirectly disposing
of all or any portion of such party's interest in any such M/C Stockholder
Permitted Transferee. In the event that the Board of Directors consents to
any Transfer of Securities by a Principal Stockholder (for purposes of this
Agreement, the term "Principal Stockholder" shall have the same meaning as
ascribed to such term in the Second Amended and Restated November 1998
Stockholders' Agreement) pursuant to Section 3.1(a) of the Second Amended and
Restated November 1998 Stockholders' Agreement upon the written request of
such Principal Stockholder (the"Transferring Principal Stockholder") during
the period commencing on January 1, 2000 and ending on the Expiration Date
and except as otherwise provided in Section 3.1(b) and Section 3.2 of this
Agreement, the M/C Stockholders shall, notwithstanding the provisions of this
Section 3.1(a), have the right to Transfer a percentage of the total number
of Securities beneficially owned by the M/C Stockholders equal to the
percentage of the total number of Securities beneficially owned by the
Transferring Principal Stockholder that the Board of Directors has consented
may be Transferred by such Transferring Principal Stockholder. In the event
the Board of Directors consents to any Transfer of Securities by the M/C
Stockholders pursuant to this Section 3.1(a) upon the written request of the
M/C Stockholders (the "Transferring M/C Stockholders"), and except as
otherwise provided in Section 3.1(b) and Section 3.2 of the Second Amended
and Restated November 1998 Stockholders' Agreement, each Principal
Stockholder shall, notwithstanding the provisions of Section 3.1(a) of the
Second Amended and Restated November 1998 Stockholders' Agreement, have the
right to Transfer a percentage of the total number of Securities beneficially
owned by such Principal Stockholder equal to the percentage of the total
number of Securities beneficially owned by the Transferring M/C Stockholders
that the Board of Directors has consented may be Transferred by such
Transferring M/C Stockholders.
(b) In addition to the provisions of Section 3.1(a), for the
period commencing for the quarter ending December 31, 1999 and ending on the
Expiration Date, the Board shall determine prior to the public release of the
Company's consolidated financial results with respect to each such financial
reporting quarter during such period, the aggregate number, if any, of shares
of Class A Common Stock (not to exceed in the aggregate one hundred thousand
(100,000) shares of Class A Common Stock per quarter, subject to adjustment
pursuant to Section 5.1) that may be Transferred by the M/C Stockholders (the
"Transfer Amount") during the period commencing on the third (3rd) business
day and ending on the twenty-third (23rd) business day following such public
release of the Company's quarterly or annual financial results or such other
trading period designated or permitted by the Board with respect to the
purchase and sale of its Securities (each such period, a"Transfer Period").
Notwithstanding the provisions of Section 3.1(a), the M/C Stockholders shall
be entitled to Transfer during each Transfer Period, provided such Transfer
is effected in accordance with all applicable federal and state securities
laws, a number of shares of Class A Common Stock equal to the Transfer
Amount, if any, for such Transfer Period. In no event shall any portion of a
Transfer Amount that is not utilized by the M/C Stockholders during a
Transfer Period be reallocated or otherwise credited to any subsequent
Transfer Periods. Notwithstanding the foregoing provisions of this Section
3.1(b), to the extent that the Company permits the Principal Stockholders the
opportunity to Transfer shares of Class A Common Stock pursuant to Section
3.1(b) of the Second Amended and Restated November 1998 Stockholders'
Agreement during the period commencing on January 1, 2000 and ending on the
Expiration Date, the Company shall grant the M/C Stockholders the opportunity
to Transfer on the same terms and conditions a number of shares of Class A
Common Stock equal to the number of shares which each Principal Stockholder
is entitled to Transfer pursuant to such Section 3.1(b), without considering
those provisions of Section 3.1(b) of the Second Amended and Restated
November 1998 Stockholders' Agreement relating to the reallocation of amounts
among the Principal Stockholders. To the extent the Board determines a
Transfer Amount with respect to the M/C Stockholders for any particular
quarter pursuant to this Section 3.1(b), the Board shall determine an equal
Transfer Amount for such quarter with respect to each Principal Stockholder
pursuant to Section 3.1(b) of the Second Amended and Restated November 1998
Stockholders' Agreement.
