As filed with the Securities and Exchange Commission on August 17, 1998
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
US LEC CORP.
(Exact name of Registrant as specified in its Charter)
DELAWARE 56-2065535
(State or other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
401 NORTH TRYON STREET, SUITE 1000
CHARLOTTE, NORTH CAROLINA 28202
(Address of principal executive offices) (Zip Code)
US LEC CORP.
1998 OMNIBUS STOCK PLAN
AND
WARRANTS
(Full title of the Plan(s))
AARON D. COWELL, JR.
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
US LEC CORP.
401 NORTH TRYON STREET, SUITE 1000
CHARLOTTE, NORTH CAROLINA 28202
(Name and Address of Agent for Service)
(704) 319-1000
(Telephone Number, Including Area Code, of Agent for Service)
Copy to:
BARNEY STEWART III, ESQ.
MOORE & VAN ALLEN, PLLC
NATIONSBANK CORPORATE CENTER
100 NORTH TRYON STREET, FLOOR 47
CHARLOTTE, NORTH CAROLINA 28202-4003
(704) 331-1000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed
Title of Proposed Maximum Maximum
Securities to be Amount to be Offering Price Per Aggregate Amount of
Registered Registered Share(1) Offering Price Registration Fee
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common 1,480,000
Stock shares $18.00 $26,640,000 $7,859
- --------------------------------------------------------------------------------------
</TABLE>
(1) Estimated in accordance with Rule 457(h) under the Securities Act of 1933,
as amended (the "Securities Act"), solely for the purpose of calculating the
registration fee, based upon the average of the last sale price reported by
Nasdaq on August 10, 1998.
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EXPLANATORY NOTE
This Registration Statement covers (i) 1,300,000 shares of Class A Common
Stock, par value $.01 per share (the "Common Stock"), of US LEC Corp. (the
"Company" or the "Registrant") reserved for issuance under the Company's 1998
Omnibus Stock Plan (the "Plan") and (ii) 180,000 shares of Common Stock reserved
for issuance upon the exercise of nontransferable warrants granted by the
Company to two employees (the "Employee Warrants"). Pursuant to Rule 428
promulgated under the Securities Act, the Company intends to deliver a
prospectus meeting the requirements of Part I of Form S-8 to all participants in
the Plan and to each person holding an Employee Warrant.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents heretofore filed by the Company with the
Securities and Exchange Commission (the "Commission") pursuant to the Securities
Act are incorporated herein by reference:
(a) The Prospectus included as part of the Company's Registration
Statement on Form S-1 (Reg. No. 333-46341) (the "Registration Statement on
Form S-1") relating to the initial public offering of the Common Stock;
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998;
(c) The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998; and
(d) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A.
In addition, all documents subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), prior to the filing of a post-effective amendment
hereto which indicates that all securities offered hereby have been sold or
which deregisters all the securities then remaining unsold, shall be deemed to
be incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Certain provisions of the Company's Restated Certificate of Incorporation
(the "Certificate") and Bylaws, as amended, provide that the Company shall
indemnify all of its directors and officers to the fullest extent permitted by
the General Corporation Law of the State of Delaware (the "Delaware Law"). In
addition, the Certificate authorizes the Registrant to enter into one or more
agreements with any person which provide for indemnification greater or
different than that provided in its Certificate.
Section 145 of the Delaware Law permits a corporation to indemnify its
directors and officers against expenses (including attorney's fees), judgments,
fines and amounts paid in settlements actually and reasonably incurred by them
in connection with any action, suit or proceeding, whether criminal or civil,
brought by a third party if such directors or officers acted in good faith and
in a manner they reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal action or
proceeding, had no reason to believe their conduct was unlawful. In a derivative
action, indemnification may be made only for expenses actually and reasonably
incurred by directors and officers in connection with the defense or settlement
of an action or suit and only with respect to a matter as to which they shall
have acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation, except that no
indemnification shall be made if such person shall have been adjudged liable to
the corporation, unless and only to the extent that the court in which the
action or suit was brought shall determine upon application that the defendant
officers or directors are reasonably entitled to indemnity for such expenses
despite such adjudication of liability.
2
<PAGE>
In addition, Section 102 of the Delaware Law provides that a corporation
may include in its certificate of incorporation a provision eliminating or
limiting the personal liability of directors for monetary damages for breach of
fiduciary duty, provided that such provision shall not eliminate or limit the
liability of a director: (i) for any breach of the director's duty of loyalty to
the corporation or its stockholders; (ii) for acts or omissions not in good
faith that involve intentional misconduct or a knowing violation of the law;
(iii) conduct in violation of Section 174 of the Delaware Law (which section
relates to unlawful distributions); or (iv) for any transaction from which the
director derived an improper personal benefit. The Certificate currently
includes such provisions.
