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                                                                 EXHIBIT 10.57*

         * Confidential treatment has been requested in connection with this
document.

                            NETWORK AGREEMENT BETWEEN
                          ALLIANT ENERGY COMPANIES AND
                   MCLEODUSA TELECOMMUNICATIONS SERVICES, INC.

This agreement is between Wisconsin Power and Light Co., a Wisconsin corporation
with offices at 222 West Washington, Madison, WI 53703, IES Utilities, Inc. an
Iowa corporation with offices at 200 1st St. SE, Cedar Rapids, IA 52401 and
Interstate Power Corporation, a Delaware corporation with principal offices at
1000 Main St., Dubuque, IA 52004, and any other corporation, 40% or more of
which is owned by any of the foregoing, or which is under common ownership or
control with any of the foregoing, or which is owned by Alliant Energy
Corporation (hereinafter "Alliant Energy" or the "Alliant Energy Company or
Companies"), and McLeodUSA Telecommunications Services, Inc. ("McLeodUSA"), an
Iowa corporation with offices at McLeodUSA Technology Park, 6400 C Street SW, P
O Box 3177, Cedar Rapids, Iowa 52406-3177.

I. PURPOSE/ GRANT. This Agreement is for the purpose of exchanging attachment
space on the Alliant Energy Network for telecommunications capacity owned by
McLeodUSA, pursuant to the Telecommunications Act of 1996. It takes the place of
all previous contracts on this subject and is effective as of the date signed.
It is valid for Attachments of telecommunications equipment to the Alliant
Energy Network and utilization of telecommunications capacity on McLeodUSA's
Network, and for no other purpose.

With this Agreement, Alliant Energy grants McLeodUSA, and any other corporation,
40% or more of which is owned by or which is under common ownership or control
of McLeodUSA the right to construct, install, maintain, operate, inspect and
remove communications cable, and the necessary fixtures, wires and equipment,
including antennae, associated with communications cable used for the purpose of
transmitting telecommunications and communications signals including but not
limited to audio, video or data type communications ("Telecommunication
Purposes"). With this Agreement, McLeodUSA grants Alliant Energy the right to
usage of communications signals, associated with the transmittal of
telecommunications and communications signals, including but not limited to
audio, video or data type communications, anywhere on the McLeodUSA Network
("Transport Capacity") pursuant to the terms of this Agreement.

II. TERM. This Agreement has an initial term of 30 years, and automatically
renews for 5 five year terms, unless written notice to terminate is given by
either party to the other three years prior to the expiration of the initial or
any renewal term. This is not an exclusive agreement. Either party may enter
into similar arrangements with other parties, including but not limited to other
telephone companies, municipalities, private individuals, utilities or CATV
companies.

III.  DEFINITIONS

"McLeodUSA Network" means the communications network consisting of fiber, fiber
cable, telephone cable, optronics, attachments, hubs, Customer Connections (the
connection from a customer site that purchases communications service from
McLeodUSA) and other communications materials owned, leased and constructed by
McLeodUSA, including fiber-optic fibers, fiber-optic cable, and hardware owned
by McLeodUSA.

"The Alliant Energy Network" means the network consisting of underground duct
and overhead structures, including microwave and radio towers, owned by any
Alliant Energy Company, carrying that company's electrical transmission and

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distribution system, distribution, transmission and other facilities owned by
Alliant Energy, fee owned real estate on which such facilities are located and
equipment used for transmission and distribution of energy. Real estate which is
not used as right of way or for electric or gas utility structures is not
subject to this Agreement, and utilization of such real estate by McLeodUSA
shall be subject to a separate agreement requested from Alliant Energy Real
Estate and Right of Way Department (hereinafter "AEREROWD").

"Alliant Energy Engineering Standards" means the written, uniformly applied
standards developed by Alliant Energy for use in determining the methods and
equipment used, and safety precautions to be taken, in making an attachment to
the Alliant Energy Network.

"Optronics" means device(s), otherwise known as an "opto-electrical transducer",
which converts electrical energy to optical energy and vice versa, which are
used as transmitters and receivers in fiber optic communications systems.
Optronics includes devices installed or existing on Alliant Energy Company owned
or leased premises, as well as the portion of the device installed or existing
on the McLeodUSA Network which is necessary for Alliant's usage, but does not
include that portion of an optronic device on the McLeodUSA Network which is
necessary for use by other McLeodUSA customers.

"Attachment" means the placement of McLeodUSA fiber, wires, fiber cable,
telephone cable, optronics, and associated equipment on or in Alliant Energy
Network.

"Alliant Energy Pricing Option" means the model utilized by McLeodUSA for
pricing the installation of fiber and optronics for the Alliant Energy
Companies, attached hereto and incorporated herein by reference as Exhibit A.
The Alliant Energy Pricing Option is valid only for utilization of DS-1 and DS-3
capacity by Alliant Energy on McLeodUSA's Network. Other fiber, optronics or
network construction requests by Alliant Energy shall be by separate agreement.

IV.  ATTACHMENT PERMITS

Before making an Attachment, McLeodUSA will obtain a permit to attach from
AEREROWD using the procedure and forms attached hereto and incorporated herein
by reference as Exhibit B. The Attachments must meet Alliant Energy Engineering
Standards, copies of which will be provided to McLeodUSA. Alliant shall provide
McLeodUSA with copies of any changes to such Engineering Standards which relate
to McLeodUSA Attachments. Overlashing will be allowed with a separate permit
from the AEREROW. Alliant shall conduct inspections to assure that McLeodUSA
complies with such Alliant Energy Engineering Standards.