(c) For the period commencing for the quarter ending December
31, 1999 and ending on the Expiration Date, the Company shall give the M/C
Stockholders prompt written notice (in any event no later than fifty (50)
days prior to the beginning of the applicable Transfer Period) of its
determination of any Transfer Amount. Within seven (7) days of receipt of
such notice, the M/C Stockholders shall provide written notice to the Company
of the number of shares of Class A Common Stock that the M/C Stockholders
desire to Transfer pursuant to Section 3.1(b).
(d) During the year ending December 31, 1999, to the extent the
Company participates in a strategic transaction with an outside investor(s)
pursuant to which such investor(s) acquires Securities of the Company at a
premium to the then average trading price of the Company's Securities, and
after the Company has been paid or otherwise received its consideration or
proceeds from such transaction as determined by the Company, the Original
Stockholders and the M/C Stockholders may be entitled to participate in such
transaction on a pro rata basis as determined by the Board of Directors.
(e) For purposes of this Section 3.1, the M/C Stockholders
shall be deemed to be a single stockholder of the Company, the McLeods shall
be deemed to be a single Principal Stockholder of the Company, Lumpkin and
all of the CCI Shareholders shall be deemed to be a single Principal
Stockholder of the Company and the AEC Entities shall be deemed to be a
single Principal Stockholder of the Company.
3.2 Registration Rights
(a) In the event that the Board of Directors consents pursuant
to Section 3.1(a) of the Second Amended and Restated November 1998
Stockholders' Agreement to a Principal Stockholder's request for a Transfer
during the period commencing on January 1, 2000 and ending on the Expiration
Date and in connection therewith, the Company agrees to register Securities
with respect to such Transfer under the Securities Act of 1933, as amended
(the "Securities Act"), the Company shall grant the M/C Stockholders the
opportunity (subject to reduction in the event the registered Transfer is
underwritten) to register for Transfer under the Securities Act a percentage
of the total number of Securities beneficially owned by the M/C Stockholders
equal to the percentage of the total number of Securities beneficially owned
by the Transferring Principal Stockholder that such Transferring Principal
Stockholder is registering for Transfer under the Securities Act, on the same
terms and conditions as the Transferring Principal Stockholder. In the event
that the Board of Directors consents pursuant to Section 3.1(a) of this
Agreement to the M/C Stockholders' request for a Transfer, and in connection
therewith the Company agrees to register Securities with respect to such
Transfer under the Securities Act, the Company shall grant each Principal
Stockholder pursuant to Section 3.1(a) of the Second Amended and Restated
November 1998 Stockholders' Agreement the opportunity (subject to reduction
in the event the registered Transfer is underwritten) to register for
Transfer under the Securities Act a percentage of the total number of
Securities beneficially owned by such Principal Stockholder equal to the
percentage of the total number of Securities beneficially owned by the
Transferring M/C Stockholders that such Transferring M/C Stockholders are
registering under the Securities Act, on the same terms and conditions as the
Transferring M/C Stockholders.
(b) To the extent that the Company grants pursuant to Section
3.1(b) of the Second Amended and Restated November 1998 Stockholders'
Agreement a Principal Stockholder the opportunity to register shares of Class
A Common Stock for Transfer under the Securities Act during the period
commencing on January 1, 2000 and ending on the Expiration Date, the Company
shall grant the M/C Stockholders the opportunity (subject to reduction in the
event the registered Transfer is underwritten) to register an equal number of
shares of Class A Common Stock for Transfer under the Securities Act on the
same terms and conditions, without considering those provisions of Section
3.1(b) of the Second Amended and Restated November 1998 Stockholders'
Agreement relating to the reallocation of amounts among the Principal
Stockholders. To the extent that the Company grants pursuant to Section
3.1(b) of this Agreement the M/C Stockholders the opportunity to register
shares of Class A Common Stock for Transfer under the Securities Act, the
Company shall grant each Principal Stockholder pursuant to Section 3.1(b) of
the Second Amended and Restated November 1998 Stockholders' Agreement the
opportunity (subject to reduction in the event the registered Transfer is
underwritten) to register an equal number of shares of Class A Common Stock
for Transfer under the Securities Act on the same terms and conditions.
