425 1 leccorp425.txt Under the Securities Act of 1933 And Deemed Filed Pursuant to Rule 14a-12 Under the Securities Exchange Act of 1934 Subject Company: US LEC Corp. Commission File No.: 0-24061 This filing relates to the proposed transactions pursuant to the terms of the Agreement and Plan of Merger, dated as of August 11, 2006, by and among US LEC Corp. ("US LEC"), PAETEC Corp. ("PAETEC"), WC Acquisition Holdings Corp., a direct wholly-owned subsidiary of PAETEC ("New PAETEC"), WC Acquisition Sub U Corp., a direct wholly-owned subsidiary of New PAETEC and WC Acquisition Sub P Corp., a direct wholly-owned subsidiary of New PAETEC.
US LEC Channel Link ----------------------------------------------- US LEC Agent Newsletter Fall 2006 Volume 3, Issue 1 -------------------------------------------------------------------------------------------- US LEC -> US LEC / PAETEC Merger voice / data /Internet Produced By: Page.........1 PHONE+ PAETEC AND US LEC TO COMBINE IN The Channel Partners -> Agent Event $1.3 BILLION TRANSACTION Conference & Expo Channel Partners Expo Page.........1 Merger Creates Premier Communications Provider to Enterprise Customers -> Feature Product Come Join US LEC at Disaster Preparedness the Channel Partners Page........2 Companies Expect Annual Cost Savings of Conference and Expo $40 Million, Adjusted EBITDA of $187 Million in Washington, DC! -> Peripheral Market and Free Cash Flow of$109 Million Update Page.........2 When: August 23-25, 2006 CHARLOTTE, NC and FAIRPORT, NY - -> Feature Product August 14, 2006 - US LEC Corp. Where: Omni Shoreham Hotel Data Back Up and Recovery (NASDAQ: CLEC), a full-service Page.........3 provider of IP, data and voice We look forward to spending time with solutions to businesses and our existing agents, as well as those -> Press Releases enterprise organizations throughout who are interested in marketing US US LEC Recent the Eastern United States, and LEC services to their current Press Releases PAETEC, a privately-held supplier of customer base. Channel Partners is Page.........4 communications solutions to medium always a great show! and large businesses and -> Training Reminders institutions, announced today that Thank you for your continued efforts Page.........4 they have signed a definitive as an agent with US LEC! agreement to merge the two companies. o o o o o US LEC On a pro forma basis, the company voice / data /Internet will generate nearly $1 billion in revenue, $187 million in adjusted Morrocroft III EBITDA, and $109 million in free cash 6801 Morrison Blvd. flow (adjusted EBITDA minus capital Charlotte, NC 28211 expenditures). Cost saving synergies 704.319.1000 of $25 million have been identified www.uslec.com in the first year after closing, and $40 million annually beginning in 2008. The combined company will have over 45,000 enterprise customers, consisting of medium and large businesses and institutions. It will operate in 52 of the top 100 Metropolitan Service Areas (MSAs) in the U.S., with a leading presence in the Eastern Continued on page 3 ============================================================================================= Page 1 Fall 2006 US LEC Channel Link Feature Product: PVC Redirect: Allows you to enhance the Disaster Preparedness inherent reroute capabilities of Frame Relay by instituting redirection plans to a When disaster strikes, how you plan for it secondary location within your network can save your business. Planning for a ensuring recovery from host or centralized disaster is critical, but planning the site disaster. With this solution, a large logistics of recovery is just as vital. number of sites may access an alternate backup host location automatically. Data Backup and Recovery: Provides your business with an automated off-site server Dedicated Server: Allows you to locate your backup solution that securely copies critical servers and applications in one of two data to two separate data centers over your carrier-grade data centers, with secure and Internet connection every day. Our Data fully managed facilities along with generator Backup & Recovery solution is as simple as backup and environmental controls. "point & click" from the US LEC-provided control console, allowing you to restore data Conferencing: US LEC Conferencing gives you on-demand from any day in your retention the freedom to keep employees up-to-date in period. times of crisis, liaise with vendors, partners and suppliers no matter your US LEC Protect: A disaster recovery location - and call meetings without having application for your voice services using a to worry about bothersome reservation combination of US LEC products, including requirements. Your conference room is ready Call Forward Trunks to POTS, Call Forward for you, whenever you are ready to use it. Variable (CFV) and Remote Access to Call Flexibility is critical in times of disaster, Forward. US LEC gives you the power to adapt. PowerVIEWSM Toll Free Re-route: o o o o o Allows you to change the ring-to destination on your basic US LEC toll free numbers online by using US LEC PowerVIEW, our Web-based account management system for selected products. You have 24-hour access to re-route your toll free calls to an alternate destination in a disaster situation or simply to balance your ---------------------------------------------- call flow. With Toll Free Customer | Peripheral Markets: | Emergency Re-routing, you can | | re-route your 8XX number(s) to a | New peripheral markets launched since | pre-determined alternative telephone | November 2005 include: | number by contacting US LEC Customer | | Care. | o Horry Tel | | o North Pittsburgh Tel | Toll Free Trunk Group Overflow: Used when | | your trunk group is busy or