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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
McLeod USA Incorporated
(Name of Issuer)
Class A Common Stock
(Title of Class of Securities)
582266 10 2
(CUSIP Number)
Dennis H. Melstad
370 West Anchor Drive, Suite 300
Dakota Dunes, SD 57049
605-232-5928
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
December 31, 1997
(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 the 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 ___. (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). <PAGE>
SCHEDULE 13D
CUSIP NO. 582266 10 2
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
MHC Investment Company, successor by merger to MWR Investments Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) X
(b)
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDING IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(E)
Not Applicable
6 CITIZENSHIP OR PLACE OF ORGANIZATION
South Dakota
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON
WITH
7 SOLE VOTING POWER
8,068,866 See Item 5
8 SHARED VOTING POWER
0 See Item 5
9 SOLE DISPOSITIVE POWER
8,068,866 See Item 5
10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
8,068,866 See Item 5
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROM (11) EXCLUDES CERTAIN
SHARES*
Not Applicable
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.1%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Item 1. Security and Issuer
This amendment relates to the Class A Common Stock, $.01 par value (the
"Class A Common Stock"), of McLeod USA Incorporated, a Delaware corporation (the
"Company"), whose principal executive offices are located at 6400 C Street,
S.W., P.O. Box 3177, Cedar Rapids, Iowa 52406-3177.
Item 2. Identity and Background
(a) - (c) This amendment is being filed by MHC Investment Company
("MHC"), a South Dakota corporation whose principal executive offices are
located at 370 West Anchor Drive, Suite 300, Dakota Dunes, South Dakota 50745.
MHC is the surviving entity of the merger between MHC and MWR Investments Inc.
("MWR") which became effective on September 3, 1997. MWR was the entity that
filed the original Schedule 13D concerning the holdings reported herein. The
principal business of MHC is to invest in, develop and/or manage investment and
financial business ventures.
(d) - (e) During the last five years, MHC 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.
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Item 3. Source and Amount of Funds or Other Consideration
On November 20, 1996, MWR purchased 357,143 shares of Class A Common
Stock for a purchase price of $28.00 per share in the November 1996 public
offering of Class A Common Stock by the Company (the "November 1996 Public
Offering") as described in Item 5 below. The funds used to purchase these shares
came from MWR's parent, MidAmerican Capital Company, a Delaware corporation, for
that specific purpose.
On June 13, 1997, MWR converted 6,905,472 shares of Class B Common
Stock, par value $0.001, into Class A Common Stock.
On October 29, 1997, MHC exercised options issued to MHC
representatives which serve on the Company's board of directors pursuant to the
Stockholders' Agreement described in Item 5 below for the purchase of 46,876
shares of Class A Common Stock. The exercise price paid to purchase these shares
came from MHC's parent, MidAmerican Capital Company, a Delaware corporation, for
that specific purpose.
Item 4. Purpose of Transaction
MHC has acquired the Class A Common Stock for investment purposes.
Subject to the restrictions on acquisition and disposition of Common Stock
existing under the Stockholders' Agreement discussed below, MHC may, from time
to time, depending upon market conditions and other factors deemed relevant by
MHC's management, acquire additional shares of Class A Common Stock, or sell or
other dispose of any or all of the shares of Common Stock currently held by MHC.
MHC has no other plans or proposals which relate to or would result in
any of the matters enumerated in paragraphs (a) through (j) of Item 4 of
Schedule 13D.
Item 5. Interest in Securities of the Issuer
(a) MHC beneficially owns a total of 8,068,866 shares of Class A Common
Stock, which represents approximately 13.1% of the shares of Class A Common
Stock outstanding as of October 31, 1997. The shares reported as beneficially
owned includes 9,375 shares of Class A Common Stock that MHC has the right to
purchase within 60 days pursuant to outstanding options. For this purpose, the
number of outstanding shares is based on the 61,572,248 shares of Common Stock
reported as outstanding as of October 31, 1997, in the Company's most recent
quarterly report on Form 10-Q.
MHC, together with former shareholders of Consolidated Communications
Inc., ("CCI") who acquired shares of Common Stock pursuant to an Agreement and
Plan of Reorganization dated as of June 14, 1997 by and among CCI, the Company
and Eastside Acquisition Company (collectively, the "Former CCI Shareholders"),
IES Investments Inc. ("IES"), Clark E. McLeod and Mary E. McLeod, (collectively,
the "Principal Stockholders"), are parties to a Stockholders' Agreement dated as
of June 14, 1997 and effective September 24, 1997, as amended by Amendment No. 1
to Stockholders' Agreement dated as of September 19, 1997 (together, the
"Stockholders' Agreement") and, accordingly, comprise a group within the meaning
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of Section 13(d)(3) of the Securities Exchange Act of 1934. Collectively,
insofar as is known to MHC, this group beneficially owns a total of 36,052,045
shares of Common Stock, which represents 58.6 percent of such estimated number
of shares of Common Stock outstanding on January 7, 1998. Information concerning
the holdings of the Principal Stockholders is based on the most recent Schedule
13D or Amendment thereto filed by such person. Reference is made to such filings
for further information as to such other Principal Stockholders.