(c) For the period commencing on January 1, 2000 and ending on
the Expiration Date, in the event the Company proposes to register any shares
of Class A Common Stock under the Securities Act pursuant to an underwritten
primary offering (other than pursuant to a registration statement on Form S-4
or Form S-8 or any successor forms thereto or other form which would not
permit the inclusion of the shares of Class A Common Stock of the M/C
Stockholders), the Company, as determined by the Board of Directors, shall
give written notice to the M/C Stockholders of its intention to effect such a
registration. Following any such notice, the Board of Directors shall
undertake to determine the aggregate number, if any, of shares of Class A
Common Stock held by the M/C Stockholders (not to exceed in the aggregate on
a per year basis a number of shares of Class A Common Stock equal to fifteen
percent (15%) of the total number of shares of Class A Common Stock
beneficially owned by the M/C Stockholders as of the Effective Time (as
defined in the Merger Agreement) in connection with the consummation of the
Merger, subject to appropriate and proportionate adjustment as a result of
the Stock Split and subject to adjustment pursuant to Section 5.1) to be
registered by the Company under the Securities Act (the"Registrable Amount")
for Transfer by the M/C Stockholders in connection with such offering during
such period. If the Board determines to register shares of Class A Common
Stock held by the M/C Stockholders pursuant to this Section 3.2(c), the
Company will promptly give written notice of such determination to the M/C
Stockholders, and thereupon the Company will use commercially reasonable
efforts to effect the registration of that portion of the Registrable Amount
that the M/C Stockholders indicate a desire to register. All terms,
conditions and rights with respect to such registration (including but not
limited to any determination to reduce the Registrable Amount) shall be
determined by the Board, provided that (i) the representations and warranties
of the M/C Stockholders shall be customary taking into account, among other
things, the nature of the offering and the M/C Stockholders' relationship
with the Company, and (ii) the Company shall be responsible for all expenses
with respect to such registration other than underwriting discounts and
commissions allocable to the Class A Common Stock of the M/C Stockholders,
which underwriting discounts and commissions shall be the responsibility of
the M/C Stockholders. Notwithstanding the foregoing provisions of this
Section 3.2(c), to the extent that the Company grants pursuant to Section
3.2(c) of the Second Amended and Restated November 1998 Stockholders'
Agreement the Principal Stockholders the opportunity to register shares of
Class A Common Stock for Transfer under the Securities Act during the period
commencing on January 1, 2000 and ending on the Expiration Date, the Company
shall grant the M/C Stockholders the opportunity to register shares of Class
A Common Stock on a substantially similar basis. To the extent that the
Company grants pursuant to Section 3.2(c) of this Agreement the M/C
Stockholders the opportunity to register shares of Class A Common Stock for
Transfer under the Securities Act, the Company shall grant each Principal
Stockholder pursuant to Section 3.2(c) of the Second Amended and Restated
November 1998 Stockholders' Agreement the opportunity to register shares of
Class A Common Stock on a substantially similar basis.
(d) In addition to the registration rights granted pursuant to
Sections 3.2(a), (b) and (c), no more frequently than once during each of the
calendar years ending December 31, 2000 and 2001 (each such year, an"Annual
Period"), and upon either (i) the receipt of a written request of the M/C
Stockholders or (ii) a determination by the Board of Directors, the Board
shall undertake to determine the Registrable Amount, if any, for Transfer by
the M/C Stockholders. If the Board determines to register shares of Class A
Common Stock held by the M/C Stockholders pursuant to this Section 3.2(d),
the Company will promptly give written notice of such determination to the
M/C Stockholders, and thereupon the Company will use commercially reasonable
efforts to effect the registration of that portion of the Registrable Amount
that the M/C Stockholders indicate a desire to register. All terms,
conditions and rights with respect to such registration (including but not
limited to any determination to reduce the Registrable Amount) shall be
determined by the Board, provided that (i) the representations and warranties
of the M/C Stockholders shall be customary taking into account, among other
things, the nature of the offering and the M/C Stockholders' relationship
with the Company, and (ii) the Company shall be responsible for all expenses
with respect to such registration other than underwriting discounts and
commissions allocable to the Class A Common Stock of the M/C Stockholders,
which underwriting discounts and commissions shall be the responsibility of
the M/C Stockholders. Notwithstanding the foregoing provisions of this
Section 3.2(d), to the extent that the Company grants pursuant to Section
3.2(d) of the Second Amended and Restated November 1998 Stockholders'
Agreement the Principal Stockholders the opportunity to register shares of
Class A Common Stock for Transfer under the Securities Act during the period
commencing on January 1, 2000 and ending on the Expiration Date, the Company
shall grant the M/C Stockholders the opportunity to register shares of Class
A Common Stock on a substantially similar basis. To the extent that the
Company grants pursuant to Section 3.2(d) of this Agreement the M/C
Stockholders the opportunity to register shares of Class A Common Stock for
Transfer under the Securities Act, the Company shall grant each Principal
Stockholder pursuant to Section 3.2(d) of the Second Amended and Restated
November 1998 Stockholders' Agreement the opportunity to register shares of
Class A Common Stock on a substantially similar basis.
