EXHIBIT 10.47
STOCKHOLDERS' AGREEMENT
This Stockholders' Agreement (this "Agreement") is entered into as of
November 18, 1998, by and among McLeodUSA Incorporated, a Delaware corporation
(the "Company"); IES Investments Inc., an Iowa corporation ("IES"); Clark E.
McLeod ("McLeod"); Mary E. McLeod (together with McLeod, the "McLeods"); and
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"). IES, the McLeods, Lumpkin and the CCI Shareholders are
referred to herein collectively as the "Principal Stockholders" and individually
as a "Principal Stockholder."
WHEREAS, the Company, the Principal Stockholders and certain other
stockholders are parties to a Stockholders' Agreement entered into as of June
14, 1997, as amended on September 19, 1997 (the "Original Stockholders'
Agreement");
WHEREAS, Section 3 of the Original Stockholders' Agreement has expired in
accordance with its terms and certain other provisions thereof will expire in
accordance with their terms; and
WHEREAS, the Company and the Principal Stockholders deem it to be in the
best interests of the Company and its stockholders to enter into a new agreement
to continue to provide for the continuity and stability of the business and
policies of the Company on 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. VOTING AGREEMENT
1.1 Board of Directors
For the period commencing on the Voting Agreement Effective Date (as
defined in Section 1.2) and ending on the Expiration Date (as defined in Section
1.2), each Principal Stockholder, for so long as such Principal Stockholder
beneficially and continuously owns at least four million (4,000,000) 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 eleven (11) directors;
(b) to cause to be elected to the Board one (1) director
designated by IES, for so long as IES beneficially and
continuously owns at least four million (4,000,000) shares
of the 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 four million (4,000,000)
shares of the 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 four million (4,000,000) shares
of the Class A Common Stock (subject to adjustment pursuant
to Section 5.1);
(e) 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 (d) 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 (d) above no
longer beneficially owning at least four million
(4,000,000) shares
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of the Class A Common Stock (subject to adjustment pursuant
to Section 5.1) at any time during the period commencing on
the Voting Agreement Effective Date and ending on the
Expiration Date; it being understood that within three (3)
business days following such time as the party or parties
identified in paragraphs (b) through (d) above no longer
beneficially and continuously own at least four million
(4,000,000) shares of the 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
(f) to cause to be elected to the Board, if and as nominated by
the Board, up to six (6) non-employee directors;
provided, however, notwithstanding any other provision of this Agreement, if any
Principal Stockholder hereto would not be entitled to have a director elected to
the Board with respect to such Principal Stockholder under the Original
Stockholders' Agreement but would be entitled to have a director elected to the
Board with respect to such Principal Stockholder pursuant to Section 1.1 of this
Agreement except that the Voting Agreement Effective Date hereunder has not
occurred, then this Agreement shall be applied with respect to the election of
the director of such Principal Stockholder as if the Voting Agreement Effective
Date has occurred and each party hereto shall act under this Agreement to cause
the election of the director of such Principal Stockholder.
The parties hereto agree that Section 1.1 and Section 1.2 of the Original
Stockholders' Agreement shall terminate and be of no force or effect with
respect to the rights and obligations of the parties hereto amongst each other
as of the Voting Agreement Effective Date. For purposes of Section 1.1, Lumpkin
and all of the CCI Shareholders shall be deemed to be a single Principal
Stockholder, and a CCI Shareholder shall be deemed to own shares "continuously"
as long as the shares of such CCI Shareholder are owned by such CCI Shareholder
or by a CCI Permitted Transferee (as defined in Section 3.1).
1.2 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:
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(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
Original Stockholders' Agreement.
(c) "Expiration Date" shall mean December 31, 2001.
(d) "Voting Agreement Effective Date" shall mean the date which
falls on the earliest to occur of (i) the termination of the
Original Stockholders' Agreement, (ii) the expiration of Section
1.1 of the Original Stockholders' Agreement in accordance with its
terms and (iii) MWR Investments Inc. ("MWR") no longer being
entitled to have a director designated by MWR elected to the Board
in accordance with the terms and conditions of Section 1.1 of the
Original Stockholders' Agreement.
