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EXHIBIT 10.3

                    THIRD AMENDED AND RESTATED

               JANUARY 1999 STOCKHOLDERS' AGREEMENT

           This   Third   Amended   and   Restated   January   1999
Stockholders'  Agreement  (this  "Agreement") is entered into as of
March 10,  2000, by and among  McLeodUSA  Incorporated,  a Delaware
corporation  (the  "Company");   Alliant  Energy   Corporation,   a
Wisconsin  corporation ("AEC");  Alliant Energy Investments,  Inc.,
an Iowa  corporation  and indirect  wholly owned  subsidiary of AEC
("AEI");  Heartland  Properties,  Inc., a Wisconsin corporation and
indirect   wholly   owned   subsidiary   of   AEC    ("Heartland");
LNT Communications  LLC,  an Iowa  limited  liability  company  and
indirect  wholly owned  subsidiary of AEC ("LNT");  Alliant  Energy
Foundation,  Inc., a Wisconsin corporation  (non-profit) ("AEF" and
together  with AEC, AEI,  Heartland  and LNT, the "AEC  Entities");
Clark E. McLeod  ("McLeod");  Mary E. McLeod (together with McLeod,
the  "McLeods");   M/C  Investors   L.L.C.,   a  Delaware   limited
liability   company   ("M/C    Investors");    Media/Communications
Partners III Limited  Partnership,  a Delaware limited  partnership
("M/C   Partners"  and  together  with  M/C  Investors,   the  "M/C
Stockholders");  Richard A. Lumpkin  ("Lumpkin") and certain of the
former  shareholders of Consolidated  Communications  Inc.  ("CCI")
and  certain  permitted  transferees  of  certain of the former CCI
shareholders  in each  case who are  listed  in  Schedule  I hereto
(the  "Principal CCI  Shareholders");  and for purposes of Sections
4, 5.6,  5.8(d),  5.11 and the first  sentence of Section 5.3 only,
certain  of  the  other   former  CCI   shareholders   and  certain
permitted   transferees   of  certain  of  the  other   former  CCI
shareholders  in each  case who are  listed in  Schedule  II hereto
(the "Other CCI  Shareholders").  The AEC  Entities,  the  McLeods,
Lumpkin and the Principal CCI  Shareholders  are referred to herein
collectively  as the "Original  Stockholders"  and  individually as
an "Original Stockholder."

           WHEREAS,  the Company,  AEC,  AEI,  Heartland,  AEF, the
McLeods,   the  M/C  Stockholders,   Lumpkin,   the  Principal  CCI
Shareholders  and the  Other  CCI  Shareholders  are  parties  to a
Second Amended and Restated January 1999  Stockholders'  Agreement,
entered  into as of  December 17,  1999 (the  "Second  Amended  and
Restated January 1999 Stockholders' Agreement");

           WHEREAS,  the Company,  AEC,  AEI,  Heartland,  AEF, the
McLeods,  the  M/C  Stockholders,  Lumpkin  and the  Principal  CCI
Shareholders  desire to add LNT as a party to this  Agreement  as a
result of the transfer of certain  shares of the Company's  Class A
common  stock,  par  value  $.01  per  share  (the  "Class A Common
Stock"), by an Affiliate (as defined in Section 2.2) of AEC to LNT;

           WHEREAS,  the Other CCI  Shareholders  no longer desire
to  be  parties  to  this  Agreement  and  the  Company,  the  M/C
Stockholders  and the  Original  Stockholders  desire to terminate
the Other CCI Shareholders as parties to this Agreement;

           WHEREAS, the Company, the Original  Stockholders and the
M/C  Stockholders  deem  it to be in  the  best  interests  of  the
Company  and its  stockholders  to provide for the  continuity  and
stability  of the  business  and  policies  of the  Company  on the
terms and conditions hereinafter set forth;

           WHEREAS,  concurrently  with  execution  and delivery of
this  Agreement,  the Company,  the Original  Stockholders  and the
Other  CCI   Shareholders   are  entering  into  an  amendment  and
restatement  of  the  Second  Amended  and  Restated  November 1998
Stockholders' Agreement, entered into as of December 17, 1999; and

           WHEREAS, the Company, the Original  Stockholders and the
M/C  Stockholders  desire to amend and restate  the Second  Amended
and Restated January 1999  Stockholders'  Agreement in its entirety
with the terms and conditions hereinafter set forth;

           NOW,   THEREFORE,   for  and  in  consideration  of  the
foregoing  and of the mutual  covenants  and  agreements  contained
herein, the parties hereto agree as follows:

1.    [INTENTIONALLY DELETED]

2.    VOTING AGREEMENT

      2.1  Board of Directors

      For the period  commencing on the Effective  Date (as defined
in Section  2.2) and ending on the  Expiration  Date (as defined in
Section 2.2), each Original  Stockholder and the M/C  Stockholders,
for  so  long  as  each  such  Original  Stockholder  and  the  M/C
Stockholders  beneficially  and  continuously  owns  at  least  two
million  five  hundred  thousand  (2,500,000)  shares  of  Class  A
Common  Stock,  subject to  adjustment  pursuant  to  Section  5.1,
shall  take or cause  to be taken  all  such  action  within  their
respective power and authority as may be required:

     (a)  to  establish  and  maintain  the  authorized  size  of the  Board  of
          Directors of the Company (the "Board of  Directors" or the "Board") at
          up to thirteen (13) directors;

     (b)  to cause to be elected to the Board one (1) director designated by the
          AEC   Entities,   for  so  long  as  the  AEC  Entities   collectively
          beneficially  and  continuously  own at least two million five hundred
          thousand  (2,500,000)  shares  of Class A  Common  Stock  (subject  to
          adjustment pursuant to Section 5.1);

     (c)  to cause  Lumpkin to be  elected to the Board,  for so long as Lumpkin
          and the  Principal  CCI  Shareholders  collectively  beneficially  and
          continuously   own  at  least  two  million  five   hundred   thousand
          (2,500,000)  shares of Class A Common  Stock  (subject  to  adjustment
          pursuant to Section 5.1);

     (d)  to cause to be  elected  to the  Board  three  (3)  directors  who are
          executive officers of the Company designated by McLeod, for so long as
          the McLeods  collectively  beneficially  and continuously own at least
          two million five hundred thousand (2,500,000) shares of Class A Common
          Stock (subject to adjustment pursuant to Section 5.1);

     (e)  to cause to be elected to the Board one (1) director designated by the
          M/C  Stockholders,  for so long as the M/C  Stockholders  collectively
          beneficially  and  continuously  own at least two million five hundred
          thousand  (2,500,000)  shares  of Class A  Common  Stock  (subject  to
          adjustment pursuant to Section 5.1);

     (f)  to cause to be elected to the Board a director or directors  nominated
          by the Board to replace a director or directors designated pursuant to
          paragraphs  (b)  through  (e) above upon the  earlier to occur of such
          designated director's or directors' resignation (and the acceptance of
          such  resignation by the Board) and the expiration of such  director's
          or directors'  term as a result of any party or parties  identified in
          paragraphs (b) through (e) above no longer  collectively  beneficially
          and  continuously  owning at least two million five  hundred  thousand
          (2,500,000)  shares of Class A Common  Stock  (subject  to  adjustment
          pursuant to Section 5.1) at any time during the period  commencing  on
          the  Effective  Date  and  ending  on the  Expiration  Date;  it being
          understood  that within three (3) business  days  following  such time
          that the party or parties  identified  in  paragraphs  (b) through (e)
          above no longer  collectively  beneficially  and  continuously  own at
          least two million five hundred thousand  (2,500,000) shares of Class A
          Common Stock  (subject to  adjustment  pursuant to Section 5.1) during
          such period,  such party or parties shall use its or their  respective
          best  efforts to cause the director or  directors  designated  by such
          party or parties to tender their  immediate  resignation  to the Board
          which the Board may accept or reject; and

     (g)  to cause to be elected to the Board, if and as nominated by the Board,
          up to seven (7) non-employee directors.

           For purposes of this Section 2.1, (i) the McLeods  shall
be  deemed  to be a single  Original  Stockholder  of the  Company,
(ii)  the  M/C  Stockholders   shall  be  deemed  to  be  a  single
stockholder  of the  Company,  and the M/C  Stockholders  shall  be
deemed to own  shares  "continuously"  as long as the shares of the
M/C  Stockholders  are  owned  by the  M/C  Stockholders  or an M/C
Stockholder  Permitted  Transferee  (as  defined in  Section  3.1),
(iii) Lumpkin and all of the Principal  CCI  Shareholders  shall be
deemed to be a single  Original  Stockholder  of the  Company,  and
the  Principal  CCI  Shareholders  shall be  deemed  to own  shares
"continuously"   as  long  as  the  shares  of  the  Principal  CCI
Shareholders  are owned by the Principal CCI  Shareholders or a CCI
Permitted   Transferee   (as  defined  in  the  Third  Amended  and
Restated  November  1998  Stockholders'  Agreement  (as  defined in
Section  2.2)),  and (iv) the AEC Entities  shall be deemed to be a
single  Original  Stockholder of the Company,  and the AEC Entities
shall  be  deemed  to own  shares  "continuously"  as  long  as the
shares  of the AEC  Entities  are owned by the AEC  Entities  or an
AEC  Permitted  Transferee  (as  defined in the Third  Amended  and
Restated November 1998 Stockholders' Agreement).

      2.2  Definitions
           For  purposes of this  Agreement,  the  following  terms
have the meanings indicated:

                (a)  "Affiliate"  and  "Associate"  shall  have the
                respective  meanings ascribed to such terms in Rule
                12b-2 under the  Securities  Exchange  Act of 1934,
                as amended (the "Exchange Act").

                (b)  A  person  shall  be  deemed  the  "beneficial
                owner"  of and  shall be  deemed  to  "beneficially
                own" any securities:

                    (i) which such  person or any of such  person's
                        Affiliates  or   Associates,   directly  or
                        indirectly,   has  the  right  to   acquire
                        (whether   such   right   is    exercisable
                        immediately  or only  after the  passage of
                        time)    pursuant    to   any    agreement,
                        arrangement  or  understanding  (whether or
                        not in  writing),  or upon the  exercise of
                        conversion rights,  exchange rights,  other
                        rights, warrants or options, or otherwise;

                    (ii)which such  person or any of such  person's
                        Affiliates  or   Associates,   directly  or
                        indirectly,   has  the  right  to  vote  or
                        dispose  of or has  "beneficial  ownership"
                        of (as  determined  pursuant  to Rule 13d-3
                        under   the   Exchange   Act),    including
                        pursuant to any  agreement,  arrangement or
                        understanding,  whether or not in  writing;
                        or

                    (iii) which are  beneficially  owned,  directly
                        or indirectly,  by any other person (or any
                        Affiliate or Associate  thereof) with which
                        such   person  or  any  of  such   person's
                        Affiliates    or    Associates    has   any
                        agreement,   arrangement  or  understanding
                        (whether  or  not  in  writing),   for  the
                        purpose of  acquiring,  holding,  voting or
                        disposing of any voting  securities  of the
                        Company.

                For  purposes  of  the  definition  of  "beneficial
                owner"   and   "beneficially    own,"   the   terms
                "agreement,"   "arrangement"  and   "understanding"
                shall  not  include  this  Agreement  or the  Third
                Amended and Restated  November  1998  Stockholders'
                Agreement.

                (c)  "Effective Date" shall mean March 10, 2000.

                (d)  "Expiration   Date"  shall  mean  December 31,
                2001.

                (e)  "Merger"  shall  mean the  merger  of  Ovation
                Communications,    Inc.   with   and   into   Bravo
                Acquisition  Corporation  pursuant to the terms and
                conditions of the Merger Agreement.

                (f)  "Merger  Agreement"  shall mean the  Agreement
                and Plan of  Merger,  dated as of  January 7, 1999,
                by  and  among  the  Company,   Bravo   Acquisition
                Corporation,   Ovation  Communications,   Inc.  and
                certain    of   the    stockholders    of   Ovation
                Communications, Inc.

                (g)  "Stock   Split"   shall   mean  that   certain
                two-for-one  stock  split  in the  form  of a stock
                dividend paid on July 26, 1999 to  stockholders  of
                record on  July 12,  1999  effected  by the Company
                with respect to its Class A Common Stock.

                (h)  "Third  Amended  and  Restated  November  1998
                Stockholders'   Agreement"  shall  mean  the  Third
                Amended and Restated  November  1998  Stockholders'
                Agreement,  entered  into as of  March 10,  2000 by
                and among the Company,  the  Original  Stockholders
                and the Other CCI Shareholders.

3.    TRANSFERS OF SECURITIES

      3.1  Restrictions on Transfers

           (a)  Except as  otherwise  provided in this  Section 3.1
or Section  3.2, the M/C  Stockholders  hereby agree that until the
Expiration  Date,  the  M/C  Stockholders  will  not  offer,  sell,
contract  to sell,  grant any  option  to  purchase,  or  otherwise
dispose  of,  directly  or  indirectly,  ("Transfer"),  any  equity
securities  of the  Company  or any  other  securities  convertible
into or  exercisable  for  such  equity  securities  ("Securities")
beneficially  owned by such  M/C  Stockholders  as a result  of the
Merger  (including  distributions  of  Securities  with  respect to
such  Securities  and  Securities  acquired  as a result of a stock
split  with  respect  to  such  Securities)  without  submitting  a
written  request to, and receiving  the prior  written  consent of,
the  Board  of   Directors;   provided,   however,   that  the  M/C
Stockholders  may transfer  Securities to any  beneficial  owner or
Affiliate of the M/C  Stockholders,  in each case provided that (i)
such   transfer   is  done  in   accordance   with   the   transfer
restrictions  applicable  to  such  Securities  under  federal  and
state  securities  laws and (ii) the transferee  agrees to be bound
by the terms  hereof (as this  Agreement  may be amended or amended
and  restated  from  time  to  time)  as an  M/C  Stockholder  with
respect to the shares  being  transferred  pursuant to this Section
(any such M/C  Stockholder  transferee  pursuant  to the  foregoing
proviso, an "M/C Stockholder Permitted  Transferee"),  and any such
transfer  shall not  constitute a  "Transfer"  for purposes of this
Agreement.  Notwithstanding  the  foregoing,  no party hereto shall
avoid  the  provisions  of this  Agreement  by  making  one or more
transfers  to one or more  M/C  Stockholder  Permitted  Transferees
and then at any time  directly or  indirectly  disposing  of all or
any portion of such  party's  interest in any such M/C  Stockholder
Permitted  Transferee.  In the event  that the  Board of  Directors
consents to any Transfer of Securities  by a Principal  Stockholder
(for purposes of this Agreement,  the term "Principal  Stockholder"
shall have the same  meaning as  ascribed to such term in the Third
Amended  and  Restated  November  1998   Stockholders'   Agreement)
pursuant  to  Section  3.1(a) of the  Third  Amended  and  Restated
November 1998  Stockholders'  Agreement upon the written request of
such   Principal    Stockholder   (the   "Transferring    Principal
Stockholder")  and except as otherwise  provided in Section  3.1(b)
and  Section 3.2 of this  Agreement,  the M/C  Stockholders  shall,
notwithstanding  the  provisions of this Section  3.1(a),  have the
right to Transfer a percentage  of the total  number of  Securities
beneficially   owned   by  the  M/C   Stockholders   equal  to  the
percentage  of the total number of  Securities  beneficially  owned
by  the  Transferring  Principal  Stockholder  that  the  Board  of
Directors  has consented may be  Transferred  by such  Transferring
Principal  Stockholder.   In  the  event  the  Board  of  Directors
consents to any  Transfer  of  Securities  by the M/C  Stockholders
pursuant to this  Section  3.1(a)  upon the written  request of the

M/C  Stockholders  (the  "Transferring  M/C   Stockholders"),   and
except as otherwise  provided in Section  3.1(b) and Section 3.2 of
the  Third  Amended  and  Restated   November  1998   Stockholders'
Agreement,  each Principal  Stockholder shall,  notwithstanding the
provisions  of Section  3.1(a) of the Third  Amended  and  Restated
November 1998 Stockholders'  Agreement,  have the right to Transfer
a percentage of the total number of Securities  beneficially  owned
by  such  Principal  Stockholder  equal  to the  percentage  of the
total number of Securities  beneficially  owned by the Transferring
M/C  Stockholders  that the Board of Directors has consented may be
Transferred by such Transferring M/C Stockholders.

           (b)  In addition to the  provisions  of Section  3.1(a),
for the period  commencing  for the quarter ending  March 31,  2000
and  ending  on the  Expiration  Date,  the Board  shall  determine
prior  to  the  public   release  of  the  Company's   consolidated
financial  results  with respect to each such  financial  reporting
quarter  during  such  period,  the  aggregate  number,  if any, of
shares of Class A Common  Stock  (not to  exceed  in the  aggregate
one hundred  thousand  (100,000) shares of Class A Common Stock per
quarter,  subject to  adjustment  pursuant to Section 5.1) that may
be Transferred  by the M/C  Stockholders  (the  "Transfer  Amount")
during the period  commencing  on the third (3rd)  business day and
ending on the  twenty-third  (23rd)  business  day  following  such
public  release  of the  Company's  quarterly  or annual  financial
results or such other  trading  period  designated  or permitted by
the Board with respect to the  purchase and sale of its  Securities
(each  such  period,  a  "Transfer  Period").  Notwithstanding  the
provisions  of  Section  3.1(a),  the  M/C  Stockholders  shall  be
entitled to Transfer  during each  Transfer  Period,  provided such
Transfer is  effected in  accordance  with all  applicable  federal
and  state  securities  laws,  a number of shares of Class A Common
Stock  equal to the  Transfer  Amount,  if any,  for such  Transfer
Period.  In no event  shall any  portion of a Transfer  Amount that
is not utilized by the M/C  Stockholders  during a Transfer  Period
be  reallocated or otherwise  credited to any  subsequent  Transfer
Periods.   Notwithstanding   the   foregoing   provisions  of  this
Section  3.1(b),  to  the  extent  that  the  Company  permits  the
Principal  Stockholders  the  opportunity  to  Transfer  shares  of
Class A Common  Stock  pursuant  to  Section  3.1(b)  of the  Third
Amended and Restated  November 1998  Stockholders'  Agreement,  the
Company  shall  grant  the  M/C  Stockholders  the  opportunity  to
Transfer  on the same  terms and  conditions  a number of shares of
Class A Common  Stock  equal to the  number  of shares  which  each
Principal  Stockholder  is entitled  to  Transfer  pursuant to such
Section 3.1(b),  without  considering  those  provisions of Section
3.1(b)  of  the  Third   Amended   and   Restated   November   1998
Stockholders'  Agreement  relating to the  reallocation  of amounts
among  the  Principal   Stockholders.   To  the  extent  the  Board
determines a Transfer  Amount with respect to the M/C  Stockholders
for any particular  quarter  pursuant to this Section  3.1(b),  the
Board shall  determine  an equal  Transfer  Amount for such quarter
with  respect to each  Principal  Stockholder  pursuant  to Section
3.1(b)  of  the  Third   Amended   and   Restated   November   1998
Stockholders' Agreement.

           (c) For the period  commencing  for the  quarter  ending
March 31,  2000 and  ending on the  Expiration  Date,  the  Company
shall  give the M/C  Stockholders  prompt  written  notice  (in any
event no later than fifty (50) days prior to the  beginning  of the
applicable  Transfer  Period) of its  determination of any Transfer
Amount.  Within seven (7) days of receipt of such  notice,  the M/C
Stockholders  shall  provide  written  notice to the Company of the
number   of  shares   of  Class  A  Common   Stock   that  the  M/C
Stockholders desire to Transfer pursuant to Section 3.1(b).

           (d) For   purposes  of  this   Section   3.1,   the  M/C
Stockholders  shall be  deemed  to be a single  stockholder  of the
Company,  the  McLeods  shall be  deemed  to be a single  Principal
Stockholder  of the Company,  Lumpkin and all of the  Principal CCI
Shareholders  shall be deemed to be a single Principal  Stockholder
of the  Company  and the  AEC  Entities  shall  be  deemed  to be a
single Principal Stockholder of the Company.

      3.2  Registration Rights

           (a)  In the event that the Board of  Directors  consents
pursuant  to  Section  3.1(a) of the  Third  Amended  and  Restated
November    1998    Stockholders'    Agreement   to   a   Principal
Stockholder's  request for a Transfer and in connection  therewith,
the Company  agrees to  register  Securities  with  respect to such
Transfer  under  the  Securities  Act  of  1933,  as  amended  (the
"Securities  Act"),  the Company  shall grant the M/C  Stockholders
the  opportunity  (subject to reduction in the event the registered
Transfer  is  underwritten)  to  register  for  Transfer  under the
Securities  Act a  percentage  of the total  number  of  Securities
beneficially   owned   by  the  M/C   Stockholders   equal  to  the
percentage  of the total number of  Securities  beneficially  owned
by the Transferring  Principal  Stockholder that such  Transferring
Principal   Stockholder  is  registering  for  Transfer  under  the
Securities   Act,  on  the  same  terms  and   conditions   as  the
Transferring  Principal  Stockholder.  In the event  that the Board
of  Directors   consents   pursuant  to  Section   3.1(a)  of  this
Agreement to the M/C Stockholders'  request for a Transfer,  and in
connection  therewith  the Company  agrees to  register  Securities
with  respect  to such  Transfer  under  the  Securities  Act,  the
Company  shall  grant  each  Principal   Stockholder   pursuant  to
Section  3.1(a) of the Third  Amended and  Restated  November  1998
Stockholders'  Agreement the  opportunity  (subject to reduction in
the event the  registered  Transfer  is  underwritten)  to register
for Transfer  under the  Securities  Act a percentage  of the total
number  of  Securities   beneficially   owned  by  such   Principal
Stockholder  equal  to  the  percentage  of  the  total  number  of
Securities    beneficially    owned   by   the   Transferring   M/C
Stockholders   that  such   Transferring   M/C   Stockholders   are
registering  under  the  Securities  Act,  on the  same  terms  and
conditions as the Transferring M/C Stockholders.

           (b)  To the extent that the Company  grants  pursuant to
Section  3.1(b) of the Third  Amended and  Restated  November  1998
Stockholders'  Agreement a Principal  Stockholder  the  opportunity
to register  shares of Class A Common Stock for Transfer  under the
Securities  Act, the Company shall grant the M/C  Stockholders  the
opportunity  (subject  to  reduction  in the event  the  registered
Transfer is  underwritten)  to  register an equal  number of shares
of Class A Common Stock for Transfer  under the  Securities  Act on
the  same  terms  and   conditions,   without   considering   those
provisions  of Section  3.1(b) of the Third  Amended  and  Restated
November   1998    Stockholders'    Agreement   relating   to   the
reallocation  of amounts among the Principal  Stockholders.  To the
extent that the Company  grants  pursuant to Section 3.1(b) of this
Agreement the M/C  Stockholders  the opportunity to register shares
of Class A Common  Stock for  Transfer  under the  Securities  Act,
the Company  shall  grant each  Principal  Stockholder  pursuant to
Section  3.1(b) of the Third  Amended and  Restated  November  1998
Stockholders'  Agreement the  opportunity  (subject to reduction in
the event the registered  Transfer is  underwritten) to register an
equal number of shares of Class A Common  Stock for Transfer  under
the Securities Act on the same terms and conditions.

           (c)  In the event the Company  proposes to register  any
shares of Class A Common  Stock under the  Securities  Act pursuant
to an  underwritten  primary  offering  (other  than  pursuant to a
registration  statement  on Form S-4 or Form  S-8 or any  successor
forms  thereto or other form which  would not permit the  inclusion
of the  shares  of Class A Common  Stock of the M/C  Stockholders),
the Company,  as determined  by the Board of Directors,  shall give
written notice to the M/C  Stockholders  of its intention to effect
such a  registration.  Following  any  such  notice,  the  Board of
Directors  shall  undertake to determine the aggregate  number,  if
any,   of  shares  of  Class  A  Common   Stock  held  by  the  M/C
Stockholders  (not to exceed in the  aggregate  on a per year basis
a  number  of  shares  of  Class A Common  Stock  equal to  fifteen
percent  (15%) of the  total  number  of  shares  of Class A Common
Stock  beneficially  owned  by  the  M/C  Stockholders  as  of  the
Effective  Time (as defined in the Merger  Agreement) in connection
with the  consummation  of the Merger,  subject to appropriate  and
proportionate  adjustment  as a  result  of  the  Stock  Split  and
subject to  adjustment  pursuant to Section  5.1) to be  registered
by  the  Company  under  the  Securities   Act  (the   "Registrable
Amount") for Transfer by the M/C  Stockholders  in connection  with
such  offering  during  such  period.  If the Board  determines  to
register   shares  of  Class  A  Common   Stock  held  by  the  M/C
Stockholders  pursuant to this  Section  3.2(c),  the Company  will
promptly  give  written  notice  of such  determination  to the M/C
Stockholders,  and  thereupon  the  Company  will use  commercially
reasonable  efforts to effect the  registration  of that portion of
the  Registrable  Amount  that  the  M/C  Stockholders  indicate  a
desire  to  register.   All  terms,   conditions  and  rights  with
respect  to such  registration  (including  but not  limited to any
determination   to  reduce  the   Registrable   Amount)   shall  be
determined  by the  Board,  provided  that (i) the  representations
and warranties of the M/C  Stockholders  shall be customary  taking
into account,  among other  things,  the nature of the offering and
the M/C Stockholders'  relationship with the Company,  and (ii) the
Company  shall be  responsible  for all  expenses  with  respect to
such   registration   other   than   underwriting   discounts   and
commissions  allocable  to the  Class  A  Common  Stock  of the M/C
Stockholders,  which  underwriting  discounts and commissions shall
be the  responsibility  of the  M/C  Stockholders.  Notwithstanding
the  foregoing  provisions  of this Section  3.2(c),  to the extent
that the Company  grants  pursuant  to Section  3.2(c) of the Third
Amended and Restated  November  1998  Stockholders'  Agreement  the
Principal  Stockholders  the  opportunity  to  register  shares  of
Class A Common Stock for  Transfer  under the  Securities  Act, the
Company  shall  grant  the  M/C  Stockholders  the  opportunity  to
register  shares  of  Class  A  Common  Stock  on  a  substantially
similar basis.  To the extent that the Company  grants  pursuant to
Section  3.2(c)  of  this  Agreement  the  M/C   Stockholders   the
opportunity  to  register  shares  of  Class  A  Common  Stock  for
Transfer  under the  Securities  Act, the Company  shall grant each
Principal  Stockholder  pursuant  to  Section  3.2(c)  of the Third
Amended and Restated  November  1998  Stockholders'  Agreement  the
opportunity  to  register  shares  of  Class A  Common  Stock  on a
substantially similar basis.

           (d)  In  addition  to the  registration  rights  granted
pursuant to Sections  3.2(a),  (b) and (c), no more frequently than
once during each of the  calendar  years ending  December 31,  2000
and 2001 (each such year,  an  "Annual  Period"),  and upon  either
(i) the  receipt of a written  request of the M/C  Stockholders  or
(ii) a  determination  by the Board of  Directors,  the Board shall
undertake  to  determine  the  Registrable   Amount,  if  any,  for
Transfer  by the  M/C  Stockholders.  If the  Board  determines  to
register   shares  of  Class  A  Common   Stock  held  by  the  M/C
Stockholders  pursuant to this  Section  3.2(d),  the Company  will
promptly  give  written  notice  of such  determination  to the M/C
Stockholders,  and  thereupon  the  Company  will use  commercially
reasonable  efforts to effect the  registration  of that portion of
the  Registrable  Amount  that  the  M/C  Stockholders  indicate  a
desire  to  register.   All  terms,   conditions  and  rights  with
respect  to such  registration  (including  but not  limited to any
determination   to  reduce  the   Registrable   Amount)   shall  be
determined  by the  Board,  provided  that (i) the  representations
and warranties of the M/C  Stockholders  shall be customary  taking
into account,  among other  things,  the nature of the offering and
the M/C Stockholders'  relationship with the Company,  and (ii) the
Company  shall be  responsible  for all  expenses  with  respect to
such   registration   other   than   underwriting   discounts   and
commissions  allocable  to the  Class  A  Common  Stock  of the M/C
Stockholders,  which  underwriting  discounts and commissions shall
be the  responsibility  of the  M/C  Stockholders.  Notwithstanding
the  foregoing  provisions  of this Section  3.2(d),  to the extent
that the Company  grants  pursuant  to Section  3.2(d) of the Third
Amended and Restated  November  1998  Stockholders'  Agreement  the
Principal  Stockholders  the  opportunity  to  register  shares  of
Class A Common Stock for  Transfer  under the  Securities  Act, the
Company  shall  grant  the  M/C  Stockholders  the  opportunity  to
register  shares  of  Class  A  Common  Stock  on  a  substantially
similar basis.  To the extent that the Company  grants  pursuant to
Section  3.2(d)  of  this  Agreement  the  M/C   Stockholders   the
opportunity  to  register  shares  of  Class  A  Common  Stock  for
Transfer  under the  Securities  Act, the Company  shall grant each
Principal  Stockholder  pursuant  to  Section  3.2(d)  of the Third
Amended and Restated  November  1998  Stockholders'  Agreement  the
opportunity  to  register  shares  of  Class A  Common  Stock  on a
substantially similar basis.

           (e)  For   purposes  of  this   Section   3.2,  the  M/C
Stockholders  shall be  deemed  to be a single  stockholder  of the
Company,  the  McLeods  shall be  deemed  to be a single  Principal
Stockholder  of the Company,  Lumpkin and all of the  Principal CCI
Shareholders  shall be deemed to be a single Principal  Stockholder
of the  Company  and the  AEC  Entities  shall  be  deemed  to be a
single Principal Stockholder of the Company.

           (f)  Notwithstanding   any  other   provision   of  this
Agreement,  to the extent the  Company has  undertaken  to register
Securities  of the M/C  Stockholders  pursuant to this Section 3.2,
the  Company  may  subsequently  determine  not  to  register  such
Securities  and may either  not file a  registration  statement  or
otherwise withdraw or abandon a registration  statement  previously
filed  with  respect  to  the   registration  of  such  Securities;
provided  that to the extent the  Principal  Stockholders  are also
participating  in such  registration,  the M/C Stockholders and the
Principal  Stockholders will be treated on a substantially  similar
basis  with  respect  to any  such  determination  not to  register
Securities  or the  withdrawal  or  abandonment  of a  registration
statement previously filed as contemplated by this Section 3.2(f).

4.    REPRESENTATIONS AND WARRANTIES

      4.1  Representations and Warranties of Non-individual
           Stockholders

           Each  non-individual  party  to  this  Agreement  hereby
represents and warrants,  as of the date of this Agreement,  to the
Company and to each other party as follows:

           4.1.1 Authorization

           Such  party  has taken all  action  necessary  for it to
enter  into  this  Agreement  and to  consummate  the  transactions
contemplated hereby.

           4.1.2 Binding Obligation

           This   Agreement   constitutes   a  valid  and   binding
obligation  of such  party,  enforceable  in  accordance  with  its
terms,  except  to  the  extent  that  such  enforceability  may be
limited by bankruptcy,  insolvency,  and similar laws affecting the
rights  and  remedies  of  creditors  generally,   and  by  general
principles  of equity  and public  policy;  and each  document  and
instrument  to be  executed  by such party  pursuant  hereto,  when
executed and delivered in accordance  with the  provisions  hereof,
shall  be  a  valid  and   binding   obligation   of  such   party,
enforceable  in  accordance  with its  terms  (with  the  aforesaid
exceptions).

      4.2  Representations and Warranties of Individual
           Stockholders

           Each  party  to  this  Agreement  who  is an  individual
hereby  represents and warrants,  as of the date of this Agreement,
to the Company and to each other party as follows:

           4.2.1 Power and Authority

           Such party has the legal  capacity  and all other  power
and  authority  necessary  to  enter  into  this  Agreement  and to
consummate the transactions contemplated hereby.

           4.2.2 Binding Obligation

           This   Agreement   constitutes   a  valid  and   binding
obligation  of such  party,  enforceable  in  accordance  with  its
terms,  except  to  the  extent  that  such  enforceability  may be
limited by bankruptcy,  insolvency,  and similar laws affecting the
rights  and  remedies  of  creditors  generally,   and  by  general
principles  of equity  and public  policy;  and each  document  and
instrument  to be  executed  by such party  pursuant  hereto,  when
executed and delivered in accordance  with the  provisions  hereof,
shall  be  a  valid  and   binding   obligation   of  such   party,
enforceable  in  accordance  with its  terms  (with  the  aforesaid
exceptions).

      4.3  Representations and Warranties of the Company

           The Company hereby  represents  and warrants,  as of the
date of this Agreement, to each party as follows:

           4.3.1 Authorization

           The Company  has taken all  corporate  action  necessary
for  it  to  enter  into  this  Agreement  and  to  consummate  the
transactions contemplated hereby.

           4.3.2 Binding Obligation

           This   Agreement   constitutes   a  valid  and   binding
obligation  of the  Company,  enforceable  in  accordance  with its
terms,  except  to  the  extent  that  such  enforceability  may be
limited by bankruptcy,  insolvency,  and similar laws affecting the
rights  and  remedies  of  creditors  generally,   and  by  general
principles  of equity  and public  policy;  and each  document  and
instrument  to be  executed by the Company  pursuant  hereto,  when
executed and delivered in accordance  with the  provisions  hereof,
shall  be  a  valid  and  binding   obligation   of  the   Company,
enforceable  in  accordance  with its  terms  (with  the  aforesaid
exceptions).

5.    MISCELLANEOUS

      5.1  Effect of Changes in Capitalization

           All  share  amounts  of  the  Company's   capital  stock
referred  to  in  this  Agreement   shall  be   appropriately   and
proportionally      adjusted     for     any      recapitalization,
reclassification,  stock split-up,  combination of shares, exchange
of  shares,   stock  dividend  or  other  distribution  payable  in
capital  stock,  or  other  increase  or  decrease  in such  shares
effected   without  receipt  of   consideration   by  the  Company,
occurring after the date of this Agreement.

      5.2  Additional Actions and Documents

           Each of the  parties  hereto  hereby  agrees  to take or
cause to be taken such  further  actions,  to execute,  deliver and
file or cause to be  executed,  delivered  and filed  such  further
documents and instruments,  and to obtain such consents,  as may be
necessary  or as may be  reasonably  requested  in  order  to fully
effectuate the purposes,  terms and  conditions of this  Agreement,
whether before, at or after the Effective Date.

      5.3  Entire Agreement; Amendment

           Other than the Third Amended and Restated  November 1998
Stockholders'  Agreement  with  respect to the parties  thereto and
as  set  forth  therein,  this  Agreement  constitutes  the  entire
agreement  among  the  parties  hereto as of the date  hereof  with
respect  to  the  specific  matters  contemplated  herein,  and  it
supersedes  all prior oral or written  agreements,  commitments  or
understandings  with  respect to the matters  provided  for herein.
No amendment,  modification  or discharge of this  Agreement  shall
be valid or binding  unless set forth in writing and duly  executed
by the Company and by the party  against  whom  enforcement  of the
amendment,  modification  or  discharge is sought.  Any  amendment,
modification   or  discharge  of  this  Agreement  to  be  enforced
against  the M/C  Stockholders  shall be  valid  and  binding  with
respect to all M/C  Stockholders  if such  amendment,  modification
or  discharge  is  executed  by those  M/C  Stockholders  holding a
majority  of the shares of Class A Common  Stock  issued to the M/C
Stockholders in the Merger  (including  distributions of Securities
with  respect  to such  Securities  and  Securities  acquired  as a
result of a stock split with respect to such Securities).

      5.4  Limitation on Benefit

           It is the explicit  intention of the parties hereto that
no person or entity  other than the  parties  hereto is or shall be
entitled  to bring any  action to  enforce  any  provision  of this
Agreement  against any of the parties  hereto,  and the  covenants,
undertakings  and agreements  set forth in this Agreement  shall be
solely for the  benefit of, and shall be  enforceable  only by, the
parties hereto or their respective  successors,  heirs,  executors,
administrators, legal representatives and permitted assigns.

      5.5  Binding Effect; Specific Performance

           This Agreement  shall be binding upon and shall inure to
the   benefit  of  the   parties   hereto   and  their   respective
successors,     heirs,     executors,     administrators,     legal
representatives  and  permitted  assigns.  No  party  shall  assign
this  Agreement  without the written  consent of the other  parties
hereto;  and such consent shall not be unreasonably  withheld.  The
parties  hereto  agree that  irreparable  damage would occur in the
event  any  provision  of  this  Agreement  was  not  performed  in
accordance  with the terms  hereof  and that the  parties  shall be
entitled to specific  performance of the terms hereof,  in addition
to any other remedy at law or in equity.

      5.6  Governing Law

           This  Agreement,  the  rights  and  obligations  of  the
parties  hereto,  and any  claims  or  disputes  relating  thereto,
shall be governed by and construed in  accordance  with the laws of
Delaware (excluding the choice of law rules thereof).

      5.7  Notices

           All notices, demands,  requests, or other communications
which may be or are  required to be given,  served,  or sent by any
party to any other  party  pursuant to this  Agreement  shall be in
writing  and shall be  hand-delivered  or  mailed  by  first-class,
registered or certified  mail,  return receipt  requested,  postage
prepaid,   or   transmitted   by  telegram,   telecopy,   facsimile
transmission or telex, addressed as follows:

           (i)  If to the Company or to the McLeods:

                McLeodUSA Incorporated
                McLeodUSA Technology Park
                6400 C Street, SW, P.O. Box 3177
                Cedar Rapids, IA  52406-3177
                Attention:  Randall Rings
                Facsimile:  (319) 790-7901

           (ii) If to the AEC Entities:

                Alliant Energy Investments, Inc.
                200 1st Street SE
                Cedar Rapids, IA 52401
                Attention:  James E. Hoffman
                Facsimile:  (319) 398-4204

           (iii)If to Lumpkin or any Principal CCI Shareholder:

                P.O. Box 1234
                Mattoon, IL  61938
                Attention:  Richard A. Lumpkin
                Facsimile:  (217) 234-9934

                with a copy to :

                Schiff Hardin & Waite
                6600 Sears Tower
                Chicago, IL  60606
                Attention:  David R. Hodgman, Esq.
                Facsimile:  (312) 258-5600

          (iv)  If to the M/C Stockholders:
                c/o Media/Communications Partners III
                  Limited Partnership
                75 State Street
                Boston, MA  02109
                Attention:  James F. Wade
                Facsimile:  (617) 345-7201

                with a copy to:

                Edwards & Angell, LLP
                101 Federal Street
                Boston, MA  02110
                Attention:  Stephen O. Meredith, Esq.
                Facsimile:  (617) 439-4170

           Each  party may  designate  by  notice in  writing a new
address to which any notice,  demand,  request or communication may
thereafter  be so  given,  served  or sent.  Each  notice,  demand,
request or  communication  which shall be  hand-delivered,  mailed,
transmitted,  telecopied or telexed in the manner  described above,
or which  shall  be  delivered  to a  telegraph  company,  shall be
deemed  sufficiently  given,  served,  sent,  received or delivered
for all purposes at such time as it is  delivered to the  addressee
(with the return receipt,  the delivery receipt,  or the answerback
being  deemed  conclusive,  but  not  exclusive,  evidence  of such
delivery)  or at such time as delivery is refused by the  addressee
upon presentation.

      5.8  Termination

           (a)  This  Agreement   shall  terminate  and  be  of  no
further force or effect as to an Original  Stockholder  (and not as
to the  Company  and the  M/C  Stockholders)  at  such  time as the
Third Amended and Restated  November 1998  Stockholders'  Agreement
shall  terminate  and be of no further force or effect with respect
to such Original Stockholder.

           (b)  If (i)  during  any  Annual  Period  the  Board  of
Directors  has not  provided  the  M/C  Stockholders  a  reasonable
opportunity  to Transfer  shares of Class A Common  Stock  pursuant
to the  registration  of  such  shares  under  the  Securities  Act
pursuant to Section 3.2 in an  aggregate  amount  equal to not less
than fifteen  percent  (15%) of the total number of shares of Class
A Common Stock  beneficially  owned by the M/C  Stockholders  as of
the  Effective  Time in  connection  with the  consummation  of the
Merger,  subject to appropriate and  proportionate  adjustment as a
result of the Stock  Split and  subject to  adjustment  pursuant to
Section 5.1 or (ii) the  Third  Amended and Restated  November 1998
Stockholders'   Agreement  has  been   terminated  by  all  parties
thereto,  then the M/C  Stockholders  may terminate  this Agreement
by providing  written  notice of termination to the Company and the
Original  Stockholders  (x) in the case of clause (b)(i) above,  no
later  than  thirty  (30)  days  following  the end of such  Annual
Period  and (y) in the case of  clause  (b)(ii) above,  at any time
following such  termination,  such that all rights and  obligations
hereunder  shall cease,  and this Agreement  shall be of no further
force or effect.

           (c)  Unless otherwise  previously  terminated by the M/C
Stockholders  pursuant  to Section  5.8(b),  this  Agreement  shall
terminate on the Expiration Date.

           (d)  This  Agreement is hereby  terminated  with respect
to each of the Other CCI  Shareholders,  such that all  rights  and
obligations  hereunder shall cease,  and this Agreement shall be of
no further  force or effect,  with respect to each of the Other CCI
Shareholders.

           (e)  For   purposes  of  this   Section   5.8,  the  M/C
Stockholders  shall be  deemed  to be a single  stockholder  of the
Company,  the  McLeods  shall be  deemed  to be a  single  Original
Stockholder  of the Company,  Lumpkin and all of the  Principal CCI
Shareholders  shall be deemed to be a single  Original  Stockholder
of the  Company,  and the AEC  Entities  shall  be  deemed  to be a
single Original Stockholder of the Company.

      5.9  Publicity

           The M/C  Stockholders  will use  their  reasonable  best
efforts  to consult  with the  Company  prior to issuing  any press
release,   making  any  filing  with  any  governmental  entity  or
national   securities   exchange   or  making   any  other   public
dissemination of information by the M/C  Stockholders  within which
this Agreement or the contents hereof are referenced or described.

      5.10 Appointment of Representative

           (a)  Each of the M/C  Stockholders  hereby  appoints M/C
Partners,  with power of  substitution,  as its exclusive  agent to
act on its behalf  with  respect to any and all actions to be taken
under or amendments or  modifications  to be made to this Agreement
(the "M/C  Representative").  The M/C  Representative  shall  take,
and the M/C Stockholders  agree that the M/C  Representative  shall
take,  any and all actions  which the M/C  Representative  believes
are necessary or advisable  under this  Agreement for and on behalf
of each of the M/C  Stockholders,  as  fully  as if each of the M/C
Stockholders  was  acting  on its own  behalf,  including,  without
limitation,  dealing with the Company and the other parties  hereto
with  respect  to  all  matters   arising  under  this   Agreement,
entering  into any  amendment  or  modification  to this  Agreement
deemed advisable by the M/C  Representative  and taking any and all
other  actions  specified  in or  contemplated  by this  Agreement.
The Company and the other  parties  hereto  shall have the right to
rely   upon   all   actions   taken   or  not   taken  by  the  M/C
Representative  pursuant to this  Agreement,  all of which  actions
or  omissions  shall  be  legally  binding  upon  each  of the  M/C
Stockholders.

           (b)  Each  of  the  Principal  CCI  Shareholders  hereby
appoints  Lumpkin,  with power of  substitution,  as its  exclusive
agent to act on its behalf  with  respect to any and all actions to
be taken under or  amendments or  modifications  to be made to this
Agreement  (the  "CCI  Representative").   The  CCI  Representative
shall take, and the Principal CCI  Shareholders  agree that the CCI
Representative  shall  take,  any and  all  actions  which  the CCI
Representative  believes  are  necessary  or  advisable  under this
Agreement   for  and  on  behalf  of  each  of  the  Principal  CCI
Shareholders,   as   fully  as  if  each  of  the   Principal   CCI
Shareholders  was  acting  on its own  behalf,  including,  without
limitation,  dealing with the Company and the other parties  hereto
with  respect  to  all  matters   arising  under  this   Agreement,
entering  into any  amendment  or  modification  to this  Agreement
deemed advisable by the CCI  Representative  and taking any and all
other  actions  specified  in or  contemplated  by this  Agreement.
The Company and the other  parties  hereto  shall have the right to
rely   upon   all   actions   taken   or  not   taken  by  the  CCI
Representative  pursuant to this  Agreement,  all of which  actions
or omissions  shall be legally  binding upon each of the  Principal
CCI Shareholders.

      5.11 Execution in Counterparts

           To facilitate execution,  this Agreement may be executed
in as many  counterparts  as may be  required;  and it shall not be
necessary that the  signatures of, or on behalf of, each party,  or
that the  signatures  of all  persons  required  to bind any party,
appear on each  counterpart;  but it shall be  sufficient  that the
signature of, or on behalf of, each party,  or that the  signatures
of the persons  required  to bind any party,  appear on one or more
of  the   counterparts.   All   counterparts   shall   collectively
constitute  a  single  agreement.  It  shall  not be  necessary  in
making  proof of this  Agreement  to produce  or  account  for more
than  a  number   of   counterparts   containing   the   respective
signatures of, or on behalf of, all of the parties hereto.

              [Remainder of Page Intentionally Left Blank]

<PAGE>

           IN WITNESS  WHEREOF,  the undersigned have duly executed
and  delivered  this  Third  Amended  and  Restated   January  1999
Stockholders'  Agreement,  or have  caused  this Third  Amended and
Restated January 1999  Stockholders'  Agreement to be duly executed
and  delivered  on  their  behalf,  as of the  day and  year  first
hereinabove set forth.

McLEODUSA INCORPORATED

By:  /s/ J. Lyle Patrick
     -------------------------------
     Name:  J. Lyle Patrick
     Title: Group Vice President/CFO

/s/ Clark E. McLeod                 /s/ Mary E. McLeod
-------------------                 -------------------
Clark E. McLeod                     Mary E. McLeod

M/C INVESTORS L.L.C.

By:  /s/ Peter H.O. Claudy
     --------------------------
     Name:  Peter H.O. Claudy
     Title: Manager

MEDIA/COMMUNICATIONS PARTNERS III LIMITED PARTNERSHIP

By:  M/C III L.L.C., its General Partner

By:  /s/ Peter H.O. Claudy
     ---------------------------------
     Name:  Peter H.O. Claudy
     Title: Manager

ALLIANT ENERGY CORPORATION, INC.

By:  /s/ James E. Hoffman
     ----------------------------------
      Name:  James E. Hoffman
      Title: Executive Vice President
               Business Development

ALLIANT ENERGY FOUNDATION

By:  /s/ Edward M. Gleason
     --------------------------------
     Name:  Edward M. Gleason
     Title: Treasurer

ALLIANT ENERGY INVESTMENTS, INC.

By:  /s/ James E. Hoffman
     -------------------------
     Name:  James E. Hoffman
     Title: President, Alliant Energy Resources

HEARTLAND PROPERTIES, INC.

By:  /s/ Henry Wertheimer
     --------------------------------
     Name:  Henry Wertheimer
     Title: Vice President/Treasurer

LNT COMMUNICATIONS LLC
By:  Alliant Energy Resources, Inc., its sole member

By:  /s/ James E. Hoffman
     --------------------------------
     Name:  James E. Hoffman
     Title: President

/s/ Richard A. Lumpkin              /s/  Gail  G. Lumpkin
----------------------              ----------------------
Richard A. Lumpkin                  Gail G. Lumpkin

<PAGE>

The two trusts created under the Mary Green Lumpkin Gallo Trust
Agreement dated December 29, 1989, one for the benefit of each
of:
    Benjamin Iverson Lumpkin
    Elizabeth Arabella Lumpkin

United States Trust Company
of New York, Trustee

By:  /s/ Loraine B. Tsavaris
     ----------------------------------
     Name:  Loraine B. Tsavaris
     Title: Managing Director

The trust established by Richard Adamson Lumpkin under the Trust
Agreement dated February 6, 1970, for the benefit of Richard
Anthony Lumpkin.

United States Trust Company
of New York, Trustee

By:  /s/ Loraine B. Tsavaris
     ----------------------------------
     Name:  Loraine B. Tsavaris
     Title: Managing Director

The two trusts created under the Richard Adamson Lumpkin
Grandchildren's Trust dated September 5, 1980, one for the
benefit of each of:
    Benjamin Iverson Lumpkin
    Elizabeth Arabella Lumpkin

United States Trust Company
of New York, Trustee

By:  /s/ Loraine B. Tsavaris
     ----------------------------
     Name:  Loraine B. Tsavaris
     Title: Managing Director

The two 1990 Personal Income Trusts established by Richard A.
Lumpkin, dated April 20, 1990, one for the benefit of each of:
    Benjamin Iverson Lumpkin
    Elizabeth Arabella Lumpkin

/s/ David R. Hodgman
--------------------
David R. Hodgman, Trustee

/s/ Steven L. Grissom
---------------------
Steven L. Grissom, Trustee
<PAGE>

FOR  PURPOSES  OF  SECTIONS  4,  5.6,  5.8(d),  5.11 AND THE  FIRST
SENTENCE OF SECTION 5.3 ONLY:

Margaret Lumpkin Keon Trust         Mary Lee Sparks Trust
dated May 13, 1978                  dated May 13, 1978

/s/ Margaret Lumpkin Keon             /s/ Mary Lee Sparks
----------------------------------    --------------------------------
Margaret Lumpkin Keon, as Trustee     Mary Lee Sparks, as Trustee

                                      /s/ Steven L. Grissom
                                      ------------------------------
                                      Steven L. Grissom, as Trustee

/s/ Mary Lee Sparks
--------------------------------
Mary Lee Sparks

The ten trusts created under the Mary Green Lumpkin Gallo Trust
Agreement dated December 29, 1989, one for the benefit of each
of:
    Joseph John Keon III,
    Katherine Stoddert Keon,
    Lisa Anne Keon,
    Margaret Lynley Keon,
    Pamela Keon Vitale,
    Susan Tamara Keon DeWyngaert,
    Anne Romayne Sparks,
    Barbara Lee Sparks,
    Christina Louise Sparks, and
    John Woodruff Sparks

United States Trust Company
of New York, Trustee

By:  /s/ Loraine B. Tsavaris
     ----------------------------
     Name:  Loraine B. Tsavaris
     Title: Managing Director