(e) For purposes of this Section 3.2, the M/C Stockholders
shall be deemed to be a single stockholder of the Company, the McLeods shall
be deemed to be a single Principal Stockholder of the Company, Lumpkin and
all of the CCI Shareholders shall be deemed to be a single Principal
Stockholder of the Company and the AEC Entities shall be deemed to be a
single Principal Stockholder of the Company.
(f) Notwithstanding any other provision of this Agreement, to
the extent the Company has undertaken to register Securities of the M/C
Stockholders pursuant to this Section 3.2, the Company may subsequently
determine not to register such Securities and may either not file a
registration statement or otherwise withdraw or abandon a registration
statement previously filed with respect to the registration of such
Securities; provided that to the extent the Principal Stockholders are also
participating in such registration, the M/C Stockholders and the Principal
Stockholders will be treated on a substantially similar basis with respect to
any such determination not to register Securities or the withdrawal or
abandonment of a registration statement previously filed as contemplated by
this Section 3.2(f).
4. REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Non-individual Stockholders
Each non-individual party to this Agreement hereby represents and
warrants, as of the date of this Agreement, to the Company and to each other
party as follows:
4.1.1 Authorization
Such party has taken all action necessary for it to enter into
this Agreement and to consummate the transactions contemplated hereby.
4.1.2 Binding Obligation
This Agreement constitutes a valid and binding obligation of such
party, enforceable in accordance with its terms, except to the extent that
such enforceability may be limited by bankruptcy, insolvency, and similar
laws affecting the rights and remedies of creditors generally, and by general
principles of equity and public policy; and each document and instrument to
be executed by such party pursuant hereto, when executed and delivered in
accordance with the provisions hereof, shall be a valid and binding
obligation of such party, enforceable in accordance with its terms (with the
aforesaid exceptions).
4.2 Representations and Warranties of Individual Stockholders
Each party to this Agreement who is an individual hereby
represents and warrants, as of the date of this Agreement, to the Company and
to each other party as follows:
4.2.1 Power and Authority
Such party has the legal capacity and all other power and
authority necessary to enter into this Agreement and to consummate the
transactions contemplated hereby.
4.2.2 Binding Obligation
This Agreement constitutes a valid and binding obligation of such
party, enforceable in accordance with its terms, except to the extent that
such enforceability may be limited by bankruptcy, insolvency, and similar
laws affecting the rights and remedies of creditors generally, and by general
principles of equity and public policy; and each document and instrument to
be executed by such party pursuant hereto, when executed and delivered in
accordance with the provisions hereof, shall be a valid and binding
obligation of such party, enforceable in accordance with its terms (with the
aforesaid exceptions).
4.3 Representations and Warranties of the Company
The Company hereby represents and warrants, as of the date of
this Agreement, to each party as follows:
4.3.1 Authorization
The Company has taken all corporate action necessary for it to
enter into this Agreement and to consummate the transactions contemplated
hereby.
4.3.2 Binding Obligation
This Agreement constitutes a valid and binding obligation of the
Company, enforceable in accordance with its terms, except to the extent that
such enforceability may be limited by bankruptcy, insolvency, and similar
laws affecting the rights and remedies of creditors generally, and by general
principles of equity and public policy; and each document and instrument to
be executed by the Company pursuant hereto, when executed and delivered in
accordance with the provisions hereof, shall be a valid and binding
obligation of the Company, enforceable in accordance with its terms (with the
aforesaid exceptions).