2. STANDSTILL
IES hereby agrees that, prior to the Expiration Date, neither IES nor any
Affiliate of IES will (and IES will not assist or encourage others to), directly
or
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indirectly, acquire or agree, offer, seek or propose to acquire, or cause to be
acquired, ownership (including, but not limited to, beneficial ownership) of any
securities issued by the Company or any of its subsidiaries, or any rights or
options to acquire such ownership (including from a third party), except (a) to
the extent expressly set forth in this Agreement, (b) as consented prior thereto
in writing by the Board of Directors, (c) upon conversion of any Class B common
stock, $.01 par value per share, of the Company into Class A Common Stock
pursuant to the terms thereof, (d) with respect to transfers of equity
securities between or among IES and IES's wholly owned subsidiaries, parent
corporation, or other wholly owned subsidiaries of such parent corporation, or
(e) with respect to the grant, vesting or exercise of stock options.
3. TRANSFERS OF SECURITIES
3.1 Restrictions on Transfers
(a) Except as otherwise provided in this Section 3.1 or Section 3.2, each
Principal Stockholder hereby severally agrees that until the Expiration Date,
such Principal Stockholder 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 Principal Stockholder without submitting a written
request to, and receiving the prior written consent of, the Board of Directors,
provided, however, that any CCI Shareholder may transfer Securities to any other
CCI Shareholder, the spouse of a CCI Shareholder, or a lineal descendant of a
CCI Shareholder (or a trust for the primary benefit of any one or more of a CCI
Shareholder, the spouse of a CCI Shareholder, or a lineal descendant of a CCI
Shareholder or a partnership or limited liability company owned and managed
solely by one or more CCI Shareholders, spouses of CCI Shareholders and lineal
descendants of CCI Shareholders), or, in the case of a CCI Shareholder that is a
trust, to any beneficiary of such trust (or a trust for the primary benefit of
such beneficiary or a partnership or limited liability company owned and managed
solely by one or more CCI Shareholders, spouses of CCI Shareholders and lineal
descendants of CCI Shareholders), 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 a Principal Stockholder with respect
to the shares being transferred pursuant to this Section, and any such transfer
shall not constitute a "Transfer" for purposes of this Agreement (any such CCI
transferee pursuant to this proviso, a "CCI Permitted Transferee"). In the event
that the Board of Directors consents to any Transfer of Securities by a
Principal Stockholder pursuant to the written request of such Principal
Stockholder (a "Transferring Stockholder") and except as otherwise provided in
Section 3.1(b) and Section 3.2, each other Principal Stockholder shall,
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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
such Principal Stockholder equal to the percentage of the total number of
Securities beneficially owned by the Transferring Stockholder that the Board of
Directors has consented may be Transferred by such Transferring Stockholder. The
parties acknowledge that any Transfer pursuant to this Section 3.1(a) to which
the Board of Directors has consented may be in connection with, or as part of, a
private placement by the Company of, or other transaction involving, its
Securities.
(b) In addition to the provisions of Section 3.1(a), commencing for the
quarter ending December 31, 1998 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 the end of each financial reporting quarter,
the aggregate number, if any, of shares of Class A Common Stock (not to exceed
in the aggregate one hundred fifty thousand (150,000) shares of Class A Common
Stock per quarter, subject to adjustment pursuant to Section 5.1) that may be
Transferred by the Principal 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),
each Principal Stockholder 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 thirty-three and one-third percent (33 1/3%) of the Transfer Amount, if
any, for such Transfer Period (rounding down in the case of any fractional
amount). Any portion of any Principal Stockholder's share of the Transfer Amount
that such Principal Stockholder elects not to transfer during a Transfer Period
shall be reallocated equally among the remaining Principal Stockholders who
intend to Transfer shares of Class A Common Stock during such Transfer Period,
and such remaining Principal Stockholders shall be entitled to Transfer such
additional shares of Class A Common Stock during the Transfer Period, provided
such Transfer is effected in accordance with all applicable federal and state
securities laws. In no event shall any portion of a Transfer Amount that is not
utilized by a Principal Stockholder during a Transfer Period be reallocated or
otherwise credited to any subsequent Transfer Periods. The parties acknowledge
that the Company has determined that the Transfer Amount that may be Transferred
by the Principal Stockholders during the Transfer Period for the quarter ended
September 30, 1998 pursuant to this Section 3.1(b) shall be an aggregate of one
hundred fifty thousand (150,000) shares of Class A Common Stock.
