EXHIBIT 10.3
THIRD AMENDED AND RESTATED
JANUARY 1999 STOCKHOLDERS' AGREEMENT
This Third Amended and Restated January 1999
Stockholders' Agreement (this "Agreement") is entered into as of
March 10, 2000, by and among McLeodUSA Incorporated, a Delaware
corporation (the "Company"); Alliant Energy Corporation, a
Wisconsin corporation ("AEC"); Alliant Energy Investments, Inc.,
an Iowa corporation and indirect wholly owned subsidiary of AEC
("AEI"); Heartland Properties, Inc., a Wisconsin corporation and
indirect wholly owned subsidiary of AEC ("Heartland");
LNT Communications LLC, an Iowa limited liability company and
indirect wholly owned subsidiary of AEC ("LNT"); Alliant Energy
Foundation, Inc., a Wisconsin corporation (non-profit) ("AEF" and
together with AEC, AEI, Heartland and LNT, the "AEC Entities");
Clark E. McLeod ("McLeod"); Mary E. McLeod (together with McLeod,
the "McLeods"); M/C Investors L.L.C., a Delaware limited
liability company ("M/C Investors"); Media/Communications
Partners III Limited Partnership, a Delaware limited partnership
("M/C Partners" and together with M/C Investors, the "M/C
Stockholders"); Richard A. Lumpkin ("Lumpkin") and certain of the
former shareholders of Consolidated Communications Inc. ("CCI")
and certain permitted transferees of certain of the former CCI
shareholders in each case who are listed in Schedule I hereto
(the "Principal CCI Shareholders"); and for purposes of Sections
4, 5.6, 5.8(d), 5.11 and the first sentence of Section 5.3 only,
certain of the other former CCI shareholders and certain
permitted transferees of certain of the other former CCI
shareholders in each case who are listed in Schedule II hereto
(the "Other CCI Shareholders"). The AEC Entities, the McLeods,
Lumpkin and the Principal CCI Shareholders are referred to herein
collectively as the "Original Stockholders" and individually as
an "Original Stockholder."
WHEREAS, the Company, AEC, AEI, Heartland, AEF, the
McLeods, the M/C Stockholders, Lumpkin, the Principal CCI
Shareholders and the Other CCI Shareholders are parties to a
Second Amended and Restated January 1999 Stockholders' Agreement,
entered into as of December 17, 1999 (the "Second Amended and
Restated January 1999 Stockholders' Agreement");
WHEREAS, the Company, AEC, AEI, Heartland, AEF, the
McLeods, the M/C Stockholders, Lumpkin and the Principal CCI
Shareholders desire to add LNT as a party to this Agreement as a
result of the transfer of certain shares of the Company's Class A
common stock, par value $.01 per share (the "Class A Common
Stock"), by an Affiliate (as defined in Section 2.2) of AEC to LNT;
WHEREAS, the Other CCI Shareholders no longer desire
to be parties to this Agreement and the Company, the M/C
Stockholders and the Original Stockholders desire to terminate
the Other CCI Shareholders as parties to this Agreement;
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, the Original Stockholders and the
Other CCI Shareholders are entering into an amendment and
restatement of the Second Amended and Restated November 1998
Stockholders' Agreement, entered into as of December 17, 1999; and
WHEREAS, the Company, the Original Stockholders and the
M/C Stockholders desire to amend and restate the Second 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 two
million five hundred thousand (2,500,000) shares of 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 two million five hundred
thousand (2,500,000) 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 Principal CCI Shareholders collectively beneficially and
continuously own at least two million five hundred thousand
(2,500,000) 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
two million five hundred thousand (2,500,000) 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 two million five hundred
thousand (2,500,000) 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 two million five hundred thousand
(2,500,000) 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 two million five hundred thousand (2,500,000) 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 Principal CCI Shareholders shall be
deemed to be a single Original Stockholder of the Company, and
the Principal CCI Shareholders shall be deemed to own shares
"continuously" as long as the shares of the Principal CCI
Shareholders are owned by the Principal CCI Shareholders or a CCI
Permitted Transferee (as defined in the Third 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 Third 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 Third
Amended and Restated November 1998 Stockholders'
Agreement.
(c) "Effective Date" shall mean March 10, 2000.
(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) "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.
(h) "Third Amended and Restated November 1998
Stockholders' Agreement" shall mean the Third
Amended and Restated November 1998 Stockholders'
Agreement, entered into as of March 10, 2000 by
and among the Company, the Original Stockholders
and the Other CCI Shareholders.
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 Third
Amended and Restated November 1998 Stockholders' Agreement)
pursuant to Section 3.1(a) of the Third Amended and Restated
November 1998 Stockholders' Agreement upon the written request of
such Principal Stockholder (the "Transferring Principal
Stockholder") 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 Third Amended and Restated November 1998 Stockholders'
Agreement, each Principal Stockholder shall, notwithstanding the
provisions of Section 3.1(a) of the Third 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 March 31, 2000
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 Third
Amended and Restated November 1998 Stockholders' Agreement, 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 Third 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 Third Amended and Restated November 1998
Stockholders' Agreement.
(c) For the period commencing for the quarter ending
March 31, 2000 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) 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 Principal 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 Third Amended and Restated
November 1998 Stockholders' Agreement to a Principal
Stockholder's request for a Transfer 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 Third 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 Third 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, 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 Third 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 Third 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) 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 Third
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, 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 Third
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 Third
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, 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 Third
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 Principal 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 Third 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:
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 Principal 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, IL 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, MA 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
Third 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) the Third 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 the Company and the
Original Stockholders (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
following such termination, 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) This Agreement is hereby terminated with respect
to each of the Other CCI Shareholders, such that all rights and
obligations hereunder shall cease, and this Agreement shall be of
no further force or effect, with respect to each of the Other CCI
Shareholders.