does not answer. | Peripheral markets in development include: | Trunk Group Overflow routes calls to an | | alternate terminating trunk group if the | o Dalton, GA | intended terminating trunk group is busy or | | out of service. ---------------------------------------------- E-mail Spooling: A robust solution designed to protect against e-mail server failures caused by power outages or disaster circumstances that damage or destroy servers - even a spilled cup of coffee. E-mail Spooling allows you, whether you subscribe to US LEC E-mail Service or maintain your own e-mail server(s), to assure continuity of e-mail receipt. =================================================================================================================== Fall 2006 US LEC Channel Link US LEC/PAETEC Merger... Continued from page 1 Feature Product: U.S., as well as several other major markets Data Back Up and Recovery across the country. Do you know the price of lost data? US LEC hopes you won't have to find out. But we do TRANSACTION TERMS AND STRUCTURE understand that data can be lost and your Under the terms of the merger agreement, users have a growing demand for the fastest which was approved unanimously by the boards possible restoration, while regulatory of directors of both companies, PAETEC and US requirements add to the need to ensure your LEC will become wholly-owned subsidiaries of data is available for years. a new publicly owned holding company ("New PAETEC"). Based on US LEC's closing stock price on August 11, 2006, the total Why Back up Data? enterprise value of the new company will be approximately $1.3 billion. Upon completion o Regulatory and governmental requirements - of the transaction, "New PAETEC" expects to HIPAA, GLBA, Sarbanes-Oxley be listed on the NASDAQ Stock Market under o Business requirement the ticker "CLEC." o Malicious vandalism of data o Accidental deletion or corruption COMPANY LEADERSHIP AND HEADQUARTERS o Failure of server hardware or software Upon the close of the transaction, Arunas o Acts of God - natural disaster Chesonis will become Chairman and Chief Executive Officer of the combined company, US LEC Offers a Complete Solution That Includes: and Richard Aab will become Vice Chairman. Keith Wilson, Chief Financial Officer of o Windows, Linux and Unix servers PAETEC, will become Chief Financial Officer o Online, on-demand restoration of the combined company, and EJ Butler, o Disk-based storage, not tape current PAETEC Chief Operating Officer, will o All software and hardware provided become Chief Operating Officer. J. Lyle o Daily, off-site back up Patrick, Chief Financial Officer of US LEC, o Professionally guided installation will lead the integration efforts as Executive Vice President of Integration. The Our data recovery is as simple as "point & combined company will be headquartered in click" from the US LEC-provided control Fairport, NY, and will maintain US LEC's console, allowing you to restore data operations in Charlotte, NC, with significant on-demand from any day in your retention operations in the Eastern corridor and a period. In the event of a disaster, you can significant presence in several other markets restore data to an alternate site online or throughout the country, including Chicago and US LEC can ship a mobile data vault to along the West Coast. anywhere in the continental U.S. the same day you request it. About PAETEC PAETEC is an innovative supplier of By letting US LEC manage your critical data communications solutions to medium and large backup, you can rest assured that your data businesses and institutions. With the belief will "be there" when you need it; no tapes to that every customer has unique needs, PAETEC rotate, no couriers to deal with and no offers personalized solutions that include a delays for data restoration. comprehensive suite of Voice over Internet Protocol (VoIP) services delivered over our Our network, from end to end, is supported Private-IP MPLS network. With more than and monitored 24 x 7 x 365 in our four 1,000,000 access line equivalents in service, Network Operations Centers, so you can rest PAETEC serves more than 17,000 core business assured knowing your business is getting the customers across the U.S. by offering a full attention it deserves. Whatever your needs line of telecommunications and Internet are, we are there for you. services, enterprise communications management software, security solutions, and Click here to learn more about what US LEC managed services. The company was the Data Backup & Recovery has to offer! recipient of the 2005 American Business Ethics Award for a mid-size company, o o o o o presented by the Society of Financial Services Professionals. PAETEC is headquartered in Fairport, N.Y. More information about the company can be found by visiting www.PAETEC.com. o o o o o ============================================================================================================================= Fall 2006 US LEC Channel Link ------------------------------------------------------ ---------------------------------------------- | Press Releases | | Product Training Reminder | | June - August 2006 | |----------------------------------------------| | | | | | Aug 14 2006 PAETEC AND US LEC TO COMBINE | | New Agent Training | | IN $1.3 BILLION TRANSACTION | | | | | | September 12th, 2006 3:00PM - 4:00PM EST | | | | October 17th, 2006 3:00PM - 4:00PM EST | | Aug 14 2006 US LEC ANNOUNCES SECOND | | November 14th, 2006 3:00PM - 4:00PM EST | | QUARTER 2006 RESULTS WITH | | | | $106.7 MILLION IN REVENUE AND | | Register by sending an e-mail to: | | ADJUSTED EBITDA OF OVER $15.0 | | agents@uslec.com | | MILLION | | | | | | | | | |----------------------------------------------| | Aug 