The Company maintains a directors and officers insurance policy which
insures its officers and directors from any claim arising out of an alleged
wrongful act by such persons in their respective capacities as officers and
directors of the Company.
ITEM 8. EXHIBITS
EXHIBIT NO. DESCRIPTION OF DOCUMENT
4.1 Form of Class A Common Stock Certificate*
4.2 US LEC Corp. 1998 Omnibus Stock Plan*
4.3 Warrant, dated August 4, 1997 issued to Craig K. Simpson*
4.4 Warrant, dated November 10, 1997 issued to Craig Chason
5 Opinion of Moore & Van Allen, PLLC
23.1 Consent of Deloitte & Touche, LLP
23.2 Consent of Moore & Van Allen, PLLC (included in the opinion
filed as Exhibit No. 5)
24.1 Power of Attorney (included on the signature page.)
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* Incorporated by reference to the Company's Registration
Statement on Form S-1.
ITEM 9. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to include
any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change
to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
3
<PAGE>
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Charlotte, State of North Carolina, on August 17,
1998.
US LEC CORP.
By: /S/ AARON D. COWELL, JR.
Aaron D. Cowell, Jr.
Executive Vice President and
General Counsel
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Aaron
D. Cowell, Jr. his true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacity, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all
intents and purposes as he might, or could, do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his substitute, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registrant Statement has been signed by the following persons in the capacities
and on the dates indicated.
SIGNATURE TITLE DATE
/S/ RICHARD T. AAB Chairman, Chief Executive
Richard T. Aab Officer and Director August 17, 1998
/S/ TANSUKH V. GANATRA President, Chief Operating
Tansukh V. Ganatra Officer and Director August 17, 1998
/S/ AARON D. COWELL, JR. Executive Vice President
Aaron D. Cowell, Jr. and General Counsel August 17, 1998
/S/ DAVID M. FLAUM
David M. Flaum Director August 17, 1998
/S/ STEVEN L. SCHOONOVER
Steven L. Schoonover Director August 17, 1998
5
EXHIBIT 4.4
<PAGE>
Exhibit 4.4
WARRANT
This Warrant is issued as of November 10, 1997, by US LEC L.L.C., a
Delaware limited liability company (the "Company"), to Craig Chason, a resident
of Louisville, Kentucky (the "Holder").
1. Issuance of Warrant. The Company hereby grants to the Holder the right
to purchase and acquire, at the times and subject to the conditions hereinafter
set forth, ten (10) non-voting units ("Non-Voting Units") of ownership interest
in the Company at the Exercise Price (as hereinafter defined). In the event the
Company merges with and into any other entity such that the Company is not the
surviving entity, the Holder shall be entitled to purchase that number of shares
or other equity interests of the surviving entity that the Holder would have
been entitled to receive as a result of the merger had the Holder exercised its
rights under this Warrant prior to such merger.
2. Exercise; Term. Subject to the terms and conditions hereinafter set
forth, the Holder shall be entitled to purchase and acquire up to ten (10)
Non-Voting Units (in minimum increments of five (5) Non-Voting Units at a time)
at any time and from time to time from the date of this Warrant until 5:00 p.m.
E.S.T., on November 10, 2000. The Holder shall exercise its rights to purchase
Non-Voting Units under this Warrant by providing written notice of exercise to
the Company at the following address: 212 South Tryon Street, Suite 1540,
Charlotte, North Carolina 28281, Attention: Chairman, or such other address as
the Company shall designate in a written notice to the Holder. In addition, the
Holder shall deliver to the Company this Warrant (or any replacement warrant
issued by the Company pursuant to Paragraph 3 below), an executed copy of the
signature page of the Operating Agreement of the Company (but only with respect
to the first exercise of the Warrant), and a certified check representing
payment to the Company of the aggregate Exercise Price of the Non-Voting Units
to be purchased.
In addition, the exercise of this Warrant shall be conditioned on the
continued employment of the Holder by the Company at the time of any such
exercise. In addition, the exercise of this Warrant shall be conditioned on
compliance with all applicable laws and regulations, including, without
limitation, obtaining all requisite approvals, if any, which may then be
required under applicable law.
This Warrant, and all rights of the Holder to purchase or acquire
Non-Voting Units hereunder, shall expire automatically and without any further
action by the Company at 5:00 p.m. E.S.T., on November 10, 2000.
3. Effect of Exercise. The exercise of this Warrant (or any replacement
warrant issued by the Company as provided herein), shall become effective on the
first day of the month immediately following the month in which notice of
exercise is given to the Company. Upon the exercise of this Warrant or any
replacement warrant the Company shall, as promptly as practicable, deliver to
the Holder a certificate or certificates representing the number of Non-Voting
Units purchased by the Holder. If this Warrant shall be exercised with respect
to less than all of the Non-Voting Units to which the Holder is entitled to
purchase hereunder, the Holder shall be entitled to receive a replacement
warrant covering the number of Non-Voting Units in respect of which this Warrant
shall not have been exercised, which new warrant shall in all other respects be
identical to this Warrant.