(c) Commencing for the quarter ending December 31, 1998 and ending on the
Expiration Date, the Company shall give each Principal Stockholder prompt
written notice (in any event no later than fifty (50) days prior to the
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beginning of the applicable Transfer Period) of its determination of any
Transfer Amount. Within seven (7) days of receipt of such notice, any Principal
Stockholder that desires to Transfer shares of Class A Common Stock during such
Transfer Period pursuant to Section 3.1(b) shall provide written notice to the
Company of the number of shares such Principal Stockholder desires to Transfer.
Not later than seven (7) days after receipt of such responses, the Company shall
notify all remaining Principal Stockholders of any Principal Stockholder's
election not to Transfer the total number of shares of Class A Common Stock that
such Principal Stockholder is entitled to Transfer during such Transfer Period.
Any Principal Stockholder that desires to Transfer additional shares of Class A
Common Stock equal to all or part of the remaining Transfer Amount shall notify
the Company within seven (7) days of receipt of the Company's second notice. The
Company shall allocate the remaining Transfer Amount in accordance with the
provisions of Section 3.1(b) and shall notify the appropriate Principal
Stockholders of such allocation no later than ten (10) days prior to the
beginning of the Transfer Period.
(d) For purposes of this Section 3.1, Lumpkin and all of the CCI
Shareholders shall be deemed to be a single Principal Stockholder.
3.2 Registration Rights
(a) In the event that the Board of Directors consents pursuant to Section
3.1(a) 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 each other Principal Stockholder 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 Stockholder that such Transferring Stockholder is registering for
Transfer under the Securities Act, on the same terms and conditions as the
Transferring Stockholder (each Principal Stockholder registering, or indicating
a desire to register, any Securities for Transfer under the Securities Act
pursuant to this Section 3.2 being a "Registering Transferor").
(b) To the extent that the Company grants pursuant to Section 3.1(b) a
Principal Stockholder the opportunity to register shares of Class A Common Stock
for Transfer under the Securities Act, the Company shall grant each other
Principal Stockholder 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
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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 Principal Stockholders),
the Company, as determined by the Board of Directors, shall give written notice
to all Principal 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
Principal 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
Principal Stockholders as of December 31, 1998, 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 Principal Stockholders in connection
with such offering. If the Board determines to register shares of Class A Common
Stock held by the Principal Stockholders pursuant to this Section 3.2(c), the
Company will promptly give written notice of such determination to all Principal
Stockholders, and thereupon the Company will use commercially reasonable efforts
to effect the registration of that portion of the Registrable Amount that the
Registering Transferors indicate a desire to register. In the event the
Registering Transferors indicate a desire to register a number of shares of
Class A Common Stock that, in the aggregate, exceeds the Registrable Amount, the
number of shares of Class A Common Stock that each Registering Transferor shall
be entitled to register shall be reduced to the extent such number exceeds such
Registering Transferor's pro rata share of the Registrable Amount based upon the
ratio of the total number of Securities beneficially owned by such Registering
Transferor to the total number of Securities beneficially owned by all Principal
Shareholders. To the extent any portion of the Registrable Amount remains
unallocated after such reductions, each Registering Transferor who has indicated
a desire to register additional shares of Class A Common Stock shall be entitled
to register an additional amount of Class A Common Stock equal to such
Registering Transferor's pro rata portion of the remaining Registrable Amount
based upon the ratio of the total number of Securities beneficially owned by
such Registering Transferor to the total number of Securities beneficially owned
by all Registering Transferors who have indicated a desire to register
additional shares of Class A Common Stock. The reallocation procedure described
in the preceding sentence shall be repeated until the entire Registrable Amount
is allocated. 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 a Principal Stockholder shall be customary taking into
account, among other things, the nature of the offering and such Principal
Stockholder's 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 Registering Transferors, which underwriting discounts and commissions shall
be the responsibility of the Registering Transferors.
