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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): SEPTEMBER 2, 1998
MCLEODUSA INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 0-20763 42-1407240
(STATE OR OTHER (COMMISSION (IRS EMPLOYER
JURISDICTION FILE NUMBER) IDENTIFICATION NUMBER)
OF INCORPORATION)
MCLEODUSA TECHNOLOGY PARK
6400 C STREET, S.W., P.O. BOX 3177, CEDAR RAPIDS, IA 52406-3177
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (319) 364-0000
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INFORMATION TO BE INCLUDED IN THE REPORT
ITEM 5. OTHER EVENTS
PROPOSED PRIVATE DEBT OFFERING
Before the opening of The Nasdaq Stock Market, Inc.'s National Market System
("Nasdaq NMS") on the morning of October 22, 1998, the Company issued a press
release announcing that it plans to raise approximately $200 million in a
proposed private offering of senior notes due 2008 (i) to "qualified
institutional buyers"(as defined in Rule 144A under the Securities Act of
1933) and (ii) pursuant to offers and sales that occur outside the United
States in accordance with Regulation S under the Securities Act of 1933.
Enclosed as Exhibit 99.1 to this Current Report on Form 8-K, and incorporated
by reference herein, is the text of the press release issued by the Company on
the morning of October 22, 1998.
After the close of the Nasdaq NMS on October 22, 1998, the Company issued a
second press release to announce an increase in the amount of debt it plans to
raise from $200 million to approximately $300 million in its proposed private
offering of 9.500% senior notes due November 1, 2008. Enclosed as Exhibit 99.2
to this Current Report on Form 8-K, and incorporated by reference herein, is
the text of the press release issued by the Company on the evening of
October 22, 1998.
AGREEMENT TO ACQUIRE DAKOTA TELECOMMUNICATIONS GROUP, INC.
On October 27, 1998, the Company entered into an Agreement and Plan of
Merger (the "Merger Agreement") with Dakota Telecommunications Group, Inc., a
Delaware corporation ("DTG"), pursuant to which a newly formed wholly owned
subsidiary of the Company will be merged with and into DTG (the "Merger"). As
a result of the Merger, each share of DTG's common stock will be converted
into the right to receive 0.4328 of a share of the Company's Class A common
stock (the "Exchange Ratio"). The maximum number of shares of the Company's
Class A common stock issuable pursuant to the Merger (assuming the exercise of
all outstanding options to purchase DTG common stock) is expected to be
approximately 1,295,000. In addition, under the terms of the Merger Agreement,
each option to purchase DTG common stock will become or be replaced by an
option to purchase a number of shares of the Company's Class A common stock
equal to the number of shares of DTG common stock that could have been
purchased (assuming full vesting) under the DTG stock option multiplied by the
Exchange Ratio. The Company has agreed to register under the Securities Act of
1933 the shares of its Class A common stock to be issued in the Merger.
Consummation of the Merger is subject to the satisfaction of certain
conditions, including (i) approval of the Merger Agreement and the Merger by
the stockholders of DTG, (ii) effectiveness of the registration statement
registering the shares of the Company's Class A common stock to be issued in
the Merger, (iii) compliance with all applicable provisions of the Hart-Scott-
Rodino Antitrust Improvements Act of 1976 and the expiration of all applicable
waiting periods thereunder, (iv) receipt of required regulatory approvals and
(v) certain other customary conditions. Each director and certain executive
officers of DTG have entered into Voting Agreements pursuant to which, among
other things, they have agreed to vote their shares of DTG common stock in
favor of the Merger at a meeting of the stockholders of DTG.
Enclosed as Exhibit 99.3 to this Current Report on Form 8-K, and
incorporated by reference herein, is the text of the October 27, 1998 Press
Release.
EXECUTIVE REALIGNMENT
On September 2, 1998, the Company issued a press release announcing an
executive realignment involving five executives of the Company. The Company
has segmented its ten-state geographical service area into four regions and
appointed a Regional President for each region. In addition, the Company
appointed a new Group Vice President of Finance and Chief Financial Officer.
Enclosed as Exhibit 99.4 to this Current Report on Form 8-K, and incorporated
by reference herein, is the text of the September 2, 1998 Press Release.
* * * * *
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Certain statements contained in this Current Report on Form 8-K are forward-
looking statements that involve risks and uncertainties, including, but not
limited to revision of expansion plans, availability of financing and
regulatory approvals, the number of potential customers in a target market,
the existence of strategic alliances or relationships, technological,
regulatory or other developments in the Company's business, changes in the
competitive climate in which the Company operates and the emergence of future
opportunities, all of which could cause actual results and experiences of
McLeodUSA Incorporated to differ materially from anticipated results and
expectations expressed in the forward-looking statements contained herein.
These and other applicable risks are summarized under the caption "Business-
Risk Factors" and elsewhere in the Company's Annual Report on Form 10-K for
its fiscal year ended December 31, 1997, which is filed with the Securities
and Exchange Commission.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits.
99.1 Press Release, dated October 22, 1998, announcing the Company's intent to
raise up to $200 million in a proposed private debt offering of senior
notes due 2008.
99.2 Press Release, dated October 22, 1998, announcing the Company's intent to
raise up to $300 million in a proposed private debt offering of senior
notes due 2008.
99.3 Press Release, dated October 27, 1998, announcing the Company's execution
of a definitive agreement to acquire Dakota Telecommunications Group,
Inc., a South Dakota based telecommunications firm.
99.4 Press Release, dated September 2, 1998, announcing the Company's
executive realignment.
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SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED HEREUNTO DULY AUTHORIZED.
McLeodUSA Incorporated
Date: October 29, 1998
/s/ Randall Rings
By: _________________________________
RANDALL RINGS
VICE PRESIDENT, SECRETARY AND
GENERAL COUNSEL
EXHIBIT INDEX
PAGE NUMBER
IN SEQUENTIAL
EXHIBIT NUMBER EXHIBIT NUMBERING SYSTEM
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99.1 Press Release, dated October 22, 1998,
announcing the Company's intent to raise up
to $200 million in a proposed private debt
offering of senior notes due 2008.
99.2 Press Release, dated October 22, 1998,
announcing the Company's intent to raise up
to $300 million in a proposed private debt
offering of senior notes due 2008.
99.3 Press Release, dated October 27, 1998,
announcing the Company's execution of a
definitive agreement to acquire Dakota
Telecommunications Group, Inc., a South
Dakota based telecommunications firm.
99.4 Press Release, dated September 2, 1998,
announcing the Company's executive
realignment.