The ten trusts created under the Richard Adamson Lumpkin
Grandchildren's Trust dated September 5, 1980, one for the
benefit of each of:
    Joseph John Keon III,
    Katherine Stoddert Keon,
    Lisa Anne Keon,
    Margaret Lynley Keon,
    Pamela Keon Vitale,
    Susan Tamara Keon DeWyngaert,
    Anne Romayne Sparks,
    Barbara Lee Sparks,
    Christina Louise Sparks, and
    John Woodruff Sparks

United States Trust Company of
New York, Trustee

By:  /s/ Loraine B. Tsavaris
     ----------------------------
     Name:  Loraine B. Tsavaris
     Title: Managing Director

The two trusts established by Richard Adamson Lumpkin under the
Trust Agreement dated February 6, 1970, one for the benefit of
each of:
    Margaret Anne Keon, and
    Mary Lee Sparks

United States Trust Company
of New York, Trustee

By:  /s/ Loraine B. Tsavaris
     ----------------------------
     Name:  Loraine B. Tsavaris
     Title: Managing Director

The ten 1990 Personal Income Trusts established by Margaret L.
Keon and Mary Lee Sparks, each dated April 20, 1990, one for the
benefit of each of:
    Joseph John Keon III,
    Katherine Stoddert Keon,
    Lisa Anne Keon,
    Margaret Lynley Keon,
    Pamela Keon Vitale,
    Susan Tamara Keon DeWyngaert,
    Anne Romayne Sparks,
    Barbara Lee Sparks,
    Christina Louise Sparks, and
    John Woodruff Sparks

/s/ David R. Hodgman
--------------------
David R. Hodgman, Trustee

/s/ Steven L. Grissom
---------------------
Steven L. Grissom, Trustee
<PAGE>

                            SCHEDULE I

Richard A. Lumpkin

Gail G. Lumpkin

United  States Trust  Company of New York, as Trustee of two trusts
created under the Mary Green Lumpkin  Gallo Trust  Agreement  dated
December  29,  1989,  one for  the  benefit  of  each  of  Benjamin
Iverson Lumpkin and Elizabeth Arabella Lumpkin.

United  States Trust  Company of New York, as Trustee of two trusts
created under the Richard  Adamson  Lumpkin  Grandchildren's  Trust
dated  September  5, 1980,  one for the benefit of each of Benjamin
Iverson Lumpkin and Elizabeth Arabella Lumpkin.

United  States Trust  Company of New York,  as Trustee of the trust
established by Richard  Adamson  Lumpkin under the Trust  Agreement
dated  February  6,  1970,  for  the  benefit  of  Richard  Anthony
Lumpkin.

David R.  Hodgman  and Steven L.  Grissom,  as Trustees of two 1990
Personal  Income Trusts  established  by Richard A.  Lumpkin,  each
dated  April 20,  1990,  one for the  benefit  of each of  Benjamin
Iverson Lumpkin and Elizabeth Arabella Lumpkin.
<PAGE>

                            SCHEDULE II

Margaret  Lumpkin Keon, as Trustee under the Margaret  Lumpkin Keon
Trust dated May 13, 1978.

Mary Lee Sparks  and Steven L.  Grissom,  as  Trustees  of the Mary
Lee Sparks Trust dated May 13, 1978.

Mary Lee Sparks

United  States Trust  Company of New York, as Trustee of ten trusts
created under the Mary Green Lumpkin  Gallo Trust  Agreement  dated
December  29,  1989,  one for the  benefit  of each of Joseph  John
Keon  III,  Katherine  Stoddert  Keon,  Lisa  Anne  Keon,  Margaret
Lynley  Keon,  Pamela Keon Vitale,  Susan  Tamara Keon  DeWyngaert,
Anne Romayne Sparks,  Barbara Lee Sparks,  Christina Louise Sparks,
and John Woodruff Sparks.

United  States Trust  Company of New York, as Trustee of ten trusts
created under the Richard  Adamson  Lumpkin  Grandchildren's  Trust
dated  September  5,  1980,  one for the  benefit of each of Joseph
John Keon III,  Katherine  Stoddert Keon, Lisa Anne Keon,  Margaret
Lynley  Keon,  Pamela Keon Vitale,  Susan  Tamara Keon  DeWyngaert,
Anne Romayne Sparks,  Barbara Lee Sparks,  Christina Louise Sparks,
and John Woodruff Sparks.

United  States Trust  Company of New York, as Trustee of two trusts
established by Richard  Adamson  Lumpkin under the Trust  Agreement
dated  February  6, 1970,  one for the  benefit of each of Margaret
Anne Keon and Mary Lee Sparks.

David R.  Hodgman  and Steven L.  Grissom,  as Trustees of ten 1990
Personal  Income  Trusts  established  by Margaret L. Keon and Mary
Lee  Sparks,  each dated  April 20,  1990,  one for the  benefit of
each of Joseph John Keon III,  Katherine  Stoddert Keon,  Lisa Anne
Keon,  Margaret Lynley Keon, Pamela Keon Vitale,  Susan Tamara Keon
DeWyngaert,  Anne  Romayne  Sparks,  Barbara Lee Sparks,  Christina
Louise Sparks, and John Woodruff Sparks.Exhibit 10(a) to the quarterly report
                                           on Form 10-Q of W.W. Grainger, Inc.
                                           for the quarter ended March 31, 2000

                              W. W. Grainger, Inc.
                        SUPPLEMENTAL PROFIT SHARING PLAN
                        --------------------------------

               (As Amended and Restated Effective January 1, 1992)
 (Conformed Copy as of April 26, 2000, Including First through Fifth Amendments)

                     ARTICLE ONE. PURPOSE AND EFFECTIVE DATE
                     ---------------------------------------

       1.1 Purpose of Plan. The purpose of this W.W. Grainger, Inc. Supplemental
Profit  Sharing  Plan is to provide  key  executives  with  profit  sharing  and
retirement benefits  commensurate with their current compensation  unaffected by
limitations imposed by the Internal Revenue Code on qualified  retirement plans.
The Plan is intended to constitute an excess benefit plan, as defined in Section
3(36) of ERISA, and a "top hat" plan, as defined in Section 201(2) of ERISA.

       1.2 Effective Date. This Plan was originally  established effective as of
January 1, 1983. It was subsequently amended and restated by action of the Board
of Directors on April 29, 1992.  The  effective  date of the Plan as amended and
restated herein is January 1, 1992.

                            ARTICLE TWO. DEFINITIONS
                            ------------------------

       2.1 Definitions. Whenever used herein, the following terms shall have the
respective  meanings  set forth below and,  when  intended,  such terms shall be
capitalized.

              (a) "Retirement" shall have the same meaning as defined in Section
              1.36 of the Profit Sharing Plan.

                                       36
<PAGE>

              (b)  "Code"  shall  mean the  Internal  Revenue  Code of 1986,  as
              amended from time to time.

              (c)   "Committee" shall mean the Profit Sharing Trust Committee.

              (d)  "Company"  shall  mean W.W.  Grainger,  Inc.,  a  corporation
              organized   under  the  laws  of  the  State  of   Illinois,   and
              subsidiaries thereof.

              (e) "Disability" shall have the same meaning as defined in Section
              1.14 of the Profit Sharing Plan.

              (f)  "Employee"  shall  mean any  person  who is  employed  by the
              Company.

              (g) "ERISA" shall mean the Employee Retirement Income Security Act
              of 1974, as amended from time to time.

              (h)  "Participant"   shall  mean  any  Employee  selected  by  the
              Committee to participate in this Plan pursuant to Article Four.

              (I) "Plan" shall mean this W.W. Granger,  Inc. Supplemental Profit
              Sharing Plan.

              (j)  "Profit  Sharing  Plan"  shall mean the W.W.  Grainger,  Inc.
              Employees Profit Sharing Plan as amended form time to time.

       2.2 Gender and Number.  Except when  otherwise  indicated by the context,
any masculine term used in this plan also shall include the feminine; the plural
shall include the singular and the singular shall include the plural.

                                       37
<PAGE>

                          ARTICLE THREE. ADMINISTRATION
                          -----------------------------

       3.1  Administration  by Committee.  The Plan shall be administered by the
Committee,  which is  appointed  by the Board of  Directors  of the  Company  to
administer this Plan and the Profit Sharing Plan.

       3.2  Authority of Committee.  The  Committee  shall have the authority to
interpret the Plan, to establish  and revise rules and  regulations  relating to
the Plan,  to designate  Participants,  and to make all  determinations  that it
deems necessary or advisable for the administration of the Plan.

                            ARTICLE FOUR. ELIGIBILITY
                            -------------------------

       4.1  Participants.  The Committee  shall select the Employee or Employees
who shall  participate  in this Plan,  subject to the  limitations  set forth in
Section 4.2.  Once an Employee is  designated a  Participant,  he shall remain a
Participant  for the purposes  specified in Section 5.1 and/or Section 5.2 until
the earlier of his death, retirement, disability, or termination of employment.

       4.2 Limitations on Eligibility.  The Committee may select as Participants
in this Plan only those  Employees  who are  "Eligible  Employees" in the Profit
Sharing  Plan  (as  defined   therein)  and  whose  share  of  contribution  are
forfeitures under the Profit Sharing Plan are limited by:

              (a)    Section 415 of the Code; or

              (b)    Any other provision of the Code or ERISA, provided that the
                     Employee is among "a select group of  management  or highly
                     compensated  Employees" of the Company,  within the meaning
                     of Sections 201, 301, and 401 of ERISA,  such that the Plan
                     with respect to benefits  attributable  to this  subsection
                     (b) qualifies for a "top hat" exemption from

                                       38
<PAGE>

                     most of the substantive requirements of Title I of ERISA.

                       ARTICLE FIVE. BENEFITS AND ACCOUNTS
                       -----------------------------------

       5.1 Accounts. An account shall be established for each Participant.  Each
year there  shall be  credited  to each  Participant's  account  the  difference
between (a) the aggregate amount of Company  contributions and forfeitures which
would  have been  allocated  to the  account  of the  Participant  in the Profit
Sharing Plan without regard to the contribution limitations described in Section
4.2 hereof; and (b) the amount of Company  contribution and forfeitures actually
allocated to the account of the Participant in the Profit Sharing Plan.

       5.2 Earnings Factor. In addition to the credit under Section 5.1, if any,
an earnings factor shall be credited to each Participant's account at the end of
each calendar quarter. Such earnings factor shall be equal to the rate of return
that the  Participant's  account  earned under the Profit  Sharing Plan for that
calendar  quarter;  provided  that the rate of return for a  Participant  who no
longer has a Profit  Sharing Plan account shall be based upon the  Participant's
Profit  Sharing  Plan   investment   allocation   immediately   prior  to  final
distribution of his Profit Sharing Plan account.  Notwithstanding the foregoing,
a Participant  may elect to receive after  termination of employment an earnings
factor equal to the rate of return in any one of the investment funds (exclusive
of the  Grainger  Stock Fund)  available  under the Profit  Sharing  Plan.  Such
election shall be made on a form approved by the  Committee,  shall not be given
effect  unless it is  submitted  to the  Committee  or its  designee at least 12
months prior to the Participant's termination of employment, and shall remain in
effect until the  Participant's  vested account balance under this Plan has been
distributed.

         5.3  Distribution  Upon  Termination of  Employment.  In the event of a
Participant's  termination  of employment  for any reason other than death,  the
Participant's vested account balance under this Plan shall become payable to the
Participant  in the form of five  annual  installments,  provided  that a vested
account  balance less than  $100,000  shall be paid in a lump sum within  ninety
(90) days after the end of the calendar quarter in which termination occurs.

                                       39
<PAGE>

         Notwithstanding, a Participant whose vested account balance is $100,000
or  greater  may  elect,  on a  form  approved  by  the  Committee,  to  receive
distribution  of his or her  vested  account  balance  in the form of a lump sum
payment or in the form of annual  installments  paid over a period not to exceed
the lesser of 15 years or the  Participant's  remaining  life  expectancy.  Such
election  shall not be given effect  unless it is submitted to the  Committee or
its  designee  at least 12  months  prior to the  Participant's  termination  of
employment.  Life  expectancy  shall be calculated as of the end of the calendar
year during which the  Participant's  employment  is  terminated,  and shall not
thereafter be recalculated.

         The  first  annual  installment,  or a lump sum  payment,  if  properly
elected,  shall be paid to the Participant within ninety (90) days after the end
of the calendar quarter in which termination of employment occurs. The remaining
installments  shall be paid in the first  calendar  quarter  of each  subsequent
year.

         The amount of each annual  installment  shall be equal to the  quotient
obtained by dividing the value of the  Participant's  vested account  balance on
the effective  date of the related  employment  termination  (and on the date of
each subsequent installment, as appropriate) by the number of years remaining in
the distribution  period including that installment.  The  Participant's  vested
account balance shall continue to accrue earnings,  as specified in Section 5.2,
until the entire vested account balance has been paid.

       5.4  Death  Benefit.   In  the  event  of  a  Participant's   death,  the
Participant's  entire  remaining  account  balance  shall be paid in a lump sum,
within  ninety  (90) days  after the end of the  calendar  quarter in which such
death  occurs,  to  the  Participant's  beneficiary,  as  such  beneficiary  was
designated  by the  Participant  in accordance  with the  Company's  beneficiary
designation procedures.

       In the event a Participant dies without having  designated a beneficiary,
or with no surviving  beneficiary,  the  Participant's  account balance shall be
paid in a lump sum to the Participant's estate within ninety (90) days after the
end of the calendar quarter in which death occurs.

                                       40
<PAGE>

         5.5 Alternative Payment Form.  Notwithstanding the terms and conditions
of Section 5.3, a  Participant  may at any time on or after his  termination  of
employment  petition the  Committee  to request  that  payment of his  remaining
vested account balance be made in a lump sum due to  circumstances of compelling
personal hardship. The Committee,  at its sole discretion,  shall make a binding
determination as to whether such alternative form of payment will be allowed.

                              ARTICLE SIX. VESTING
                              --------------------

       Vesting.  Subject to Section 8.1, each Participant shall become vested in
his account  balance under this Plan at the same rate and at the same time as he
becomes vested in his account balance in the Profit Sharing Plan.

                    ARTICLE SEVEN. AMENDMENT AND TERMINATION
                    ----------------------------------------

       7.1 Amendment. The Company shall have the power at any time and from time
to time to amend this Plan by  resolution  of its Board of  Directors,  provided
that no  amendment  shall be adopted the effect of which would be to deprive any
Participant of his vested interest in his account under this Plan.

       7.2 Termination. The Company reserves the right to terminate this Plan at
any time by resolution  of its Board of Directors.  Subject to Section 8.1, upon
termination  of this Plan,  each  Participant  shall  become fully vested in his
account  balance and such account  balance shall become payable at the same time
and in the same manner as provided in Article Five.

                                       41
<PAGE>

                          ARTICLE EIGHT. MISCELLANEOUS
                          ----------------------------

       8.1 Funding.  This Plan shall be unfunded. No contributions shall be made
to any separate funding vehicle. The Company may set up reserves on its books of
account  evidencing the liability under this Plan. To the extent that any person
acquires an account  balance  hereunder or a right to receive  payments from the
Company,  such right shall be no greater  than the right of a general  unsecured
creditor.

       8.2    Limitation of Rights. Nothing in the Plan shall be construed to:

              (a)    Give any  Employee  any  right to  participate  in the Plan
                     except in accordance with the provisions of the Plan;

              (b)    Limit in any way the right of the Company to  terminate  an
                     Employee's employment; or

              (c)    Evidence  any  agreement  or   understanding,   express  or
                     implied,  that the  Company  will employ an Employee in any
                     particular   position   or  at  any   particular   rate  of
                     remuneration.

       8.3    Nonalienation.  No  benefits  under  this Plan  shall be  pledged,
              assigned,   transferred,   sold  or  in  any   manner   whatsoever
              anticipated,   charged,  or  encumbered  by  an  Employee,  former
              Employee,  or their beneficiaries,  or in any manner be liable for
              the debts,  contracts,  obligations,  or engagements of any person
              having a possible interest in the Plan,  voluntary or involuntary,
              or for any claims,  legal or  equitable,  against any such person,
              including claims for alimony or the support of any spouse.

       8.4    Controlling  Law. This Plan shall be construed in accordance  with
              the laws of the  State of  Illinois  in every  respect,  including
              without limitation, validity, interpretation, and performance.

                                       42
<PAGE>

       8.5  Text  Controls.  Article  headings  are  included  in the  Plan  for
convenience  of  reference  only,  and the Plan is to be  construed  without any
reference to such headings.  If there is any conflict  between such headings and
the text of the Plan, the text shall control.

       IN WITNESS  WHEREOF,  the Company  has caused  this Plan,  as amended and
restated  herein,  to be signed and attested by its duly qualified  officers and
caused  its  corporate  seal to be  hereunto  affixed on this 29th day of April,
1992.

                                                             W.W. Grainger, Inc.

                                                           By:  [D.W. Grainger ]
                                                                ----------------
                                                                        Chairman
Attest:

[J.M. Baisley]
--------------
Secretary

                                       43
<PAGE>

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