Exhibit 10.9


 


EXECUTIVE SEVERANCE AGREEMENT


 


THIS EXECUTIVE SEVERANCE
AGREEMENT (the “Agreement”) by and between McLeodUSA Incorporated (the “Company”),
a Delaware corporation with offices at 16479 Dallas Parkway, Bent Tree Tower 2,
Seventh Floor, Dallas, Texas 75248, and [insert name] (the “Executive”), is
made as of [insert date], 2007 (the “Effective Date”).


 


WHEREAS, the Executive is
currently employed as the Company’s [insert title];


 


WHEREAS, the Board of
Directors of the Company (the “Board”) has determined that appropriate steps
should be taken to reinforce and encourage the continued employment and
dedication of the Executive and the Executive’s continued efforts to maximize
the Company’s value;


 


NOW, THEREFORE, as an
inducement for and in consideration of the Executive’s continued employment,
the Company agrees that the Executive shall receive the benefits set forth in
this Agreement in accordance with the provisions set forth below.


 


1.           Definitions. As used herein, the following terms
shall have the following respective meanings:


 


1.1         “Cause”
means the Executive has (i) engaged in a criminal act or crime of moral
turpitude involving the Company, (ii) engaged in gross negligence or willful
misconduct that is materially injurious to the Company, monetarily or
otherwise, or (iii) breached a fiduciary duty involving personal profit,
including, without limitation, embezzlement, misappropriation or conversion of
assets or opportunities of the Company or any of its affiliates or subsidiaries
or knowingly and intentionally engaging in insider trading or similar activity
in violation of applicable securities laws.


 


1.2         “Good
Reason” means (i) a reduction in the Executive’s annual base salary or
target bonus opportunity on the date hereof, provided, however, that a pro-rata
reduction in the target bonus opportunity for all employees eligible for a
bonus shall not be Good Reason,(ii) a requirement that the Executive work from
a location that is more than 50 miles from the Executive’s office location on
the date hereof, (iii) a reduction in the Executive’s position so the Executive
no longer occupies the same position or a substantially similar position with
an appropriate title, or (iv) a material reduction in the Executive’s
authority, duties, or responsibilities.


 


1.3         “Plan
Benefits” means the benefits, if any, set forth in the Company’s Employment
Severance Security Plan, as amended (the “Enhanced Severance Plan”) which Plan
terminates on July 6, 2007. For avoidance of doubt, following termination of
the Enhanced Severance Plan, the only severance benefits payable to the
Executive by the Company shall be the amounts payable under this Executive
Severance Agreement.


 


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1.4         “Severance
Payment” means a lump sum payment equal to [insert 18 months for Bernie
Zuroff and Joe Ceryanec and 12 for others] months of the Executive’s annual
base salary in effect on the date of the Executive’s termination.


 


1.5         “Continuation
of Benefits” means the
Company will pay for the Executive’s benefits coverage as applied
under the Consolidated Omnibus Budget Reconciliation Act (COBRA) for a period
of (12 or 18) months.  This will be the full amount charged for
COBRA premiums for Health, Dental, Vision & Rx coverage. 
This company paid coverage will terminate on the earlier of (i) (12 or
18) months from the Termination Date or (ii) the date on which the
Executive accepts other full-time employment and becomes eligible for a
group health insurance plan with the new employer, whichever comes first.”


 


2.           Termination Without Cause or for Good Reason.


 


2.1         If
the Executive’s employment is terminated by the Company without “Cause” or by
the Executive for “Good Reason,” provided the Executive  enters into a General Release with the
Company substantially in the form attached hereto as Exhibit A, then the
Company will provide the Executive with the Severance Payment, but only if
providing the Severance Payment would result in a higher after-tax payment to
the Executive than providing the Plan Benefits. If the Severance Payment is
paid to the Executive, he shall not be entitled to the Plan Benefits. For the
avoidance of doubt, the Executive shall receive either the Severance Payment or
the Plan Benefits (whichever results in a higher after-tax payment to the
Executive), and in no event shall the Executive receive both the Severance
Payment and the Plan Benefits. For the further avoidance of doubt, if the
Severance Plan or any applicable employment agreement is not in effect on the
date of termination of the Executive’s employment, then the Executive shall
receive the Severance Payment. In addition to the Severance Payment, the
Company shall provide the Executive with the Continuation of Benefits.


 


2.2         If
the Executive shall receive the Plan Benefits, such Plan Benefits will be paid
in accordance with the Severance Plan. If during the period during which the
Executive receives the Plan Benefits, the Executive breaches or threatens to
breach his post-employment obligations, the Company may immediately cease providing
the Plan Benefits and shall have no further obligation to the Executive for
such Plan Benefits.


 


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3.           Other Employment Termination. If the Executive’s
employment terminates for any reason other than as described in Section 2.1,
including but not limited to if the Executive resigns from the Company, the
Executive shall only receive any compensation owed to him as of his termination
date and any other post-termination benefits that the Executive is eligible to
receive under any plan or program of the Company.


