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EXHIBIT 10.52
MCLEOD, INC.
AMENDED AND RESTATED
DIRECTORS STOCK OPTION PLAN
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TABLE OF CONTENTS
PAGE
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1. PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . 3
4. STOCK SUBJECT TO THE PLAN . . . . . . . . . . . . . . . . . . . 3
5. ELIGIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . 5
6. OPTION PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . 5
7. NUMBER OF SHARES AND GRANT DATES . . . . . . . . . . . . . . . . 5
8. VESTING OF OPTIONS . . . . . . . . . . . . . . . . . . . . . . . 5
9. OPTION PERIOD . . . . . . . . . . . . . . . . . . . . . . . . . 6
10. TIMING AND METHOD OF EXERCISE . . . . . . . . . . . . . . . . . 6
11. SERVICE TERMINATION . . . . . . . . . . . . . . . . . . . . . . 7
12. RIGHTS IN THE EVENT OF DEATH OR DISABILITY . . . . . . . . . . 7
13. NO STOCKHOLDER RIGHTS UNDER OPTION . . . . . . . . . . . . . . 8
14. CONTINUATION OF SERVICE . . . . . . . . . . . . . . . . . . . . 8
15. STOCK OPTION AGREEMENT . . . . . . . . . . . . . . . . . . . . 8
16. WITHHOLDING . . . . . . . . . . . . . . . . . . . . . . . . . . 8
17. NON-TRANSFERABILITY OF OPTIONS . . . . . . . . . . . . . . . . 8
18. USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . 9
19. ADOPTION, AMENDMENT, SUSPENSION AND TERMINATION . . . . . . . . 9
20. SECURITIES LAWS . . . . . . . . . . . . . . . . . . . . . . . . 9
21. INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . 10
23. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . 11
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MCLEOD, INC.
AMENDED AND RESTATED
DIRECTORS STOCK OPTION PLAN
McLEOD, INC., a Delaware corporation (the "Corporation"), sets forth
herein the terms of the Amended and Restated Directors Stock Option Plan (the
"Plan") as follows:
1. PURPOSE
1.1 The Plan is an amendment and restatement of the McLeod, Inc.
Director Stock Option Plan and is intended to attract and retain the best
possible members of the Board and to provide additional incentives to those
directors to promote the success of the Corporation. The Plan provides
Eligible Directors an opportunity to purchase shares of the Stock pursuant to
Options. Options granted under the Plan shall not constitute "incentive stock
options" within the meaning of Section 422 of the Code.
1.2 This amendment and restatement of the Plan is intended to
constitute a "formula plan," and Eligible Directors are intended to qualify as
"disinterested administrators" of other plans maintained by the Corporation,
for purposes of Rule 16b-3 under the Exchange Act.
2. DEFINITIONS
For purposes of interpreting the Plan and related documents (including
Stock Option Agreements), the following definitions shall apply:
2.1. "Additional Option" means any Option other than an Initial
Option.
2.2. "Administrator" means the Chief Financial Officer of the
Corporation or such other person as is appointed by the Board to serve as
Administrator.
2.3. "Board" means the board of directors of the Corporation.
2.4. "Code" means the Internal Revenue Code of 1986, as amended.
2.5. "Commencement of Service" means the date of election of the
Eligible Director to his or her first term as a Director.
2.6. "Corporation" means McLeod, Inc., a Delaware corporation.
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2.7. "Effective Date" means the date of adoption of the amendment
and restatement of the Plan by the Board.
2.8. "Eligible Director" means a member of the Board who is not an
officer or employee of the Corporation or any of its subsidiaries.
2.9. "Exchange Act" means the Securities Exchange Act of 1934, as
now in effect or hereafter amended.
2.10. "Exercise Price" means the Option Price multiplied by the
number of shares of Stock purchased pursuant to exercise of an Option.
2.11. "Expiration Date" means the tenth anniversary of the Grant
Date or, if earlier, the termination of the Option pursuant to Section 4.2(c)
hereof.
