Exhibit 10.3
[FORM OF] RESTRICTED STOCK AGREEMENT
IOWA TELECOMMUNICATIONS SERVICES, INC.
2005 STOCK INCENTIVE PLAN
     THIS AGREEMENT, made effective as of this ___day of                     ,
20___, by and between Iowa Telecommunications Services, Inc., an Iowa
corporation (the “Company”), and                                         
(“Participant”).
WITNESSETH:
     WHEREAS, Participant on the date hereof is an employee, officer,
consultant, advisor or director providing services to the Company or an
Affiliate (as defined in the Plan) of the Company; and
     WHEREAS, the Company wishes to grant a restricted stock award to
Participant for shares of the Company’s Common Stock pursuant to the Company’s
2005 Stock Incentive Plan (the “Plan”); and
     WHEREAS, the Company has authorized the grant of a restricted stock award
to Participant;
     NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
     1. Grant of Restricted Stock Award. The Company hereby grants to
Participant on the date set forth above a restricted stock award (the “Award”)
for _________ (                    ) shares of Common Stock on the terms and
conditions set forth herein, and subject to adjustment pursuant to Section 4(c)
of the Plan. The Company shall cause to be issued one or more stock certificates
representing such shares of Common Stock in Participant’s name, and shall hold
each such certificate until such time as the risk of forfeiture and other
transfer restrictions set forth in this Agreement have lapsed with respect to
the shares represented by the certificate. The Company may also place a legend
on such certificates describing the risks of forfeiture and other transfer
restrictions set forth in this Agreement providing for the cancellation of such
certificates if the shares of Common Stock are forfeited as provided in
Section 2 below. Until such risks of forfeiture have lapsed or the shares
subject to this Award have been forfeited pursuant to Section 2 below,
Participant shall be entitled to vote the shares represented by such stock
certificates and shall receive all dividends attributable to such shares, but
Participant shall not have any other rights as a shareholder with respect to
such shares.
     2. Vesting of Restricted Stock.
          (a) The shares of Stock subject to this Award shall remain forfeitable
until the risks of forfeiture lapse according to the following vesting schedule:

 

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          Cumulative Percentage Vesting Date   of Shares Vested
 
   

Except as expressly provided in subsection (b) below, if Participant’s
employment or other relationship with the Company or any Affiliate ceases at any
time prior to a Vesting Date for any reason, including Participant’s voluntary
resignation or retirement or termination by the Company or such Affiliate with
or without cause, Participant shall immediately forfeit all shares of Stock
subject to this Award which have not yet vested and for which the risks of
forfeiture have not lapsed.
     (b) Notwithstanding subsection (a) above, if Participant’s employment or
other relationship with the Company or any Affiliate ceases or is terminated
under any of the following circumstances:

  •   by the Company without “Cause” within twelve (12) months after a “Change
of Control” of the Company; or     •   by Participant for “Good Reason” within
twelve (12) months after a “Change of Control” of the Company; or

then, upon such cessation or termination of Participant’s employment or other
relationship with the Company or such Affiliate, the risk of forfeiture shall
lapse with respect to all shares of Stock subject to this Award and all such
shares shall become vested.
     For purposes of this Section 2, the terms “Cause”, “Good Reason”,
Disability” and “Change of Control” shall have the following meanings:
     “Cause” for the termination of Participant’s employment or other
relationship with the Company or any Affiliate shall mean the occurrence of any
of the following events and, with respect to clause (iii) and (iv) below,
Participant’s failure to cure such event within 30 days after notice thereof
from the Company:

  (i)   a conviction of Participant of, or a guilty or nolo contendere plea by
Participant with respect to, any crime punishable as a felony or involving moral
turpitude, or any bar against Participant from serving as a director, officer or
employee of any publicly-traded company;     (ii)   any act of dishonesty either
involving Participant’s employment or other services to the Company or its
Affiliate which is harmful to the Company or any Affiliate or to employees of
the Company or any Affiliate;

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  (iii)   any failure of Participant to materially comply with any agreement
between Participant and the Company regarding the provision of such services by
Participant; or     (iv)   any act or omission on the part of Participant which
is clearly and materially harmful to the reputation or business of the Company,
including, but not limited to, conduct which is inconsistent with federal and
state laws respecting harassment of, or discrimination against, one or more of
the Company’s employees.

     “Good Reason” for the termination of Participant’s employment or other
relationship with the Company or any Affiliate shall mean the occurrence of any
of the following events that the Company or such Affiliate fails to cure within
30 days after notice thereof from Participant:

  (i)   failure by the Company to pay any amount that is indisputably due or to
take any action that is indisputably required under any agreement between
Participant and the Company regarding the provision of services by Participant
that is not remedied promptly after receipt of notice thereof from Participant;
    (ii)   if Participant is an employee of the Company or any Affiliate, any
action by the Company or such Affiliate that materially diminishes Participant’s
position, authority, duties or responsibilities as such employee;     (iii)   if
Participant is an employee of the Company or any Affiliate, any requirement that
Participant regularly render his employment services at a location other than
one that is within forty-five (45) miles of ___, Iowa, other than necessary
business travel occasioned by the performance of Participant’s duties; or    
(iv)   if Participant is an employee of the Company or any Affiliate, any
substantial reduction in the aggregate value of Participant’s base salary, bonus
and other benefits provided to Participant.