 


4.           Successors.


 


4.1         Successor
to Company. The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company expressly to assume
and agree to perform this Agreement to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in
this Agreement, “Company” shall mean the Company and its subsidiaries and any
successor to their business or assets as aforesaid which assumes and agrees to
perform this Agreement, by operation of law or otherwise.


 


4.2         Successor
to Executive. This Agreement shall inure to the benefit of and be enforceable
by the Executive’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive should die while any amount would still be payable to the Executive
or his family hereunder if the Executive had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to the executors, personal representatives or
administrators of the Executive’s estate.


 


5.           Notices. All notices, instructions and other
communications given hereunder or in connection herewith shall be in writing. Any
such notice, instruction or communication shall be sent either (i) by
registered or certified mail, return receipt requested, postage prepaid, or (ii)
prepaid via a reputable nationwide overnight courier service, in each case
addressed to the Company, at 16479 Dallas Parkway, Bent Tree Tower 2, Seventh
Floor, Dallas, Texas 75248, Attention: Chief Executive Officer, and to the
Executive at the Executive’s address indicated on the signature page of this
Agreement (or to such other address as either the Company or the Executive may
have furnished to the other in writing in accordance herewith). Any such
notice, instruction or communication shall be deemed to have been delivered
five business days after it is sent by registered or certified mail, return
receipt requested, postage prepaid, or one business day after it is sent via a
reputable nationwide overnight courier service. Either party may give any notice,
instruction or other communication hereunder using any other means, but no such
notice, instruction or other communication shall be deemed to have been duly
delivered unless and until it actually is received by the party for whom it is
intended.


 


6.           Miscellaneous.


 


6.1         Employment
by Subsidiary. For purposes of this Agreement, the Executive’s employment
with the Company shall not be deemed to have terminated solely as a result of
the Executive continuing to be employed by a wholly-owned subsidiary of the
Company.


 


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6.2         Severability.
The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.


 


6.3         Governing
Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the internal laws of the State of Delaware,
without regard to conflicts of law principles.


 


6.4         Waiver
of Right to Jury Trial. Both the Company and the Executive expressly waive
any right that any party either has or may have to a jury trial of any dispute
arising out of or in any way related to the matters covered by this Agreement.


 


6.5         Waivers.
No delay or omission by the Company in exercising any right under this
Agreement shall operate as a waiver of that or any other right. A waiver or
consent given by the Company on any one occasion shall be effective only in
that instance and shall not be construed as a bar to or waiver of any right on
any other occasion.


 


6.6         Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed
to be an original but both of which together shall constitute one and the same
instrument.


 


6.7         Tax
Withholding. Any payments provided for hereunder shall be subject to all
applicable tax withholding required under federal, state or local law.


 


6.8         Entire
Agreement. This Agreement sets forth the entire agreement of the parties
hereto in respect of the subject matter contained herein and supersedes all
prior agreements, promises, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any officer,
employee or representative of any party hereto in respect of the subject matter
contained herein; and any prior agreement of the parties hereto in respect of
the subject matter contained herein is hereby terminated and cancelled.


 


6.9         Not
an Employment Contract. The Executive acknowledges that this Agreement does
not constitute a contract of employment or impose on the Company any obligation
to retain the Executive as an employee and that this Agreement does not prevent
the Executive from terminating employment at any time.


 


6.10       Amendments.
This Agreement may be amended or modified only by a written instrument executed
by both the Company and the Executive.


 


6.11       Executive’s
Acknowledgements. The Executive acknowledges that he: (a) has read this
Agreement; (b) has been represented in the preparation, negotiation and
execution of this Agreement by legal counsel of the Executive’s own choice or
has voluntarily declined to seek such counsel; and (c) understands the terms
and consequences of this Agreement.


 


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IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first set forth above.


 


	
  THE COMPANY:

  	
   

  	
   

  	
   

  	
  THE EXECUTIVE:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  MCLEODUSA INCORPORATED

  	
   

  	
   

  	
   

  	
  [INSERT EXECUTIVE’S NAME]

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By: 

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  [insert name]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  [inset title]

  	
   

  	
  Address:

  	
   

  	
  [insert Executive’s address]

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


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EXHIBIT A


 


GENERAL RELEASE


 


This General Release (the
“Release Agreement”) by [EMPLOYEE] (“Employee”) is effective as of [DATE],
pursuant to the requirements of Section 2.1 of the Executive Severance
Agreement between McLeodUSA Incorporated and (            ) (the “Severance Agreement”).


 


1.             In
consideration of Employee’s execution and compliance with the terms and
conditions of this Release Agreement, McLeodUSA Incorporated (the “Company”)
shall pay to Employee the amounts due to Employee pursuant to the Severance
Agreement (the “Payments”). The Payments shall be made within 10 days following
the Effective Date of this Release Agreement (as defined in paragraph 5 below).