5. MISCELLANEOUS
5.1 Effect of Changes in Capitalization
All share amounts of the Company's capital stock referred to in
this Agreement shall be appropriately and proportionally adjusted for any
recapitalization, reclassification, stock split-up, combination of shares,
exchange of shares, stock dividend or other distribution payable in capital
stock, or other increase or decrease in such shares effected without receipt
of consideration by the Company, occurring after the date of this Agreement.
5.2 Additional Actions and Documents
Each of the parties hereto hereby agrees to take or cause to be
taken such further actions, to execute, deliver and file or cause to be
executed, delivered and filed such further documents and instruments, and to
obtain such consents, as may be necessary or as may be reasonably requested
in order to fully effectuate the purposes, terms and conditions of this
Agreement, whether before, at or after the Effective Date.
5.3 Entire Agreement; Amendment
Other than the Second Amended and Restated November 1998
Stockholders' Agreement with respect to the parties thereto and as set forth
therein, this Agreement constitutes the entire agreement among the parties
hereto as of the date hereof with respect to the specific matters
contemplated herein, and it supersedes all prior oral or written agreements,
commitments or understandings with respect to the matters provided for
herein. No amendment, modification or discharge of this Agreement shall be
valid or binding unless set forth in writing and duly executed by the Company
and by the party against whom enforcement of the amendment, modification or
discharge is sought. Any amendment, modification or discharge of this
Agreement to be enforced against the M/C Stockholders shall be valid and
binding with respect to all M/C Stockholders if such amendment, modification
or discharge is executed by those M/C Stockholders holding a majority of the
shares of Class A Common Stock issued to the M/C Stockholders in the Merger
(including distributions of Securities with respect to such Securities and
Securities acquired as a result of a stock split with respect to such
Securities).
5.4 Limitation on Benefit
It is the explicit intention of the parties hereto that no person
or entity other than the parties hereto is or shall be entitled to bring any
action to enforce any provision of this Agreement against any of the parties
hereto, and the covenants, undertakings and agreements set forth in this
Agreement shall be solely for the benefit of, and shall be enforceable only
by, the parties hereto or their respective successors, heirs, executors,
administrators, legal representatives and permitted assigns.
5.5 Binding Effect; Specific Performance
This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors, heirs,
executors, administrators, legal representatives and permitted assigns. No
party shall assign this Agreement without the written consent of the other
parties hereto; and such consent shall not be unreasonably withheld. The
parties hereto agree that irreparable damage would occur in the event any
provision of this Agreement was not performed in accordance with the terms
hereof and that the parties shall be entitled to specific performance of the
terms hereof, in addition to any other remedy at law or in equity.
5.6 Governing Law
This Agreement, the rights and obligations of the parties hereto,
and any claims or disputes relating thereto, shall be governed by and
construed in accordance with the laws of Delaware (excluding the choice of
law rules thereof).
5.7 Notices
All notices, demands, requests, or other communications which may
be or are required to be given, served, or sent by any party to any other
party pursuant to this Agreement shall be in writing and shall be
hand-delivered or mailed by first-class, registered or certified mail, return
receipt requested, postage prepaid, or transmitted by telegram, telecopy,
facsimile transmission or telex, addressed as follows:
(i) If to the Company or to the McLeods:
McLeodUSA Incorporated
McLeodUSA Technology Park
6400 C Street, SW, P.O. Box 3177
Cedar Rapids, IA 52406-3177
Attention: Randall Rings
Facsimile: (319) 790-7901
(ii) If to the AEC Entities:
IES Investments Inc. (n/k/a Alliant Energy Investments, Inc.)
200 1st Street SE
Cedar Rapids, IA 52401
Attention: James E. Hoffman
Facsimile: (319) 398-4204
(iii) If to Lumpkin or any CCI Shareholder:
P.O. Box 1234
Mattoon, IL 61938
Attention: Richard A. Lumpkin
Facsimile: (217) 234-9934
with a copy to :
Schiff Hardin & Waite
6600 Sears Tower
Chicago, Illinois 60606
Attention: David R. Hodgman, Esq.
Facsimile: (312) 258-5600
(iv) If to the M/C Stockholders:
c/o Media/Communications Partners III
Limited Partnership
75 State Street
Boston, Massachusetts 02109
Attention: James F. Wade
Facsimile: (617) 345-7201
with a copy to:
Edwards & Angell, LLP
101 Federal Street
Boston, MA 02110
Attention: Stephen O. Meredith, Esq.