2.12. "Fair Market Value" means the value of each share of Stock
subject to the Plan determined as follows: If on the Grant Date or other
determination date the Stock is listed on an established national or regional
stock exchange, is admitted to quotation on the National Association of
Securities Dealers Automated Quotation System, or otherwise is publicly traded
on an established securities market, the Fair Market Value of the Stock shall
be the closing price of the Stock on such exchange or in such market (the
highest such closing price if there is more than one such exchange or market)
on the trading day immediately preceding the Grant Date or other determination
date (or, if there is no such reported closing price, the Fair Market Value
shall be the mean between the highest bid and lowest asked prices or between
the high and low sale prices on such trading day), or, if no sale of the Stock
is reported for such trading day, on the next preceding day on which any sale
shall have been reported. If the Stock is not listed on such an exchange,
quoted on such system or traded on such a market, Fair Market Value shall be
determined by the Administrator in good faith.
2.13. "Grant Date" means the date on which an Option grant takes
effect pursuant to Section 7 hereof.
2.14. "Initial Option" means an Option received by an Eligible
Director as of such Eligible Director's Commencement of Service.
2.15. "Option" means any option to purchase one or more shares of
Stock pursuant to the Plan, including both Initial Options and Additional
Options.
2.16. "Optionee" means an Eligible Director who holds an Option.
2.17. "Option Period" means the period during which Options may be
exercised as defined in Section 9 hereof.
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2.18. "Option Price" means the purchase price for each share of
Stock subject to an Option.
2.19. "Securities Act" means the Securities Act of 1933, as now in
effect or as hereafter amended.
2.20. "Stock" means the Class A common stock, par value $0.01 per
share, of the Corporation.
2.21. "Stock Option Agreement" means the written agreement
evidencing the grant of an Option hereunder.
3. ADMINISTRATION
The Plan shall be administered by the Administrator. The
Administrator's responsibilities under the Plan shall be limited to taking all
legal actions necessary to document the Options provided herein, to maintain
appropriate records and reports regarding those Options, and to take all acts
authorized or required by the Plan.
4. STOCK SUBJECT TO THE PLAN
4.1. Options to purchase not more than 550,000 shares of the Stock
may be granted under the Plan. If any Option expires, terminates or is
terminated or canceled for any reason before it is exercised in full, the
shares of Stock that were subject to the unexercised portion of the Option
shall be available for future Options granted under the Plan.
4.2(a). If the outstanding shares of Stock are increased or decreased
or changed into or exchanged for a different number or kind of shares or other
securities of the Corporation by reason of any recapitalization,
reclassification, stock split-up, combination of shares, exchange of shares,
stock dividend or other distribution payable on capital stock, or other
increase or decrease in such shares effected without receipt of consideration
by the Corporation, occurring after the Effective Date, the number and kinds of
shares for the purchase of which Options may be granted under the Plan shall be
adjusted proportionately and accordingly by the Corporation. In addition, the
number and kind of shares for which Options are outstanding shall be adjusted
proportionately and accordingly so that the proportionate interest of the
holder of the Option immediately following such event shall, to the extent
practicable, be the same as immediately prior to such event. Any such
adjustment in outstanding Options shall not change the aggregate Option Price
payable with respect to shares subject to the unexercised portion of the Option
outstanding but shall include a corresponding proportionate adjustment in the
Option Price per share.
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4.2(b). Subject to Section 4.2(c) hereof, if the Corporation shall be
the surviving corporation in any reorganization, merger or consolidation of the
Corporation with one or more other corporations, any Option theretofore granted
pursuant to the Plan shall pertain to and apply to the securities to which a
holder of the number of shares of Stock subject to such Option would have been
entitled immediately following such reorganization, merger or consolidation,
with a corresponding proportionate adjustment of the Option Price per share so
that the aggregate Option Price thereafter shall be the same as the aggregate
Option Price of the shares remaining subject to the Option immediately prior to
such reorganization, merger or consolidation.