Any of the foregoing circumstances constituting Good Reason for Participant’s
resignation or termination of services shall be deemed waived by Participant if
Participant does not resign for such “Good Reason” within three (3) months after
Participant acquires actual knowledge of the occurrence of any of the foregoing
reasons.
     A “Change of Control” of the Company shall be deemed to have occurred if
(1) any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934 (the “Exchange Act”)) is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 50% or more of the
combined voting power (with respect to the election of directors) of the
Company’s then

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outstanding securities; (2) at any time after the execution of this Agreement,
individuals who as of the date of the execution of this Agreement constitute the
Board of Directors (and any new director whose election to the Board or
nomination for election to the Board by the Company’s shareholders was approved
by a vote of at least two-thirds (2/3) of the members of the Board of Directors
then still in office) cease for any reason to constitute a majority of the
Board; (3) the consummation of a merger or consolidation of the Company with or
into any other corporation , other than a merger or consolidation which results
in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity or a parent company of the
surviving entity) more than 50% of the combined voting power (with respect to
the election of directors) of the securities of the Company or of such surviving
entity or parent company thereof outstanding immediately after such merger or
consolidation; or (4) the consummation of a plan of complete liquidation of the
Company or of an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s business or assets.
     3. Miscellaneous.
          (a) Employment-at-Will. This Agreement shall not confer on Participant
any right with respect to continuance of employment by or other relationship
with the Company or any of its Affiliates, nor will it interfere in any way with
the right of the Company or any of its Affiliates to terminate such employment
or other relationship. Nothing in this Agreement shall be construed as creating
an employment contract for any specified term between Participant and the
Company or any of its Affiliates.
          (b) Securities Law Compliance. Participant shall not transfer or
otherwise dispose of the shares of Stock received pursuant to this Agreement
until such time as counsel to the Company shall have determined that such
transfer or other disposition will not violate any state or federal securities
laws. Participant may be required by the Company, as a condition of the
effectiveness of this restricted stock award, to agree in writing that all Stock
subject to this Agreement shall be held, until such time that such Stock is
registered and freely tradable under applicable state and federal securities
laws, for Participant’s own account without a view to any further distribution
thereof, that the certificates for such shares shall bear an appropriate legend
to that effect and that such shares will be not transferred or disposed of
except in compliance with applicable state and federal securities laws.
          (c) Mergers, Recapitalizations, Stock Splits, Etc. Pursuant and
subject to Section 4 of the Plan, certain changes in the number or character of
the Common Stock of the Company (through sale, merger, consolidation, exchange,
reorganization, divestiture (including a spin-off), liquidation,
recapitalization, stock split, stock dividend or otherwise) shall result in an
adjustment, reduction or enlargement, as appropriate, in Participant’s rights
with respect to any shares of Common Stock for which the risks of forfeiture
have not lapsed (i.e., Participant shall have such “anti-dilution” rights under
the Award with respect to such events, but shall not have “preemptive” rights).
For example, if the Company is involved in a merger in which the outstanding
Common Stock is converted into the right to receive cash, stock of another
company or other consideration, then the shares of Common Stock for which the
risks of forfeiture have not lapsed at the time of such merger shall be
converted into the right to receive such cash, stock

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or other merger consideration, but such cash, stock or other merger
consideration shall remain subject to the risks of forfeiture pursuant to
Section 2(a), subject to potential acceleration of the vesting thereof pursuant
to Section 2(b).
          (d) Withholding Taxes. In order to permit the Company to comply with
all applicable federal or state income tax laws or regulations, the Company may
take such action as it deems appropriate to insure that, if necessary, all
applicable federal or state payroll, income or other taxes are withheld from any
amounts payable by the Company to Participant. If the Company is unable to
withhold such federal and state taxes, for whatever reason, Participant hereby
agrees to pay to the Company an amount equal to the amount the Company would
otherwise be required to withhold under federal or state law.
          (e) 2005 Stock Incentive Plan. The Award evidenced by this Agreement
is granted pursuant to the Plan, a copy of which Plan has been made available to
Participant and is hereby incorporated into this Agreement. This Agreement is
subject to and in all respects limited and conditioned as provided in the Plan.
All defined terms of the Plan shall have the same meaning when used in this
Agreement. The Plan governs this Agreement and, in the event of any questions as
to the construction of this Agreement or in the event of a conflict between the
Plan and this Agreement, the Plan shall govern, except as the Plan otherwise
provides. Participant acknowledges and agrees that the Plan and this Agreement
may be amended as reasonably necessary to comply with, or avoid adverse
consequences to the Company and/or Participant under, future tax laws and
regulations.
          (f) Stock Legend. In addition to the legend described in Section 1,
the Company may require that the certificates for any shares of Common Stock
issued to Participant hereunder shall bear an appropriate legend to reflect the
restrictions set forth in this Agreement.
          (g) Scope of Agreement. This Agreement shall bind and inure to the
benefit of the Company, its Subsidiaries and its successors and assigns and
Participant and any successor or successors of Participant permitted by this
Agreement.
     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.

                      IOWA TELECOMMUNICATIONS SERVICES, INC.    
 
               
 
  By:                          
 
      Its:        
 
               
 
                              Participant’s Signature    
 
                              Participant’s Name    

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