4. Exercise Price. The exercise price (the "Exercise Price") per each Unit
purchased pursuant to the terms of this Warrant shall be FOUR THOUSAND TWO
HUNDRED EIGHTY-FIVE DOLLARS ($4,285.00).
5. No Transfer Rights. Neither this Warrant nor the Non-Voting Units have
been registered under the Securities Act of 1933, as amended ("Securities Act"
or any state securities laws "Blue Sky Laws"). This Warrant has been acquired
for investment purposes and not with a view to distribution or resale and may
not be
<PAGE>
pledged, hypothecated, sold, made subject to a security interest, or otherwise
transferred (voluntarily or involuntarily) without (a) the prior written consent
of the Company and (b) (i) an effective registration statement for such Warrant
under the Securities Act and such applicable Blue Sky Laws, or (ii) an opinion
of counsel, which opinion and counsel shall be reasonably satisfactory to the
Company and its counsel, that registration is not required under the Securities
Act or under any applicable Blue Sky Laws. Any attempted transfer of this
Warrant in violation of this Paragraph 5 shall render this Warrant null and void
and of no further force and effect. In addition, any Non-Voting Units issued
upon the exercise of this Warrant shall be subject to the restrictions on
transfer set forth in the Operating Agreement of the Company, and shall bear
substantially the following legend:
THE UNITS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE
SECURITIES LAWS OF ANY STATE. THE UNITS HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY AND ITS COUNSEL TO THE EFFECT THAT THE PROPOSED TRANSACTION
DOES NOT INVOLVE A VIOLATION OF THE SECURITIES ACT OF 1933, AS
AMENDED.
THE UNITS REPRESENTED BY THIS CERTIFICATE, AND THE TRANSFER HEREOF,
ARE SUBJECT TO THE TERMS AND CONDITIONS OF THAT CERTAIN OPERATING
AGREEMENT DATED JANUARY 1, 1997, AS AMENDED FROM TIME TO TIME, A
COPY OF WHICH IS ON FILE IN THE PRINCIPAL OFFICE OF THE COMPANY.
6. Additional Actions. The Holder and the Company agree to execute such
other documents and instruments as counsel for the Company reasonably deems
necessary to effect the compliance of the issuance of this Warrant and any
Non-Voting Units issued upon exercise hereof with applicable federal and state
securities laws.
7. Governing Law. This Warrant shall be governed by the laws of the State
of Delaware applicable to agreements made entirely within the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have set their hands as of the date
first above written.
COMPANY:
US LEC L.L.C.,
a Delaware limited liability company
By: /s/ Tansukh V. Ganatra
------------------------------
Tansukh V. Ganatra, President
HOLDER:
/s/ Craig Chason
--------------------
Craig Chason
2
EXHIBIT 5
<PAGE>
Exhibit 5
August 17, 1998
US LEC Corp.
212 South Tryon Street, Suite 1540
Charlotte, North Carolina 28281
Re: Registration Statement on Form S-8
Ladies and Gentlemen:
We have acted as counsel to US LEC Corp., a Delaware corporation (the
"Company" or "you") and have examined the Registration Statement on Form S-8
(the "Registration Statement") to be filed by the Company with the Securities
and Exchange Commission on or about August 17, 1998, in connection with the
registration under the Securities Act of 1933, as amended, of 1,480,000 shares
of the Company's Class A Common Stock, par value $0.01 per share (the "Shares"),
of which 180,000 shares are reserved for issuance pursuant to certain warrant
agreements and 1,300,000 shares are reserved for issuance under the US LEC Corp.
1998 Omnibus Stock Plan. As your legal counsel, we have examined the proceedings
taken, and are familiar with the proceedings proposed to be taken, by you in
connection with the sale and issuance of the Shares.
In our opinion, the Shares, when issued and sold in the manner referred to
in the Registration Statement and in accordance with the resolutions adopted by
the Board of Directors of the Company, are or will be legally and validly
issued, fully paid and nonassessable.
We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever appearing in the
Registration Statement, including the Prospectus constituting a part thereof,
and any subsequent amendment thereto.
Very truly yours,
MOORE & VAN ALLEN, PLLC
EXHIBIT 23.1
<PAGE>
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of US LEC Corp. on Form S-8 of our report dated February 4, 1998, appearing
in the Prospectus, which is part of the Registration Statement on
Form S-1 (333-46341), for the year ended December 31, 1997.
/s/ DELOITTE & TOUCHE LLP
- -------------------------
Charlotte, North Carolina
August 17, 1998