Facsimile: (617) 439-4170
Each party may designate by notice in writing a new address to
which any notice, demand, request or communication may thereafter be so
given, served or sent. Each notice, demand, request or communication which
shall be hand-delivered, mailed, transmitted, telecopied or telexed in the
manner described above, or which shall be delivered to a telegraph company,
shall be deemed sufficiently given, served, sent, received or delivered for
all purposes at such time as it is delivered to the addressee (with the
return receipt, the delivery receipt, or the answerback being deemed
conclusive, but not exclusive, evidence of such delivery) or at such time as
delivery is refused by the addressee upon presentation.
5.8 Termination
(a) This Agreement shall terminate and be of no further force
or effect as to an Original Stockholder (and not as to the Company and the
M/C Stockholders) at such time as the Second Amended and Restated November
1998 Stockholders' Agreement shall terminate and be of no further force or
effect with respect to such Original Stockholder.
(b) If (i) during any Annual Period the Board of Directors has
not provided the M/C Stockholders a reasonable opportunity to Transfer shares
of Class A Common Stock pursuant to the registration of such shares under the
Securities Act pursuant to Section 3.2 in an aggregate amount equal to not
less than fifteen percent (15%) of the total number of shares of Class A
Common Stock beneficially owned by the M/C Stockholders as of the Effective
Time in connection with the consummation of the Merger, subject to
appropriate and proportionate adjustment as a result of the Stock Split and
subject to adjustment pursuant to Section 5.1 or (ii) after January 1, 2000,
the Second Amended and Restated November 1998 Stockholders' Agreement has
been terminated by all parties thereto, then the M/C Stockholders may
terminate this Agreement by providing written notice of termination to all
other parties (x) in the case of clause (b)(i) above, no later than thirty
(30) days following the end of such Annual Period and (y) in the case of
clause (b)(ii) above, at any time after January 1, 2000, such that all rights
and obligations hereunder shall cease, and this Agreement shall be of no
further force or effect.
(c) Unless otherwise previously terminated by the M/C
Stockholders pursuant to Section 5.8(b), this Agreement shall terminate on
the Expiration Date.
(d) For purposes of this Section 5.8, the M/C Stockholders
shall be deemed to be a single stockholder of the Company, the McLeods shall
be deemed to be a single Original Stockholder of the Company, Lumpkin and all
of the CCI Shareholders shall be deemed to be a single Original Stockholder
of the Company, and the AEC Entities shall be deemed to be a single Original
Stockholder of the Company.
5.9 Publicity
The M/C Stockholders will use their reasonable best efforts to
consult with the Company prior to issuing any press release, making any
filing with any governmental entity or national securities exchange or making
any other public dissemination of information by the M/C Stockholders within
which this Agreement or the contents hereof are referenced or described.
5.10 Appointment of Representative
(a) Each of the M/C Stockholders hereby appoints M/C Partners,
with power of substitution, as its exclusive agent to act on its behalf with
respect to any and all actions to be taken under or amendments or
modifications to be made to this Agreement (the"M/C Representative"). The
M/C Representative shall take, and the M/C Stockholders agree that the M/C
Representative shall take, any and all actions which the M/C Representative
believes are necessary or advisable under this Agreement for and on behalf of
each of the M/C Stockholders, as fully as if each of the M/C Stockholders was
acting on its own behalf, including, without limitation, dealing with the
Company and the other parties hereto with respect to all matters arising
under this Agreement, entering into any amendment or modification to this
Agreement deemed advisable by the M/C Representative and taking any and all
other actions specified in or contemplated by this Agreement. The Company
and the other parties hereto shall have the right to rely upon all actions
taken or not taken by the M/C Representative pursuant to this Agreement, all
of which actions or omissions shall be legally binding upon each of the M/C
Stockholders.