(b) The number of shares of Class A Common Stock as to which MHC has
(i) sole power to vote or direct the vote 8,068,866
(ii) shared power to vote or direct the vote 0
(iii) sole power to dispose or direct the
disposition 8,068,866
(iv) shared power to dispose or direct the
disposition 0
(c) MWR purchased 357,143 shares of Class A Common Stock for a purchase
price of $28.00 per share on November 20, 1996, in the November 1996 Public
Offering.
MHC's predecessor contributed 300,000 shares of Class A Common Stock to
the MidAmerican Energy Foundation on May 27, 1997.
MWR converted 6,905,472 shares of Class B Common Stock, par value
$0.001, into Class A Common Stock on June 11, 1997.
MHC exercised options issued to MHC representatives which serve or have
served on the Company's board of directors pursuant to the Stockholders'
Agreement described in Item 5 above on October 29, 1997 for the purchase of
46,876 shares of Class A Common Stock.
MHC sold 250,000 shares of Class A Common Stock at average prices
ranging from a low of $32.37 to a high of $37.70 per share between December 15
and 31, 1997.
MHC has no information as to whether any of the other Principal
Stockholders has effected transactions in the 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.
MHC and each of the other Principal Stockholders and the Company have,
with respect to the respective shares of capital stock of the Company owned by
each such Principal Stockholder, entered into the Stockholders' Agreement,
effective September 24, 1997. The Stockholders' Agreement provides that each
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Principal Stockholder, for so long as such Principal Stockholder owns at least
10% of the outstanding capital stock of the Company (but in no event longer than
three years), shall vote such Principal Stockholder's stock and take all action
within its power to: (i) establish the size of the Board of Directors of the
Company at up to eleven directors; (ii) cause to be elected to the Board of
Directors of the Company one director designated by IES (for so long as IES 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 MHC
(for so long as MHC owns at least 10% of the outstanding capital stock of the
Company); (iv) cause Richard A. Lumpkin, a former CCI shareholder, to be elected
to the Board of Directors of the Company (for so long as Mr. Lumpkin and the
Former CCI Shareholders collectively own at least 10% of the outstanding capital
stock of the Company); (v) 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 (vi) cause to be
elected to the Board of Directors of the Company four non-employee directors
nominated by the Board of Directors of the Company.
The Stockholders' Agreement also provides that, for a period ending in
June 1999 and subject to certain exceptions, MHC will refrain from acquiring, or
agreeing or seeking to acquire, beneficial ownership of any securities issued by
the Company. In addition, the Stockholders' Agreement provides that, for the
period ending September 24, 1998, subject to certain exceptions, MHC (and all
other Principal 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. If the Company consents to any sale or other disposition by a party to
the Stockholders' Agreement, the other parties to the Stockholders' Agreement
(treating the Former CCI Shareholders as a single party for this purpose) are
permitted to sell or otherwise dispose of an equal percentage of the total
number of shares of Common Stock beneficially owned by such other party.
Likewise, if the Company grants a party to the Stockholders' Agreement an
opportunity to register Common Stock for sale under the Securities Act of 1933,
as amended, the Company will grant each other party (treating the Former CCI
Shareholders as a single party for this purpose) the opportunity to register a
corresponding percentage of such party's shares for transfer under the
Securities Act.
The foregoing description of the Stockholders' Agreement is qualified
in its entirety by reference to the Stockholders' Agreement filed as an exhibit
to this Schedule and incorporated herein by reference.
Item 7. Materials to be Filed as Exhibits.
Stockholders' Agreement dated as of June 14, 1997, among McLeodUSA
Incorporated, IES Investments Inc., Midwest Capital Group, Inc., MWR Investments
Inc., Clark E. McLeod, Mary E. McLeod and Richard A. Lumpkin on behalf of each
of the shareholders of Consolidated Communications Inc. listed on Schedule I of
the Stockholders' Agreement. (Filed on July 24, 1997 as Exhibit 4.12 to the
Company's Registration Statement on Form S-4, File No. 333-27647, and
incorporated herein by reference).
Amendment No. 1 to Stockholders' Agreement dated as of September 19, 1997 by and
among McLeodUSA Incorporated, IES Investments Inc., Midwest Capital Group, Inc.,
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MWR Investments Inc., Clark E. McLeod, Mary E. McLeod and Richard A. Lumpkin on
behalf of each of the shareholders of Consolidated Communications Inc. listed on
Revised Schedule I thereto. (Filed on November 14, 1997 as Exhibit 4.1 to the
Company's Quarterly Report for the quarter ended September 30, 1997 on Form
10-Q, Commission File No. 0-20763, and incorporated herein by reference).
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: January 7, 1998
MHC INVESTMENT COMPANY
By: /s/ Dennis H. Melstad
Dennis H. Melstad
President