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(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, 1999, 2000 and 2001 (each such year, an "Annual
Period"), and upon either (i) the receipt of a written request of one or more
Principal 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 Principal Stockholders. If the Board determines to register shares of
Class A Common Stock held by the Principal Stockholders pursuant to this Section
3.2(d), the Company will promptly give written notice of such determination to
all Principal Stockholders, and thereupon the Company will use commercially
reasonable efforts to effect the registration of that portion of the Registrable
Amount that the Registering Transferors indicate a desire to register. In the
event the Registering Transferors indicate a desire to register a number of
shares of Class A Common Stock that, in the aggregate, exceeds the Registrable
Amount, the number of shares of Class A Common Stock that each Registering
Transferor shall be entitled to register shall be reduced to the extent such
number exceeds such Registering Transferor's pro rata share of the Registrable
Amount based upon the ratio of the total number of Securities beneficially owned
by such Registering Transferor to the total number of Securities beneficially
owned by all Principal Stockholders. To the extent any portion of the
Registrable Amount remains unallocated after such reductions, each Registering
Transferor who has indicated a desire to register additional shares of Class A
Common Stock shall be entitled to register an additional amount of Class A
Common Stock equal to such Registering Transferor's pro rata portion of the
remaining Registrable Amount based upon the ratio of the total number of
Securities beneficially owned by such Registering Transferor to the total number
of Securities beneficially owned by all Registering Transferors who have
indicated a desire to register additional shares of Class A Common Stock. The
reallocation procedure described in the preceding sentence shall be repeated
until the entire Registrable Amount is allocated. 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 a Principal
Stockholder shall be customary taking into account, among other things, the
nature of the offering and such Principal Stockholder's 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, which
underwriting discounts and commissions shall be the responsibility of the
Registering Transferors.
(e) If the Board establishes a committee (a "Pricing Committee") to
authorize and approve the price and any other terms of any Transfer of
Securities registered under the Securities Act pursuant to this Section 3.2 in
which Lumpkin or any CCI Shareholder is participating as a Registering
Transferor, the Company will use its best efforts to cause Lumpkin to be
nominated to such Pricing
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Committee. Notwithstanding any other provision of this Agreement, to the extent
the Company has undertaken to register Securities of the Principal 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.
(f) For purposes of this Section 3.2, Lumpkin and all of the CCI
Shareholders shall be deemed to be a single Principal Stockholder.
4. REPRESENTATIONS AND WARRANTIES
4.1 Representations and Warranties of Non-individual Stockholders
Each non-individual Principal Stockholder hereby represents and warrants,
as of the date of this Agreement, to the Company and to each other Principal
Stockholder as follows:
4.1.1 Authorization
Such Principal Stockholder 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
Principal Stockholder, 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 Principal Stockholder pursuant hereto, when executed and
delivered in accordance with the provisions hereof, shall be a valid and binding
obligation of such Principal Stockholder, enforceable in accordance with its
terms (with the aforesaid exceptions).
4.2 Representations and Warranties of Individual Stockholders
Each Principal Stockholder who is an individual hereby represents and
warrants, as of the date of this Agreement, to the Company and to each other
Principal Stockholder as follows:
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4.2.1 Power and Authority
Such Principal Stockholder has the legal capacity and all other necessary
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
Principal Stockholder, 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 Principal Stockholder pursuant hereto, when executed and
delivered in accordance with the provisions hereof, shall be a valid and binding
obligation of such Principal Stockholder, 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 Principal Stockholder 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
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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 time of this Agreement.