(b) Each of the CCI Shareholders hereby appoints Lumpkin, with
power of substitution, as its exclusive agent to act on its behalf with
respect to any and all actions to be taken under or amendments or
modifications to be made to this Agreement (the"CCI Representative"). The
CCI Representative shall take, and the CCI Shareholders agree that the CCI
Representative shall take, any and all actions which the CCI Representative
believes are necessary or advisable under this Agreement for and on behalf of
each of the CCI Shareholders, as fully as if each of the CCI Shareholders was
acting on its own behalf, including, without limitation, dealing with the
Company and the other parties hereto with respect to all matters arising
under this Agreement, entering into any amendment or modification to this
Agreement deemed advisable by the CCI Representative and taking any and all
other actions specified in or contemplated by this Agreement. The Company
and the other parties hereto shall have the right to rely upon all actions
taken or not taken by the CCI Representative pursuant to this Agreement, all
of which actions or omissions shall be legally binding upon each of the CCI
Shareholders.
5.11 Execution in Counterparts
To facilitate execution, this Agreement may be executed in as
many counterparts as may be required; and it shall not be necessary that the
signatures of, or on behalf of, each party, or that the signatures of all
persons required to bind any party, appear on each counterpart; but it shall
be sufficient that the signature of, or on behalf of, each party, or that the
signatures of the persons required to bind any party, appear on one or more
of the counterparts. All counterparts shall collectively constitute a single
agreement. It shall not be necessary in making proof of this Agreement to
produce or account for more than a number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereto.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the undersigned have duly executed and
delivered this Second Amended and Restated January 1999 Stockholders'
Agreement, or have caused this Second Amended and Restated January 1999
Stockholders' Agreement to be duly executed and delivered on their behalf, as
of the day and year first hereinabove set forth.
MCLEODUSA INCORPORATED
By: /s/ J. Lyle Patrick
--------------------
Name: J. Lyle Patrick
Title: Group Vice President/CFO
/s/ Clark E. McLeod /s/ Mary E. McLeod
------------------- -------------------
Clark E. McLeod Mary E. McLeod
M/C INVESTORS L.L.C.
By: /s/ Peter H.O. Claudy
---------------------
Name: Peter H.O. Claudy
Title: Manager
MEDIA/COMMUNICATIONS PARTNERS III LIMITED PARTNERSHIP
By: M/C III L.L.C., its General Partner
By: /s/ Peter H.O. Claudy
---------------------
Name: Peter H.O. Claudy
Title: Manager
ALLIANT ENERGY CORPORATION, INC.
By: /s/ James E. Hoffman
--------------------
Name: James E. Hoffman
Title: Executive Vice President
Business Development
ALLIANT ENERGY FOUNDATION
By: /s/ Edward M. Gleason
---------------------
Name: Edward M. Gleason
Title: Treasurer
IES INVESTMENTS INC. (n/k/a ALLIANT ENERGY INVESTMENTS, INC.)
By: /s/ James E. Hoffman
--------------------
Name: James E. Hoffman
Title: President, Alliant Energy Resources
HEARTLAND PROPERTIES, INC.
By: /s/ Henry Wertheimer
--------------------
Name: Henry Wertheimer
Title: Vice President/Treasurer
/s/ Richard A. Lumpkin /s/ Gail G. Lumpkin
- ---------------------- --------------------
Richard A. Lumpkin Gail G. Lumpkin
Margaret Lumpkin Keon Trust Mary Lee Sparks Trust
dated May 13, 1978 dated May 13, 1978
/s/ Margaret Lumpkin Keon /s/ Mary Lee Sparks
- ------------------------- --------------------
Margaret Lumpkin Keon, as Trustee Mary Lee Sparks, as Trustee
/s/ Steven L. Grissom
----------------------
Steven L. Grissom, as Trustee
/s/ Mary Lee Sparks
- -------------------
Mary Lee Sparks
The twelve trusts created under the Mary Green The twelve trusts created under the Richard Adamson
Lumpkin Gallo Trust Agreement dated December 29, Lumpkin Grandchildren's Trust dated September 5, 1980,
1989 one for the benefit of each of: one for the benefit of each of:
Joseph John Keon III, Joseph John Keon III,
Katherine Stoddert Keon, Katherine Stoddert Keon,
Lisa Anne Keon, Lisa Anne Keon,
Margaret Lynley Keon, Margaret Lynley Keon,
Pamela Keon Vitale, Pamela Keon Vitale,
Susan Tamara Keon DeWyngaert, Susan Tamara Keon DeWyngaert,
Benjamin Iverson Lumpkin, Benjamin Iverson Lumpkin,
Elizabeth Arabella Lumpkin, Elizabeth Arabella Lumpkin,
Anne Romayne Sparks, Anne Romayne Sparks,
Barbara Lee Sparks, Barbara Lee Sparks,
Christina Louise Sparks, and Christina Louise Sparks, and
John Woodruff Sparks John Woodruff Sparks
Bank One, Texas, N.A., Trustee Bank One, Texas, N.A., Trustee
By: /s/ Frank A. Glispin By: /s/ Frank A. Glispin
-------------------- --------------------
Name: Frank A. Glispin Name: Frank A. Glispin
Title: Relationship Manager Title: Relationship Manager
The three trusts established by Richard The twelve 1990 Personal Income Trusts established
Adamson Lumpkin under Trust Agreement dated by Margaret L. Keon, Mary Lee Sparks, and Richard A.
