SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER
THE SECURITIES EXCHANGE ACT OF 1934
McLEOD, INC.
(Name of Issuer)
CLASS A COMMON STOCK
(Title of class of securities)
582266 10 2
(CUSIP Number)
IES INDUSTRIES INC.
IES INVESTMENTS INC.
Stephen W. Southwick
200 First Street S.E.
Cedar Rapids, Iowa 52401
(319) 398-4411
(Name, Address, and Telephone Number of person
authorized to receive notices and communications)
June 14, 1996
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is subject of this Schedule 13D, and
is filing this schedule because of Rule 13d-1 (b)(3) or (4), check the
following box [_].
Check the following box if a fee is being paid with the statement
[x]. (A fee is not required only if the reporting person: (1) has a
previous statement on file reporting beneficial ownership of more than
five percent of the class of securities described in Item 1; and (2) has
filed no amendment subsequent thereto reporting beneficial ownership of
five percent or less of such class.) (See Rule 13d-7.)
Note. Six copies of this statement, including all
exhibits, should be filed with the Commission. See Rule 13d-1 (a)
for other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class
of securities, and for any subsequent amendment containing information
which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of
the Act (however, see the Notes).
CUSIP No. 582266 10 2 13D Page 2 of 7 Pages
1. Name of Reporting Persons
S.S. or I.R.S. Identification Nos. of Above Persons
IES Industries Inc. TIN 42-1271452
IES Investments Inc. TIN 42-1375913
2. Check the appropriate box if a member of a group (a) [x]
(b) [_]
3. SEC Use Only
4. Source of Funds
WC
5. Check box if disclosure of legal proceedings is required pursuant
to Item 2(d) or 2(e) [_]
Not Applicable
6. Citizenship or Place of Organization
Iowa
Number of 7. Sole Voting Power 10,245,457 See Item 5
Shares
Beneficially 8. Shared Voting Power 0
Owned By
Each 9. Sole Dispositive Power 10,245,457 See Item 5
Reporting
Person With 10. Shared Dispositive Power 0
11. Aggregate Amount Beneficially Owned By Each Reporting Person
10,245,457 See Item 5
12. Check box if the aggregate amount in Row (11) excludes certain
shares*
Not Applicable
13. Percent of Class represented by amount in Row (11)
21.7 See Item 5
14. Type of Reporting Person*
CO
______________________________________________________________________________
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Item 1. Security and Issuer.
This statement relates to the Class A Common Stock, $.01 par
value (the "Class A Common Stock"), of McLeod, Inc., a Delaware
corporation (the "Company"), whose principal executive offices are
located at 221 Third Avenue S.E., Suite 500, Cedar Rapids, Iowa 52401.
Item 2. Identity and Background.
This statement is being filed by IES Investments Inc., an Iowa
corporation, a wholly-owned subsidiary of IES Diversified Inc., an Iowa
corporation, a wholly-owned subsidiary of IES Industries Inc., and IES
Industries Inc., an Iowa corporation, the ultimate parent company of IES
Investments Inc. (together "IES"), whose principal executive offices are
located at 200 First Street, S.E., Cedar Rapids, Iowa 52401. The
principal business of IES Investments Inc. is to invest in, develop
and/or manage investment and financial business ventures.
The name, business address, present principal occupation or
employment, citizenship, and the name, principal business and address of
any corporation or other organization in which such employment is
conducted of each executive officer and director of IES are set forth in
Schedule A attached hereto. To IES's knowledge, none of such directors
and executive officers has, during the past five years, been (i)
convicted in a criminal proceeding (excluding traffic violations and
similar misdemeanors) or (ii) a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a
result of such proceeding was or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
During the past five years, IES has not been (i) convicted in a
criminal proceeding (excluding traffic violations and similar
misdemeanors) or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation
with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
IES Investments Inc. purchased the shares of Class A Common Stock
set forth in Item 5 herein with funds provided by its parent, IES
Diversified Inc., an Iowa corporation, a wholly-owned subsidiary of IES
Industries Inc., for that specific purpose.
Item 4. Purpose of Transaction.
IES has acquired the Class A Common Stock for investment purposes.
Item 5. Interest in Securities of Issuer.
(a) IES beneficially owns an aggregate total of 10,245,457 shares
of Class A Common Stock, which, including the shares of Class B Common
Stock (as defined below) owned by IES, represents approximately 21.7% of
the shares of Class A Common Stock outstanding on June 14, 1996, the
date (the "IPO Date") of the initial public offering of the Class A
Common Stock by the Company (the "Initial Public Offering") according to
the final prospectus issued in conjunction with the Initial Public
Offering and adjusted for the underwriting overallotment (and assuming
all outstanding Class B Common Stock shares are converted into Class A
Common Stock shares).