4.2(c). Upon the dissolution or liquidation of the Corporation, or
upon a merger, consolidation or reorganization of the Corporation with one or
more other corporations in which the Corporation is not the surviving
corporation, or upon a sale of substantially all of the assets of the
Corporation to another corporation, or upon any transaction (including, without
limitation, a merger or reorganization in which the Corporation is the
surviving corporation) approved by the Board which results in any person or
entity owning 80 percent or more of the combined voting power of all classes of
stock of the Corporation, the Plan and all Options outstanding hereunder shall
terminate, except to the extent provision is made in writing in connection with
such transaction for the continuation of the Plan, the assumption of the
Options theretofore granted, or for the substitution for such Options of new
options covering the stock of a successor corporation, or a parent or
subsidiary thereof, with appropriate adjustments as to the number and kinds of
shares and exercise prices, in which event the Plan (if applicable) and Options
theretofore granted shall continue in the manner and under the terms so
provided. In the event of any such termination of the Plan and Options, each
individual holding an Option shall have the right immediately prior to the
occurrence of such termination and during such period occurring prior to such
termination as the Board in its sole discretion shall determine and designate,
to exercise such Option to the extent that such Option was otherwise
exercisable at the time such termination occurs. The Administrator shall send
written notice of an event that will result in such a termination to all
individuals who hold Options not later than the time at which the Corporation
gives notice thereof to its stockholders.
4.2(d). Adjustments under this Section 4.2 related to stock or
securities of the Corporation shall be made by the Administrator, whose
determination in that respect shall be final and conclusive. No fractional
shares of Stock or units of other securities shall be issued pursuant to any
such adjustment, and any fractions resulting from any such adjustment shall be
eliminated in each case by rounding downward to the nearest whole share or
unit.
4.2(e). The grant of an Option pursuant to the Plan shall not affect
or limit in any way the right or power of the Corporation to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to
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merge, consolidate, dissolve or liquidate, or to sell or transfer all or any
part of its business or assets.
5. ELIGIBILITY
Eligibility under the Plan is limited to Eligible Directors.
6. OPTION PRICE
The Option Price of the Stock covered by each Option granted under the
Plan shall be the greater of the Fair Market Value or the par value of such
Stock on the Grant Date. The Option Price shall be subject to adjustment as
provided in Section 4.2 hereof.
7. NUMBER OF SHARES AND GRANT DATES
Each Eligible Director whose Commencement of Service is after the
Effective Date shall be granted an Initial Option to purchase 10,000 shares of
Stock as of the date of the Eligible Director's Commencement of Service. Each
Eligible Director also shall be granted an Additional Option to purchase 5,000
shares of Stock immediately after each of the next two annual meetings of the
Corporation's stockholders if the Eligible Director continues to be an Eligible
Director at such time.
8. VESTING OF OPTIONS
8.1 The Optionee may exercise the Option (subject to the
limitations on exercise set forth in this Plan or in the Option Agreement
relating to such Option), in installments as follows: on the first anniversary
of the Grant Date of the Option, as set forth in Section 7 above, the Option
shall be exercisable in respect of 25 percent of the number of shares specified
in Section 7 above, and the Option shall be exercisable in respect of an
additional 25 percent of the number of shares specified in Section 7 above on
each of the next three anniversaries of the Grant Date, as set forth in Section
7 above. The foregoing installments, to the extent not exercised, shall
accumulate and be exercisable, in whole or in part, at any time and from time
to time, after becoming exercisable and prior to the termination of the Option;
provided, that no single exercise of the Option shall be for less than 100
shares, unless the number of shares purchased is the total number at the time
available for purchase under this Option.
8.2 In the event of a "Change of Control", all non-vested Options
outstanding under the Plan shall become immediately exercisable. For purposes
of this Plan, "Change of Control" means:
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(a) execution by the Corporation of an agreement for the merger of
the Corporation into or with another corporation, the result of which would be
that the stockholders of the Corporation at the time of execution of such
agreement would own less than 50% of the total equity of the corporation
surviving the merger; or
(b) the sale of assets of the Corporation having an aggregate book
value of 40% or more of the total book value of all assets of the Corporation
as shown on the then most recent annual audited financial statement of the
Corporation; or
(c) a change of control of a nature that would be required to be
reported in response to Item 5(f) of Schedule 14A of Regulation 14A promulgated
under the Exchange Act, provided that, without limitation, such a change of
control shall be deemed to have occurred if (i) any "person" (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Corporation representing 50% of the
Corporation's then outstanding securities; and provided further that no such
change of control shall be deemed to have occurred as a result of the execution
in March 1996 of an Investor Agreement among the Corporation, IES Investments
Inc., Midwest Capital Group, Inc., MWR Investments, Inc., Clark and Mary
McLeod, and certain other stockholders.
9. OPTION PERIOD
An Option shall be exercisable only during the Option Period. The
Option Period shall commence twelve months after the Grant Date, or earlier, if
subject to Sections 4.2(c), 8.2 or 12, and shall end at the close of business
on the Expiration Date.
10. TIMING AND METHOD OF EXERCISE
Subject to Sections 8 and 9 hereof, an Option that is exercisable
hereunder may be exercised by delivery to the Corporation on any business day,
at its principal office addressed to the attention of the Committee, of written
notice of exercise, which notice shall specify the number of shares for which
the Option is being exercised, and shall be accompanied by payment in full of
the Option Price of the shares for which the Option is being exercised.
Payment of the Option Price for the shares of Stock purchased pursuant to the
exercise of an Option shall be made (a) in cash or by certified check payable
to the order of the Corporation; (b) through the tender to the Corporation of
shares of Stock, which shares shall be valued, for purposes of determining the
extent to which the Option Price has been paid thereby, at their Fair Market
Value on the date of exercise; or (c) by a combination of the methods described
in (a) and (b) hereof. Payment in full of the Option Price
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need not accompany the written notice of exercise provided the notice directs
that the Stock certificate or certificates for the shares for which the Option
is exercised be delivered to a licensed broker acceptable to the Corporation as
the agent for the individual exercising the Option and, at the time such Stock
certificate or certificates are delivered, the broker tenders to the
Corporation cash (or cash equivalents acceptable to the Corporation) equal to
the Option Price plus the amount (if any) of federal and/or other taxes which
the Corporation may, in its judgment, be required to withhold with respect to
the exercise of the Option. An attempt to exercise any Option granted
hereunder other than as set forth above shall be invalid and of no force and
effect. Promptly after the exercise of an Option and the payment in full of
the Option Price of the shares of Stock covered thereby, the individual
exercising the Option shall be entitled to the issuance of a Stock certificate
or certificates evidencing such individual's ownership of such shares.
11. SERVICE TERMINATION
Upon the termination of service (a "Service Termination") of the
Optionee in all capacities as an employee and/or director of the Corporation
and all of its affiliated companies, other than by reason of the death or
permanent and total disability of such Optionee, any Option granted to an
Optionee pursuant to the Plan shall terminate, and such Optionee shall have no
further right to purchase shares of Stock pursuant to such Option.
12. RIGHTS IN THE EVENT OF DEATH OR DISABILITY
12.1. If an Optionee dies while in service as a director of the
Corporation, the executors or administrators or legatees or distributees of
such Optionee's estate shall have the right (subject to the general limitations
on exercise set forth in Section 9 above), at any time within three months
after the date of such Optionee's death and prior to termination of the Option
pursuant to Section 9 above, to exercise any Option held by such Optionee at
the date of such Optionee's death, whether or not such Option was exercisable
immediately prior to such Optionee's death.