 


2.             Employee
acknowledges that the Payments are in lieu of and in full satisfaction of any
severance or similar amounts that might otherwise be payable under any
contract, agreement, plan, policy, program, practice or otherwise, past or present,
of the Company or any of its affiliates. Employee expressly agrees that
following Employee’s receipt of the Payments, the Company shall have no further
obligations to him, and that Employee shall have no right to any other
severance or similar payments or benefits from the Company or its affiliates,
with respect to Employee’s employment with the Company or the separation
thereof.


 


3.             Employee
voluntarily, knowingly and willingly releases and forever discharges the
Company and all of its parents, subsidiaries and affiliates, together with all
of their respective past and present stockholders, agents, officers, employees,
directors, successors and assigns (collectively, the “Releasees”), from and
against any and all claims, charges, damages, lawsuits, actions, causes of
action and liabilities whatsoever, whether known or unknown, absolute or
contingent, accrued or unaccrued, which against them Employee or Employee’s
executors, administrators, successors or assigns ever had, now have, or may
hereafter claim to have against the Releasees by reason of any matter, cause or
thing whatsoever arising on or before the date Employee signs this Release
Agreement, and whether or not previously asserted before any state or federal
court or before any state or federal agency or governmental entity (the “Release”).
This Release includes, but is not limited to, any rights or claims relating in
any way to Employee’s employment relationship with the Company or any of the
Releasees, or the termination thereof, or arising under any statute or
regulation, including Title VII of the Civil Rights Act of 1964, the Employee
Retirement Income Security Act of 1974, the Americans with Disabilities Act of
1990, the Equal Pay Act of 1963, the Age Discrimination in Employment Act of
1967, the Family and Medical Leave Act of 1993, each as amended, and any other
federal, state or local statutes, including but not limited to, the Iowa Civil
Rights Act, or the common law, or under any policy, agreement, understanding or
promise, written or oral, formal or informal, between Employee and the Company
or any of the Releasees. Employee represents that Employee has not commenced or
joined in any claim, charge, action or proceeding whatsoever against the
Company or any of the other Releasees, arising out of or relating to any of the
matters set forth in


 


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this paragraph. Employee further agrees that Employee
will not be entitled to any personal recovery in any action or proceeding
whatsoever against the Company or any of the Releasees for any of the matters
set forth in this paragraph, excepting those which may arise after the date
hereof, or with respect to the Company’s obligations under the Severance
Agreement.


 


4.             Employee
acknowledges that Employee has carefully read this Release Agreement and fully
understands all of its terms. Employee is signing this Release Agreement
voluntarily and with full knowledge of its significance and acknowledges that
Employee has not relied upon any representation or statement, written or oral,
not set forth in this Release Agreement. Employee further acknowledges that
Employee is receiving consideration for Employee’s execution of this Release
Agreement pursuant to the Severance Agreement in addition to anything of value
to which Employee already is entitled. Employee acknowledges that such Payments
are expressly conditioned upon Employee’s execution of this Release Agreement.
Employee further understands that Employee has twenty-one (21) days from the
original date of presentment of this Release Agreement (set forth below) to
consider whether or not to execute this Release Agreement, although Employee
may elect to sign it sooner.


 


5.             Employee
shall have a period of seven (7) days after signing this Release Agreement to revoke
Employee’s consent hereto, which revocation must be in writing to the
undersigned, and this Release Agreement shall not become effective until after
this time period has passed (the “Effective Date”). Employee understands that
if Employee revokes such consent within such seven (7) day period, all of the
Company’s obligations to Employee under the Severance Agreement will
immediately cease, and the Company will not be required to make the Payments to
Employee.


 


6.             The
provisions of this Release Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity
or enforceability of the other provisions hereof. Moreover, if anyone or more
of the provisions of this Release Agreement shall be held to be excessively
broad as to duration, activity or subject, such provision shall be construed by
limiting and reducing them so as to be enforceable to the maximum extent
allowed by applicable law.


 


7.             This
Release Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original and all of which shall constitute one and the
same instrument.


 


8.             For
purposes of this Release Agreement, notices and all other communications
provided for herein shall be in writing and shall be deemed to have been duly
given when hand delivered, 24 hours after sent by overnight courier, or upon
receipt of mail by first-class, registered or certified mail, return receipt
requested, postage prepaid, or transmitted by telegram or fax, addressed as follows:


 


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To the Company:


 


McLeodUSA Incorporated


McLeodUSA Technology


 


Fax: (319) 790-


Attention: General Counsel


 


To Employee:


 


At the address on file for the Employee at the Company


 


or to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notices
of change of address shall be effective only upon receipt.


 


10.           This
Release Agreement sets forth the entire agreement of the parties hereto in
respect of the subject matter contained herein and supersedes all prior
agreements, promises, covenants, arrangements, communications, representations
or warranties, whether oral or written, between the parties hereto. No
provision of this Release Agreement may be modified or discharged unless such
modification or discharge is authorized and agreed to in writing, signed by
Employee and the Company.


 


IN WITNESS WHEREOF,
Employee has hereunder caused this Release Agreement to be duly executed and
delivered in their names and on their behalf.


 


Date of original presentment: [DATE]


 


[EMPLOYEE]


 


Agreed:


 


Date of signing: