Exhibit 10.3

COMMONWEALTH TELEPHONE ENTERPRISES INC.

AMENDED RESTRICTED STOCK UNITS AGREEMENT

This Amended Restricted Stock Unit Agreement (“Amended Agreement”), effective as
of September 29, 2006, is made between Commonwealth Telephone Enterprises, Inc.
(the “Company” or “CTE”) and                                  (“Grantee”). This
Amended Agreement amends the Restricted Stock Units Agreement previously
executed by Grantee and CTE on March 10, 2006.

 

  1 Definitions. As used herein:

 

  (a) “Award” means the award of Restricted Stock Units hereby granted. Awards
are characterized into two categories:

 

  i. “Long Term Incentive Award” – represents the award that an employee will
receive for their continuing contributions to CTE.

 

  ii. “Performance Level Award” – represents an award the Grantee shall receive
only if CTE meets certain performance metrics as set forth on Exhibit A.

The formula corresponding to the award as well as the application of this
formula is illustrated by example in Exhibit A, attached hereto and incorporated
herein.

 

  (b) “Board” means the Board of Directors of the Company.

 

  (c) “Code” means the Internal Revenue Code of 1986, as amended.

 

  (d) “Committee” means the Compensation/Pension Committee of the Board.

 

  (e) “Date of Grant” means the date first set forth above on which the Company
awarded the Restricted Stock Units.

 

  (f) “Deferral Date” means the date to which Grantee has elected to defer the
receipt of CTE stock with respect to any vesting or previously deferred
Restricted Stock Units.

 

  (g) “Disability” means permanent and total disability as defined in
Section 22(e)(3) of the Code.

 

  (h) “EBITDA” means Earnings Before Interest, Taxes, Depreciation, and
Amortization; and is intended to function within this Agreement as a performance
metric by which Grantee may be awarded additional Restricted Stock Units as set
forth on Exhibit A.

 

  (i) “Employer” means the Company or the subsidiary or affiliate of the Company
for which Grantee is performing services on the Vesting Date.

 

  (j) “Normal Retirement” means age 65 and five years of service or an age
greater than 65 when 5 years of service are attained.

 

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  (k) “Plan” means the Commonwealth Telephone Enterprises, Inc. Equity Incentive
Plan, incorporated herein by reference.

 

  (l) “Restricted Period” means, with respect to each Restricted Stock Unit, the
period beginning on the Date of Grant and ending on the Vesting Date.

 

  (m) “Restricted Stock Units” means any or all of the Units which are the
subject of any Award hereby granted or achieved. Units represent an unfunded
promise by the Company to deliver Shares at a future date.

 

  (n) “Shares” means shares of the Company’s common stock, par value $1.00 per
share, or any substitute securities issued in substitution for the Company’s
common stock pursuant to Paragraph 12.

 

  (o) “Vesting Date” means the date on which the restrictions imposed under
Paragraph 4 on a Restricted Stock Unit lapse, as provided in Paragraph 5.

 

  2. Grant of Long Term Incentive Awards.

Subject to the terms and conditions set forth herein and in the Plan, the
Company hereby grants to Grantee 3,000 Restricted Stock Units as a “Long Term
Incentive Award.”

 

  3. Grant of Performance Level Awards.

In addition to the Long Term Incentive Awards, Grantee has the opportunity to
receive up to 5,000 additional RSUs through a Performance Level Award. Grantee
shall only receive the Performance Level Award according to the parameters and
metrics set forth on Exhibit A.

 

  4. Restrictions on Restricted Stock Units.

Subject to the terms and conditions set forth herein and in the Plan, during the
Restricted Period, Grantee shall not be permitted to sell, transfer, pledge or
assign any of the Restricted Stock Units granted hereunder.

 

  5 Lapse of Restrictions.

(a) Subject to the terms and conditions set forth herein and in the Plan, the
restrictions set forth in Paragraph 4 on each Restricted Stock Unit that has not
been forfeited, shall lapse on the Vesting Date; provided, however, that on the
Vesting Date, Grantee is, and has from the Date of Grant continuously been, an
employee of the Company during the Restricted Period.

(b) Subject to paragraph 5(a), a Vesting Date for Shares of Restricted Stock
Units awarded to Grantee as a Long Term Incentive Award shall occur in
accordance with the following schedule:

 

  (i) As to 750 Shares of the Restricted Stock Units, March 10, 2007,

 

  (ii) As to an additional 750 Shares of the Restricted Stock Units, March 10,
2008,

 

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  (iii) As to an additional 750 Shares of the Restricted Stock Units, March 10,
2009,

 

  (iv) As to an additional 750 Shares of the Restricted Stock Units, March 10,
2010.

(c) If Restricted Stock Units are awarded to Grantee as a Performance Level
Award in accordance with paragraph 3, then subject to paragraph 5(a), a Vesting
Date for Shares of Restricted Stock Units shall occur in accordance with the
following schedule:

(i) As to one-third of the Restricted Stock Units issued as a Performance Level
Award, one year from the determination date noted in paragraph 5(e),

(ii) As to one-third of the Restricted Stock Units issued as a Performance Level
Award, two years from the determination date noted in paragraph 5(e),

(iii) As to one-third of the Restricted Stock Units issued as a Performance
Level Award, three years from the determination date noted in paragraph 5(e).

(d) Any Restricted Stock Unit regardless of the manner of the Award (and any
related Dividend Equivalents) not yet vested as of the date that a Grantee’s
employment terminates due to death, Disability or Normal Retirement, shall
become immediately vested. Any vested portion shall be paid as soon as
practicable subject to the provisions of the Plan.

(e) The number of shares awarded as Performance Level Award shall be determined
on or before February 28, 2007 (the 2006 “determination date”). If a Performance
Level award is determined to be less than the number of shares indicated in
Section 3 above, the number of shares representing the difference shall be
forfeited as of February 28, 2007.

 

  6. Deferral of Restricted Stock Units.

(a) Grantee shall have the right, on an annual basis, to defer receipt of CTE
stock relative to any vesting or deferred vested Restricted Stock Units provided
the election to defer is properly executed sufficiently in advance of the
applicable vesting or deferral date to satisfy IRS guidelines with respect to
deferral of compensation. Any election to defer shall be for a minimum of one
year.

(b) Grantee shall be notified by the Company in advance of any pending vesting
or deferral date to accommodate the election to receive, or defer receipt of,
shares on any vesting or deferred Restricted Stock Units.

 

  7. Forfeiture of Restricted Stock Units.

(a) Subject to the terms and conditions set forth herein and in the Plan, if
Grantee terminates employment with the Company or any of its Subsidiaries during
the Restricted Period for any reason other than death, Normal Retirement or
Disability,

 

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Grantee shall forfeit the Restricted Stock Units as of the date of such
termination of employment. Upon a forfeiture of the Restricted Stock Units as
provided in this Paragraph 7, such Restricted Stock Units shall be deemed
cancelled.

(b) The provisions of this Paragraph 7 shall not apply to Shares of Restricted
Stock Units as to which the restrictions of Paragraph 4 have lapsed.

 

  8. Rights of Grantee.

(a) Dividends – If the Company issues a dividend, Grantees shall earn dividends
in the form of Dividend Equivalents corresponding to the aggregate Restricted
Share Units awarded and issued hereunder. Grants of Dividend Equivalents issued
during the Restricted Period and prior to the receipt of CTE Common Stock by
Grantee, remain subject to vesting and risk of forfeiture on the same basis as
the corresponding Restricted Share Units.

(b) Voting – Holders of Restricted Stock Units will not have voting rights with
respect to Restricted Share Units until such time as the Restricted Share Unit
Award is fully vested and converted to CTE Common Stock.

 

  9 Notices.

Any notice to the Company under this Agreement shall be made in care of the
Committee at the Company’s main office at 100 CTE Drive, Dallas, PA 18612. All
notices under this Agreement shall be deemed to have been given when
hand-delivered or mailed, first class postage prepaid, and shall be irrevocable
once given.

 

  10. Securities Laws.

The Committee may from time to time impose any conditions on the Restricted
Stock Units as it deems necessary or advisable to ensure that any Shares issued
with respect to the Restricted Stock Units are issued and resold in compliance
with applicable federal and state securities laws.