12.2. If there is a Service Termination by reason of the permanent
and total disability of the Optionee, then such Optionee shall have the right
(subject to the general limitations on exercise set forth in Section 9 above),
at any time within three months after such Service Termination and prior to
termination of the Option pursuant to Section 9 above, to exercise, in whole or
in part, any Option held by such Optionee at the date of such Service
Termination, whether or not such Option was exercisable immediately prior to
such Service Termination. Whether a Service Termination is to be considered by
reason of permanent and total disability for purposes of this Plan shall be
determined by the Board, which determination shall be final and conclusive.
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13. NO STOCKHOLDER RIGHTS UNDER OPTION
Neither an Optionee nor any person entitled to exercise an Optionee's
rights in the event of an Optionee's death shall have any of the rights of a
stockholder with respect to the shares of Stock subject to an Option except to
the extent the certificates for such shares shall have been issued upon the
exercise of the Option.
14. CONTINUATION OF SERVICE
Nothing in the Plan shall confer upon any person any right to continue
as a member of the Board or interfere in any way with the right of the
Corporation to terminate such relationship.
15. STOCK OPTION AGREEMENT
Each Option granted pursuant to the Plan shall be evidenced by a
written Stock Option Agreement notifying the Optionee of the grant and
incorporating the terms of the Plan. The Stock Option Agreement shall be
executed by the Corporation and the Optionee.
16. WITHHOLDING
The Corporation shall have the right to withhold, or require an
Optionee to remit to the Corporation, an amount sufficient to satisfy any
applicable federal, state or local withholding tax requirements imposed with
respect to exercise of Options. To the extent permissible under applicable
tax, securities and other laws, the Optionee may satisfy a tax withholding
requirement by directing the Corporation to apply shares of Stock to which the
Optionee is entitled as a result of the exercise of an Option to satisfy
withholding requirements under this Section 16.
17. NON-TRANSFERABILITY OF OPTIONS
Each Option granted pursuant to the Plan shall, during Optionee's
lifetime, be exercisable only by Optionee, and neither the Option nor any right
thereunder shall be transferable by the Optionee by operation of law or
otherwise other than by will or the laws of descent and distribution, and shall
not be pledged or hypothecated (by operation of law or otherwise) or subject to
execution, attachment or similar processes.
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18. USE OF PROCEEDS
The proceeds received by the Corporation from the sale of Stock
pursuant to Options granted under the Plan shall constitute general funds of
the Corporation.
19. ADOPTION, AMENDMENT, SUSPENSION AND TERMINATION
19.1. The Plan shall be effective as of the date of adoption by the
Board, subject to stockholder approval of the Plan within one year of the
Effective Date by a majority of the votes cast at a duly held meeting of the
stockholders of the Corporation at which a quorum representing a majority of
all outstanding stock is present, either in person or by proxy, and voting on
the matter, or by written consent in accordance with applicable state law and
the Certificate of Incorporation and Bylaws of the Corporation and in a manner
that satisfies the requirements of Rule 16b-3(b) of the Exchange Act; provided,
however, that upon approval of the Plan by the stockholders of the Corporation,
all Options granted under the Plan on or after the Effective Date shall be
fully effective as if the stockholders of the Corporation had approved the Plan
on the Effective Date. If the stockholders fail to approve the Plan within one
year of the Effective Date, any Options granted hereunder shall be null, void
and of no effect.
19.2. Subject to the limitation of Section 19.4 hereof, the Board
may at any time suspend or terminate the Plan, and may amend it from time to
time in such respects as the Board may deem advisable, which approval may be
made subject to approval by the Corporation's stockholders.
19.3. No Option may be granted during any suspension or after the
termination of the Plan, and no amendment, suspension or termination of the
Plan shall, without the Optionee's consent, alter or impair any rights or
obligations under any Stock Option Agreement previously entered into under the
Plan. The Plan shall terminate ten years after the Effective Date unless
previously terminated pursuant to Section 4.2 hereof or by the Board pursuant
to this Section 19.
19.4. Notwithstanding the provisions of Section 19.2 hereof, the
Plan shall not be amended more than once in any six-month period other than to
comport with changes in the Code, the Employee Retirement Income Security Act
of 1974, or the rules promulgated thereunder.