5.3 Entire Agreement; Amendment
This Agreement constitutes the entire agreement among the parties hereto
as of the date hereof with respect to the matters contemplated herein, except
with respect to Sections 1.1, 1.2.1, 1.2.2, 1.2.3 and to the extent applicable
Section 1.2.4 of the Original Stockholders' Agreement which Sections shall be
superseded on the terms contemplated hereby with respect to the rights and
obligations of the parties hereto amongst each other as of the Voting Agreement
Effective Date. No amendment, modification or discharge of this Agreement shall
be valid or binding unless set forth in writing and duly executed by the party
against whom enforcement of the amendment, modification, or discharge is sought.
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
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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) 298-7901
(ii) If to IES:
IES 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
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with a copy to :
Schiff Hardin & Waite
6600 Sears Tower
Chicago, Illinois 60606
Attention: David R. Hodgman, Esq.
Facsimile: (312) 258-5600
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
Notwithstanding any other provision of this Agreement, if during any
Annual Period the Board of Directors has not provided a Principal Stockholder a
reasonable opportunity to Transfer Securities pursuant to Section 3.2 or
consented to the written request of such Principal Stockholder or otherwise
provided such Principal Stockholder a reasonable opportunity to Transfer (other
than a transfer by a CCI Shareholder to a CCI Permitted Transferee) pursuant to
Section 3.1(a) an aggregate number of shares of Class A Common Stock equal to
not less than fifteen percent (15%) of the total number of shares of Class A
Common Stock beneficially owned by such Principal Stockholder as of December 31,
1998, subject to adjustment pursuant to Section 5.1, then such Principal
Stockholder may terminate this Agreement as it applies to such terminating party
by providing written notice of termination to all other parties no later than
ten (10) business days following the end of such Annual Period, such that all
rights and obligations hereunder shall cease, and this Agreement shall be of no
further force or effect, with respect to the terminating party. Unless otherwise
previously terminated by the Principal Stockholders pursuant to this Section
5.8, this Agreement shall terminate on the Expiration Date. For purposes of this
Section 5.8, Lumpkin and all of the CCI Shareholders shall be deemed to be a
single Principal Stockholder.
5.9 Publicity
Each of the Principal Stockholders will use its reasonable best efforts
to consult with the Company prior to issuing any press release, making any
filing
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with any governmental entity or national securities exchange or making any other
public dissemination of information by such Principal Stockholder within which
this Agreement or the contents hereof are referenced or described.
5.10 Appointment of Representative
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 "Representative"). The Representative shall take, and the
CCI Shareholders agree that the Representative shall take, any and all actions
which the 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 were 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 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 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.
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IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Agreement, or have caused this Agreement to be duly executed and delivered on
their behalf, as of the day and year first hereinabove set forth.
MCLEODUSA INCORPORATED IES INVESTMENTS INC.
By: /s/ J. Lyle Patrick By: /s/ James E. Hoffman
Name: J. Lyle Patrick Name: James E. Hoffman
Title: Group Vice President, Title: President
Chief Financial Officer and
Treasurer
/s/ Clark E. McLeod /s/ Mary E. McLeod
Clark E. McLeod Mary E. McLeod
/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/ Steve L. Grissom
Steven L. Grissom, as Trustee
/s/ Mary Lee Sparks
Mary Lee Sparks
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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., Trustee
/s/ Frank A. Glispin
By: Frank A. Glispin, Vice President
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., Trustee
/s/ Frank A. Glispin
By: Frank A. Glispin, Vice President
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The three trusts established by Richard Adamson Lumpkin under Trust Agreement
dated February 6, 1970, one for the benefit of each of:
Richard Anthony Lumpkin,
Margaret Anne Keon, and
Mary Lee Sparks
Bank One, Texas, N.A., Trustee
/s/ Frank A. Glispin
By: Frank A. Glispin, Vice President
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
/s/ David R. Hodgman
David R. Hodgman, Trustee
/s/ Steve L. Grissom
Steven L. Grissom, Trustee
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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
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
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