 

  11. Delivery of Shares.

Upon a Vesting Date, the Company shall notify Grantee that the restrictions on
the Restricted Stock Units have lapsed. Unless a prior election has been made to
defer receipt of the specified Shares, within ten (10) business days of a
Vesting Date, the Company shall, without payment from Grantee for the Restricted
Stock Units, deliver to Grantee a certificate for CTE Shares equal to the
Restricted Stock Units subject to such Vesting Date. Said certificate shall be
delivered, without any legend or restrictions, except for such restrictions as
may be imposed by the Committee, in its sole judgment, under Paragraph 10,
provided that no certificates for Shares will be delivered to Grantee until
appropriate arrangements have been made with the Employer for the withholding of
any taxes which may be due with respect to such Shares. The Company may
condition delivery of certificates for Shares upon the prior receipt from
Grantee of any undertakings which it may determine are required to assure that
the certificates are being issued in compliance with federal and state
securities laws. The right to payment of any fractional Shares shall be
satisfied in cash, measured by the product of the fractional amount multiplied
by the fair market value of a Share on the Vesting Date, as determined by the
Committee.

 

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  12 Awards Not to Affect Employment.

None of the Awards granted hereunder shall confer upon Grantee any right to
continue in the employment of the Company or any subsidiary or affiliate of the
Company.

 

  13 Effect of Change of Control.

In the event of a Change of Control (as defined in the Plan), notwithstanding
the vesting schedule set forth in paragraph 5 above, all of the Restricted Stock
Units shall be come immediately vested.

 

  14 Miscellaneous.

(a) The address for Grantee to which notice, demands and other communications to
be given or delivered under or by reason of the provisions hereof shall be the
Grantee’s address as reflected in the Company’s personnel records.

(b) The validity, performance, construction and effect of this Award shall be
governed by the laws of the Commonwealth of Pennsylvania, without giving effect
to principles of conflicts of law.

 

COMMONWEALTH TELEPHONE ENTERPRISES, INC. BY:  

/s/ Michael J. Mahoney

  Michael J. Mahoney   President and Chief Executive Officer
X                                                                        /    /
     Date            

 

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Exhibit A

PERFORMANCE-BASED RSU AWARD EXAMPLE

Plan Design

 

Original 2006 RSU Grant   

Original 2006 RSU Performance Targets

                                       (Threshold – Maximum)

1) Long-Term Incentive RSUs

  

None

  

2) Performance Level I RSUs

  

Consolidated EBITDA

   $152,664 - $158,664

3) Performance Level II RSUs

  

Consolidated EBITDA

   $158,664 - $162,664

Modified 2006 RSU Grant

  

Modified 2006 RSU Performance Targets

                                          (Threshold – Maximum)   

1) Long-Term Incentive RSUs

  

None

  

2) Performance Level RSUs

  

Consolidated EBITDA

   $152,664 - $157,801

Long-Term Incentive Award

The Long-Term Incentive Award previously granted in 2006 remains in place to be
vested in accordance with the terms of the Amended Agreement. Should a change of
control occur, the vesting will change in accordance with Paragraph 13 of the
Amended Agreement.

Performance Level Award

The Performance Level Awards previously communicated in 2006 remain in place and
can still be achieved with the modified performance criteria as noted above.

Formula

(Actual EBITDA less Threshold EBITDA / Performance Level EBITDA less Threshold
EBITDA) x Total Performance Level RSUs

Examples

2006 Consolidated EBITDA Performance:

A = $157,801

Individual granted 2,000 Long Term Incentive and 3,500 Performance Level Awards.

 

   $ 157,801    less    $152,664    =    $5,137    $ 157,801    less    $152,664
   =    $5,137

Therefore,

     5,137    divided by    5,137    =    1.0

Accordingly,

     1.0    times    3,500    =    3,500

Total Employee RSU grant in this example:

 

Long Term Incentive Award

   2,000  

Performance Level Award

   3,500         

Total RSUs Granted

   5,500 *

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* Maximum RSU Award is 5,500 (2,000 Long Term Incentive and 3,500 Performance
Level Awards)

 

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B = $157,000

Individual granted 1,500 Long Term Incentive and 2,500 Performance Level Awards.

 

   $ 157,000    less    $152,664    =    $4,336    $ 157,801    less    $152,664
   =    $5,137

Therefore;

     4336    divided by    5137    =    0.8441

Accordingly,

     0.8441    times    2,500    =    2,111

Total Employee RSU grant in this example:

 

Long Term Incentive Award

   1,500

Performance Level Award

   2,111     

Total RSUs Granted

   3,611

 

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