20. SECURITIES LAWS
20.1. The Corporation shall not be required to sell or issue any
shares of Stock under any Option if the sale or issuance of such shares would
constitute a
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violation by the individual exercising the Option or the Corporation of any
provisions of any law or regulation of any governmental authority, including
without limitation any federal or state securities laws or regulations.
Specifically in connection with the Securities Act, upon exercise of any
Option, unless a registration statement under the Securities Act is in effect
with respect to the shares of Stock covered by such Option, the Corporation
shall not be required to sell or issue such shares unless the Administrator has
received evidence satisfactory to the Administrator that the holder of such
Option may acquire such shares pursuant to an exemption from registration under
the Securities Act. Any determination in this connection by the Administrator
shall be final and conclusive. The Corporation may, but shall in no event be
obligated to, register any securities covered hereby pursuant to the Securities
Act. The Corporation shall not be obligated to take any affirmative action in
order to cause the exercise of an Option or the issuance of shares pursuant
thereto to comply with any law or regulation of any governmental authority. As
to any jurisdiction that expressly imposes the requirement that an Option shall
not be exercisable unless and until the shares of Stock covered by such Option
are registered or are subject to an available exemption from registration, the
exercise of such Option (under circumstances in which the laws of such
jurisdiction apply) shall be deemed conditioned upon the effectiveness of such
registration or the availability of such an exemption.
20.2. The intent of the Plan is to qualify for the exemption
provided by Rule 16b-3 under the Exchange Act. To the extent any provision of
the Plan does not comply with the requirements of Rule 16b-3, it shall be
deemed inoperative and shall not affect the validity of the Plan. In the event
Rule 16b-3 is revised or replaced, the Board of Directors may exercise
discretion to modify the Plan in any respect necessary to satisfy the
requirements of the revised exemption or its replacement.
21. INDEMNIFICATION
21.1. To the extent permitted by applicable law, the Administrator
shall be indemnified and held harmless by the Corporation against and from any
and all loss, cost, liability or expense that may be imposed upon or reasonably
incurred by the Administrator in connection with or resulting from any claim,
action, suit or proceeding to which the Administrator may be a party or in
which the Administrator may be involved by reason of any action taken or
failure to act under the Plan, and against and from any and all amounts paid by
the Administrator (with the Corporation's written approval) in the settlement
thereof, or paid by the Administrator in satisfaction of a judgment in any such
action, suit or proceeding except a judgment in favor of the Corporation;
subject, however, to the condition that upon the institution of any claim,
action, suit or proceeding against the Administrator, the Administrator shall
give the Corporation an opportunity in writing, at its own expense, to handle
and defend the same before
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the Administrator undertakes to handle and defend it on the Administrator's own
behalf. The foregoing right of indemnification shall not be exclusive of any
other right to which such person may be entitled as a matter of law or
otherwise, or any power the Corporation may have to indemnify the Administrator
or hold the Administrator harmless.
21.2. The Administrator and each officer and employee of the
Corporation shall be fully justified in reasonably relying or acting upon any
information furnished in connection with the administration of the Plan by the
Corporation or any employee of the Corporation. In no event shall any person
who is or shall have been the Administrator, or an officer or employee of the
Corporation, be liable for any determination made or other action taken or any
omission to act in reliance upon any such information, or for any action
(including furnishing of information) taken or any failure to act, if in good
faith.
23. GOVERNING LAW
The validity, interpretation and effect of the Plan, and the rights of
all persons hereunder, shall be governed by and determined in accordance with
the laws of Delaware, other than the choice of law rules thereof.
The amendment and restatement of the Plan was duly adopted and
approved by the Board on March 28, 1996 and was duly approved by the
stockholders of the Corporation on April 30, 1996.
/s/ CASEY D. MAHON, ESQ.
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Casey D. Mahon, Esq.
Secretary
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