The aggregate total shares owned beneficially by IES includes a
total of 8,420,457 shares of the Company's Class B Common Stock, par
value $.01 (the "Class B Common Stock"), representing approximately
53.89% of the shares of Class B Common Stock outstanding on the IPO
Date, according to the final prospectus issued in conjunction with the
Initial Public Offering (based solely on the Class B Common Stock
without giving effect to a conversion into Class A Common Stock). The
Class B Common Stock was acquired in April 1993, February 1994 and June
1995 for investment purposes. Holders of Class B Common Stock are
entitled to attend all meetings of stockholders and, together with other
stockholders, to vote on any matter or thing properly considered and
acted upon by the shareholders of the Company. Holders of Class B
Common Stock are entitled to .40 vote per share. The shares of Class B
Common Stock may be converted at any time at the option of IES into
fully paid and nonassessable shares of Class A Common Stock at the rate
of one share of Class A Common Stock for each share of Class B Common
Stock, as adjusted for any stock split. The total aggregate shares
owned by IES includes shares which may be purchased within 60 days of
the date of this report pursuant to outstanding options.
Together with MWR Investments Inc., Midwest Capital Group, Inc.
and Clark E. McLeod and Mary E. McLeod, IES comprise a group within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934.
Collectively, this group beneficially owns a total of 27,572,515 shares
of Class A Common Stock which represents 58.1% of the shares of Class A
Common Stock outstanding on June 14, 1996, according to the final
prospectus issued in conjunction with the Initial Public Offering and
adjusted for the underwriting overallotment (and assuming all Class B
Common Stock Shares are converted into Class A Common Stock Shares).
(b) The number of shares of Common Stock which IES has
(i) sole power to vote or direct the vote 10,245,457
(ii) shared power to vote or direct the vote 0
(iii) sole power to dispose or direct the disposition 10,245,457
(iv) shared power to dispose or direct the disposition 0
(c) IES purchased 500,000 shares of Class A Common Stock at $20.00
per share in the Initial Public Offering. Except for this purchase, IES
has not effected any transaction in either the Class A Common Stock or
the Class B Common Stock during the past 60 days.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of the Issuer.
IES Investments Inc., Clark E. McLeod and Mary E. McLeod, Midwest
Capital Group, Inc. and MWR Investments Inc. (collectively, the
"Investor Stockholders") and the Company have, with respect to the
respective shares of capital stock owned by each such Investor
Stockholder, entered into an investor agreement (the "Investor
Agreement"), effective as of June 10, 1996, which provides that each
Investor Stockholder, for so long as each Investor Stockholder owns at
least 10% of the outstanding capital stock of the Company (but in no
event longer than three years), shall vote such Investor Stockholder's
stock and take all action within its power to: (i) establish the size of
the Board of Directors of the Company at nine directors; (ii) cause to
be elected to the Board of Directors of the Company one director
designated by IES Investments Inc. (for so long as IES Investments Inc.
owns at least 10% of the outstanding capital stock of the Company);
(iii) cause to be elected to the Board of Directors of the Company one
director designated by Midwest Capital Group, Inc. (for so long as
Midwest Capital Group, Inc. owns at least 10% of the outstanding capital
stock of the Company); (iv) cause to be elected to the Board of
Directors of the Company three directors who are executive officers of
the Company designated by Clark E. McLeod (for so long as Clark E.
McLeod and Mary E. McLeod own at least 10% of the outstanding capital
stock of the Company); and (v) cause to be elected to the Board of
Directors of the Company four independent directors nominated by the
Board of Directors of the Company. The Investor Agreement also provides
that, for a period ending in March 1999 and subject to certain
exceptions, IES Investments Inc. will refrain from acquiring, or
agreeing or seeking to acquire, beneficial ownership of any securities
issued by the Company. In addition, the Investor Agreement provides
that, for a two year period commencing on the IPO Date, IES Investments
Inc. (and all other investor stockholders) will not sell or otherwise
dispose of any equity securities of the Company without the consent of
the Board of Directors of the Company.
In connection with the Initial Public Offering, IES Investments
Inc. entered into an agreement (the "Lock-up Agreement") with the
underwriters of the Initial Public Offering pursuant to which IES
Investments Inc. has agreed that for a one year period commencing on
June 10, 1996, IES Investments Inc. will not sell or otherwise dispose
of any equity security of the Company without the consent of the
underwriters.
The foregoing description of the Investor Agreement and the Lock-up
Agreement is qualified in its entirety by reference to the Investor
Agreement and the Lock-up Agreement which are filed as exhibits to this
Schedule and are incorporated herein by reference.
Item 7. Materials to be Filed as Exhibits.
1. Form of Investor Agreement dated as of April 1, 1996 among the
Company, IES, Midwest Capital Group, Inc., MWR Investments Inc., Clark
E. McLeod and Mary E. McLeod and certain other stockholders (previously
filed with the Securities and Exchange Commission as Exhibit 4.8 to the
Company's Registration Statement on Form S-1, as amended, dated June 7,
1996, Registration No. 333-3112 and incorporated by reference herein).
2. Lock-up Letter from IES Investments Inc. to Salomon Brothers
Inc., Morgan Stanley & Co. Incorporated and Bear, Stearns & Co. Inc.
dated June 10, 1996.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is
true, complete and correct.
Date: June 25, 1996
IES INDUSTRIES INC.
IES INVESTMENTS INC.
By: /s/ Stephen W. Southwick
Stephen W. Southwick,
Secretary
SCHEDULE A
The following information sets forth the name, citizenship,
business address and present principal occupation of each of the
directors and executive officers of IES Industries Inc. and IES
Investments Inc. Each of the directors and officers of IES is a citizen
of the United States of America, except for Mr. Dietrich. Mr. Dietrich
is a citizen of Canada. Each of the directors and executive officers of
IES Investments Inc. and each of the executive officers of IES
Industries Inc. business address is IES Tower, 200 First Street, S.E.,
Cedar Rapids, Iowa 52401.
IES INDUSTRIES INC.
Directors Title Amount of McLeod, Inc.
Common Stock Shares
Beneficially Owned
Lee Liu Chairman of the Board, 42,607
President & Chief
Executive Officer of
IES Industries Inc.
C.R.S. Anderson Retired Chairman of the Board 4,000
1245 Par View Drive of IES Industries Inc.
Sanibel, FL 33957
J. Wayne Bevis Vice Chairman, Pella 600
102 Main Street Corporation
Pella, Iowa 50219
Jack R. Newman Partner, Morgan, Lewis & Bockius 2,250
1800 M Street N.W.
Washington, D.C. 20036-5869
Robert D. Ray President & CEO, IASD Health 5,000
636 Grand Avenue - 21st Flr Services Inc.
Des Moines, Iowa 50309
David Q. Reed Attorney 600
Mark Twain Tower, Suite 1210
106 West 11th Street
Kansas City, MO 64105
Henry Royer President & CEO, River City Bank 3,000
2485 Natomas Park Drive
Sacramento, CA 95833
Robert W. Schlutz President, Schlutz Enterprises 4,000
14812 N. Avenue
P.O. Box 269
Columbus Junction, IA 52738
Anthony R. Weiler Senior Vice President, Merchandising, 2,000
2235 Staples Mill Rd. Heilig-Meyers Co.
Richmond, VA 23230
IES Industries Inc. Title Amount of McLeod, Inc.
Executive Officers Common Stock Shares
Beneficially Owned
Lee Liu Chairman of the Board, President 42,607
& Chief Executive Officer
Peter W. Dietrich Vice President, Corporate Development 500
Stephen W. Southwick Vice President, General Counsel & Secretary ---
Dean E. Ekstrom Vice President, Administration 500
Dennis B. Vass Treasurer & Principal Financial Officer 1,000
IES INVESTMENTS INC.
Executive Officers Title
Lee Liu President 42,607
Peter W. Dietrich Vice President 500
Thomas L. Aller Vice President 1,625
Kenneth R. Whiting Vice President, International Business ---
Dennis B. Vass Treasurer 1,000
Stephen W. Southwick Secretary ---
Directors
Lee Liu Chairman of the Board, 42,607
President & Chief Executive
Officer of IES Industries Inc.
Peter W. Dietrich Vice President, Corporate Development 500
of IES Industries Inc.
EXHIBIT 4
McLeod, Inc.
Public Offering of Class A Common Stock
June 10, 1996
Salomon Brothers Inc.
Morgan Stanley & Co. Incorporated
Bear, Stearns & Co. Inc.
As Representatives of the several Underwriters,
c/o Salomon Brothers Inc.
Seven World Trade Center
New York, New York 10048
Dear Sirs:
This letter is being delivered to you in connection with the
proposed Underwriting Agreement (the "Underwriting Agreement"), between
McLeod, Inc., a Delaware corporation (the "Company"), and each of you as
Representatives of a group of Underwriters named therein, relating to an
underwritten public offering of Class A Common Stock, $.01 par value
(the "Common Stock"), of the Company.
In order to induce you and the other Underwriters to enter into the
Underwriting Agreement, the undersigned acknowledges that any shares of
Common Stock purchased by the undersigned contemporaneously with the
closing of the underwritten public offering will be purchased with the
intention of holding such shares for purposes of investment and agrees
not to offer, sell or contract to sell, or otherwise dispose of,
directly or indirectly, or announce an offering of, any shares of Common
Stock beneficially owned by the undersigned or any securities
convertible into, or exchangeable for, shares of Common Stock for a
period of one year following the day on which the Underwriting Agreement
is executed without the prior written consent of the Representatives,
except shares of Common Stock disposed of as bona fide gifts or pledges
where the recipients of such gifts or the pledgees, as the case may be,
agree in writing with the Underwriters to be bound by the terms of this
letter.
If for any reason the Underwriting Agreement shall be terminated
prior to the Closing Date (as defined in the Underwriting Agreement),
the agreement set forth above shall likewise be terminated.
Yours very truly,
IES INVESTMENTS INC.
By: Lee Liu
Its: President