10 2006 US LEC SETTLES CARRIER | | | | DISPUTE | | Agent Product Training | | | | | | | | Ethernet Local Loop | | Aug 8 2006 US LEC CORP. TO BROADCAST | | August 29th, 2006 3:00PM - 4:00PM EST | | SECOND QUARTER 2006 CONFERENCE | | | | CALL LIVE ON THE INTERNET | | Dynamic T - BIG Voice / BIG Data / | | | | MPLS VPN | | | | September 21st, 2006 3:00PM - 4:00PM EST | | Aug 7 2006 US LEC GROWS CUSTOMER BASE, | | | | MAINTAINS INDUSTRY-LEADING | | Conferencing | | RETENTION RATE | | October 26th, 2006 3:00PM - 4:00PM EST | | | | | | | | Register by sending an e-mail to: | | Jul 13 2006 SUNROCKET CHOOSES MEGAPOP | | agents@uslec.com | | VOIP FROM US LEC | | | | | |----------------------------------------------| | | | Jul 10 2006 US LEC CONTINUES ETHERNET | | MARCH WITH BALTIMORE | | DEPLOYMENT | "The golden rule for every | | business man is this: | | Put yourself in your | | customer's place" | Jun 28 2006 US LEC EXPANDS IP-BASED | | DATA NETWORKING SERVICE | | ACROSS S.C. LOWCOUNTRY | --------------------------------------------- | | | | | | | Have a Good US LEC | | Jun 14 2006 US LEC APPOINTS ENGEL VICE | | Channel Link Agent | | PRESIDENT OF HUMAN RESOURCES | | Success Story? | | | | | | | | We'd love to hear from you! Send us | | Jun 7 2006 US LEC Presents at the | | your story to be considered in the next | | Deutsche Bank Securities, Inc. | | issue of the US LEC Channel Link | | 14th Annual Media/Telecom | | Newsletter. | | Conference | | | | | | agents@uslec.com | ------------------------------------------------------ | ---------------- | | | | | -------------------------------------------- ------------------------------------------------------------------------------- | If you have any questions or comments about this issue of the | | US LEC Channel Link Newsletter, please contact us at: agents@uslec.com | ------------------------------------------------------------------------------- =============================================================================================================================
Forward-Looking Statements This communication, and other statements that US LEC or PAETEC may make, may contain forward-looking statements, which involve a number of risks and uncertainties. US LEC cautions readers that any forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information. Such forward-looking statements include, but are not limited to, statements about the benefits of the business combination transaction involving US LEC and PAETEC, including future financial and operating results, New PAETEC's plans, objectives, expectations and intentions and other statements that are not historical facts. Important factors that could cause actual results to differ materially from those indicated by such forward-looking statements are set forth in US LEC's filings with the Securities and Exchange Commission. These include risks and uncertainties relating to: the ability to obtain regulatory approvals of the transaction on the proposed terms and schedule; the risk that the businesses will not be integrated successfully; the risk that the cost savings and any other synergies from the transaction may not be fully realized or may take longer to realize than expected; disruption from the transaction making it more difficult to maintain relationships with customers, employees or suppliers; competition and its effect on pricing, spending, third-party relationships and revenues; the need to develop new products and adapt to significant technological change; implementation of strategies for improving internal growth; realization of potential future savings from new productivity initiatives; dependence on customers that operate in cyclical industries; general worldwide economic conditions and related uncertainties; and the effect of changes in governmental regulations. US LEC undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional Information About this Transaction New PAETEC will file with the Securities and Exchange Commission a registration statement that will contain a proxy statement/prospectus regarding the proposed merger transaction between US LEC and PAETEC, as well as other relevant documents concerning the proposed transaction. Investors and security holders of US LEC are urged to read the proxy statement/prospectus for the transaction and the other relevant documents when they become available because they will contain important information about US LEC, PAETEC and New PAETEC, and the proposed merger transaction. The proxy statement/prospectus will be mailed to stockholders of US LEC prior to their stockholder meeting. Investors and security holders of US LEC may obtain free copies of the proxy statement/prospectus and other documents filed by New PAETEC with the Securities and Exchange Commission (when they become available) at the Securities and Exchange Commission's web site at http://www.sec.gov and may also obtain free copies of the proxy statement (when it becomes available) by writing to US LEC Corp., Morrocroft III, 6801 Morrison Boulevard, Charlotte, North Carolina 28211, Attention: Investor Relations or by telephoning us at (704) 319-1189. Information regarding the identity of persons who may, under the Securities and Exchange Commission's rules, be deemed to be participants in the solicitation of stockholders of US LEC in connection with the proposed transactions, and their interests in the solicitation, will be set forth in the proxy statement that will be filed by US LEC with the Securities and Exchange Commission and contained in the registration statement that will be filed by New PAETEC with the Securities and Exchange Commission. This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.