(e) 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 Principal 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 Principal 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 Principal 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 Principal CCI
Shareholders, as fully as if each of the Principal 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 Principal
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 Third Amended and Restated January 1999
Stockholders' Agreement, or have caused this Third 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
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
LNT COMMUNICATIONS LLC
By: Alliant Energy Resources, Inc., its sole member
By: /s/ James E. Hoffman
--------------------------------
Name: James E. Hoffman
Title: President
/s/ Richard A. Lumpkin /s/ Gail G. Lumpkin
- ---------------------- ----------------------
Richard A. Lumpkin Gail G. Lumpkin
The two trusts created under the Mary Green Lumpkin Gallo Trust
Agreement dated December 29, 1989, one for the benefit of each
of:
Benjamin Iverson Lumpkin
Elizabeth Arabella Lumpkin
United States Trust Company
of New York, Trustee
By: /s/ Loraine B. Tsavaris
----------------------------------
Name: Loraine B. Tsavaris
Title: Managing Director
The trust established by Richard Adamson Lumpkin under the Trust
Agreement dated February 6, 1970, for the benefit of Richard
Anthony Lumpkin.
United States Trust Company
of New York, Trustee
By: /s/ Loraine B. Tsavaris
----------------------------------
Name: Loraine B. Tsavaris
Title: Managing Director
The two trusts created under the Richard Adamson Lumpkin
Grandchildren's Trust dated September 5, 1980, one for the
benefit of each of:
Benjamin Iverson Lumpkin
Elizabeth Arabella Lumpkin
United States Trust Company
of New York, Trustee
By: /s/ Loraine B. Tsavaris
----------------------------
Name: Loraine B. Tsavaris
Title: Managing Director
The two 1990 Personal Income Trusts established by Richard A.
Lumpkin, dated April 20, 1990, one for the benefit of each of:
Benjamin Iverson Lumpkin
Elizabeth Arabella Lumpkin
/s/ David R. Hodgman
- --------------------
David R. Hodgman, Trustee
/s/ Steven L. Grissom
- ---------------------
Steven L. Grissom, Trustee
FOR PURPOSES OF SECTIONS 4, 5.6, 5.8(d), 5.11 AND THE FIRST
SENTENCE OF SECTION 5.3 ONLY:
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 ten 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,
Anne Romayne Sparks,
Barbara Lee Sparks,
Christina Louise Sparks, and
John Woodruff Sparks
United States Trust Company
of New York, Trustee
By: /s/ Loraine B. Tsavaris
----------------------------
Name: Loraine B. Tsavaris
Title: Managing Director
The ten 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,
Anne Romayne Sparks,
Barbara Lee Sparks,
Christina Louise Sparks, and
John Woodruff Sparks
United States Trust Company of
New York, Trustee
By: /s/ Loraine B. Tsavaris
----------------------------
Name: Loraine B. Tsavaris
Title: Managing Director
The two trusts established by Richard Adamson Lumpkin under the
Trust Agreement dated February 6, 1970, one for the benefit of
each of:
Margaret Anne Keon, and
Mary Lee Sparks
United States Trust Company
of New York, Trustee
By: /s/ Loraine B. Tsavaris
----------------------------
Name: Loraine B. Tsavaris
Title: Managing Director
The ten 1990 Personal Income Trusts established by Margaret L.
Keon and Mary Lee Sparks, 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,
Anne Romayne Sparks,
Barbara Lee Sparks,
Christina Louise Sparks, and
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
United States Trust Company of New York, as Trustee of two trusts
created under the Mary Green Lumpkin Gallo Trust Agreement dated
December 29, 1989, one for the benefit of each of Benjamin
Iverson Lumpkin and Elizabeth Arabella Lumpkin.
United States Trust Company of New York, as Trustee of two trusts
created under the Richard Adamson Lumpkin Grandchildren's Trust
dated September 5, 1980, one for the benefit of each of Benjamin
Iverson Lumpkin and Elizabeth Arabella Lumpkin.
United States Trust Company of New York, as Trustee of the trust
established by Richard Adamson Lumpkin under the Trust Agreement
dated February 6, 1970, for the benefit of Richard Anthony
Lumpkin.
David R. Hodgman and Steven L. Grissom, as Trustees of two 1990
Personal Income Trusts established by Richard A. Lumpkin, each
dated April 20, 1990, one for the benefit of each of Benjamin
Iverson Lumpkin and Elizabeth Arabella Lumpkin.
SCHEDULE II
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
United States Trust Company of New York, as Trustee of ten 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,
Anne Romayne Sparks, Barbara Lee Sparks, Christina Louise Sparks,
and John Woodruff Sparks.
United States Trust Company of New York, as Trustee of ten 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,
Anne Romayne Sparks, Barbara Lee Sparks, Christina Louise Sparks,
and John Woodruff Sparks.
United States Trust Company of New York, as Trustee of two trusts
established by Richard Adamson Lumpkin under the Trust Agreement
dated February 6, 1970, one for the benefit of each of Margaret
Anne Keon and Mary Lee Sparks.
David R. Hodgman and Steven L. Grissom, as Trustees of ten 1990
Personal Income Trusts established by Margaret L. Keon and Mary
Lee Sparks, 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, Anne Romayne Sparks, Barbara Lee Sparks, Christina
Louise Sparks, and John Woodruff Sparks.