February 6, 1970, one for the benefit of each of: Lumpkin, each dated April 20, 1990, one for the benefit
of each of:
Richard Anthony Lumpkin, Joseph John Keon III,
Margaret Anne Keon, and Katherine Stoddert Keon,
Mary Lee Sparks Lisa Anne Keon,
Margaret Lynley Keon,
Pamela Keon Vitale,
Bank One, Texas, N.A., Trustee Susan Tamara Keon DeWyngaert,
Benjamin Iverson Lumpkin,
Elizabeth Arabella Lumpkin,
By: /s/ Frank A. Glispin Anne Romayne Sparks,
-------------------- Barbara Lee Sparks,
Name: Frank A. Glispin Christina Louise Sparks, and
Title: Relationship Manager John Woodruff Sparks
/s/ David R. Hodgman
---------------------
David R. Hodgman, Trustee
/s/ Steven L. Grissom
--------------------
Steven L. Grissom, Trustee
SCHEDULE I
Richard A. Lumpkin
Gail G. Lumpkin
Margaret Lumpkin Keon, as Trustee under the Margaret Lumpkin Keon Trust dated
May 13, 1978
Mary Lee Sparks and Steven L. Grissom, as Trustees of the Mary Lee Sparks
Trust dated May 13, 1978
Mary Lee Sparks
Bank One, Texas, N.A., as Trustee of the twelve trusts created under the Mary
Green Lumpkin Gallo Trust Agreement dated December 29, 1989, one for the
benefit of each of Joseph John Keon III, Katherine Stoddert Keon, Lisa Anne
Keon, Margaret Lynley Keon, Pamela Keon Vitale, Susan Tamara Keon DeWyngaert,
Benjamin Iverson Lumpkin, Elizabeth Arabella Lumpkin, Anne Romayne Sparks,
Barbara Lee Sparks, Christina Louise Sparks, and John Woodruff Sparks
Bank One, Texas, N.A., as Trustee of the twelve trusts created under the
Richard Adamson Lumpkin Grandchildren's Trust dated September 5, 1980, one
for the benefit of each of Joseph John Keon III, Katherine Stoddert Keon,
Lisa Anne Keon, Margaret Lynley Keon, Pamela Keon Vitale, Susan Tamara Keon
DeWyngaert, Benjamin Iverson Lumpkin, Elizabeth Arabella Lumpkin, Anne
Romayne Sparks, Barbara Lee Sparks, Christina Louise Sparks, and John
Woodruff Sparks
Bank One, Texas, N.A., as Trustee of the three trusts established by Richard
Adamson Lumpkin under the Trust Agreement dated February 6, 1970, one for the
benefit of each of Richard Anthony Lumpkin, Margaret Anne Keon, and Mary Lee
Sparks
David R. Hodgman and Steven L. Grissom, as Trustees of the twelve 1990
Personal Income Trusts established by Margaret L. Keon, Mary Lee Sparks, and
Richard A. Lumpkin, each dated April 20, 1990, one for the benefit of each of
Joseph John Keon III, Katherine Stoddert Keon, Lisa Anne Keon, Margaret
Lynley Keon, Pamela Keon Vitale, Susan Tamara Keon DeWyngaert, Benjamin
Iverson Lumpkin, Elizabeth Arabella Lumpkin, Anne Romayne Sparks, Barbara Lee
Sparks, Christina Louise Sparks, and John Woodruff Sparks