McLeodUSA agrees to reimburse Alliant Energy for the cost of a field study,
including but not limited to the cost of a pre-construction inspection by
Alliant Energy personnel, engineering, planning any changes to the Alliant
Energy equipment necessary to accommodate the Attachment, and the cost of a
post-construction inspection.

McLeodUSA, its subsidiaries and affiliates, agree that utilization of the
Alliant Energy Network shall be limited to Telecommunications Purposes only. All
telecommunications equipment must be installed and maintained by McLeodUSA
according to the requirements of all applicable Federal, State and local codes
and authorities, including but not limited to the Telecommunications Act of
1996.

V.   SERVICE REQUESTS BY ALLIANT ENERGY

Alliant Energy will complete a Service Order form (attached as Exhibit C)
requesting utilization of Transport Capacity on McLeodUSA's Network. Such form
shall describe the location of the facilities to be utilized and the Capacity
required. Alliant Energy agrees that utilization of Transport Capacity on
McLeodUSA's Network will not be used to compete with McLeodUSA's
telecommunications business and will be limited to voice, video and data
communications for internal purposes only, which purposes include metering,

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monitoring or controlling energy and water utilization by customers, to the
extent that such uses shall not adversely impact McLeodUSA service to its
customers.

VI.  ATTACHMENT, OVERLASHING, REPLACEMENT,TRANSFER OR OTHER SERVICES

A. ALLIANT ENERGY NETWORK. The parties recognize that it may be to their mutual
benefit for Alliant Energy to perform installing, replacing, transferring or
overlashing of any McLeodUSA telecommunications facilities on the Alliant Energy
Network. To the extent reasonably and economically feasible, McLeodUSA shall
make good faith efforts to subcontract this type of work to Alliant Energy.
McLeodUSA will, prior to the commencement of any such services, supply to
Alliant Energy evidence that its personnel have been properly and adequately
trained in safe working practices in and around electric lines. If McLeodUSA
Attachments are to be made in the vicinity of a substation in the Alliant Energy
Network, as shown on the route map supplied by McLeodUSA pursuant to the
Attachment Permit requested by McLeodUSA under Section IV of this Agreement,
McLeodUSA will, at Alliant Energy's request, provide an access loop or splice
point at, or as close as reasonably possible to, the substation.

B. MCLEODUSA NETWORK. In the event that Alliant Energy requests that McLeodUSA
undertake a project for which construction of additional facilities on the
McLeodUSA Network is required, the costs of such construction shall be charged
to Alliant Energy pursuant to the Alliant Energy Pricing Option attached hereto
and incorporated herein by reference as Exhibit . Requests for such construction
shall be made using the procedure and forms attached hereto and incorporated
herein by reference as Exhibit D.

VII.   ALLIANT ENERGY NETWORK CHANGES TO ACCOMMODATE ATTACHMENT

If Alliant Energy determines that a structure, tower, duct or real estate is
inadequate to support the McLeodUSA Attachment, the structure, tower, duct or
real estate will be modified or replaced. Such replacement shall be at
McLeodUSA's expense if such modification or replacement is required by Alliant
Energy Engineering Standards. The expense will be determined by adding the total
cost of the new facilities, engineering and testing, related maintenance,
removal of the old facilities, and any cost to third parties. Subtracted from
that total will be the salvage (not to exceed original cost) or the accumulated
depreciation (whichever is greater) and any expenditure for Alliant Energy's
convenience. The remaining amount will be billed to McLeodUSA. Amounts due third
parties are to be paid directly to them by McLeodUSA. McLeodUSA must provide the
necessary guying to support unbalanced loads. The guying must meet Alliant
Energy's Engineering standards. McLeodUSA may attach guying to the Alliant
Energy anchors only if Alliant Energy determines that there is adequate anchor
capacity. If Alliant Energy determines that the anchor does not have sufficient
capacity, McLeodUSA will provide its own anchor.

If it is necessary to replace or rearrange the Alliant Energy Network facilities
to accommodate McLeodUSA's Attachment pursuant to the Alliant Energy Engineering
standards. Alliant Energy will replace or rearrange its facilities and bill
McLeodUSA for the costs.

If more than one customer, including McLeodUSA, which has no attachment
simultaneously submits a request for attachment, and if construction,
replacement or rearrangement is required, the cost will be prorated. This
proration will be agreed on before construction begins.

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VIII.  OPTRONICS

Installation of all Optronics will be performed by McLeodUSA on McLeodUSA's
Network. Alliant Energy will pay for optronics installed by McLeodUSA in
accordance with the Alliant Energy Pricing Option, Exhibit A. McLeodUSA will own
and maintain all optronics.

IX.  MAINTENANCE OF ATTACHMENTS

McLeodUSA agrees to maintain its Attachments in safe condition and good repair
in accordance with all code requirements and in the manner required by Alliant
Energy. Except for Attachments involving: 1)hazardous conditions; or 2)
potential effect on the reliability of the Alliant Energy Network, Alliant
Energy will provide McLeodUSA 10 days notice and the opportunity to repair or
replace Attachments which do not comply with the Alliant Energy Engineering
standards. Attachments involving hazardous conditions or potential effect on the
reliability of the Alliant Energy Network may be repaired or replaced by Alliant
Energy without notice or the opportunity to cure. McLeodUSA will pay for such
repair or replacement upon receipt of a bill therefor from Alliant Energy.
McLeodUSA's Attachments must not impair the use of the Alliant Energy Network by
Alliant Energy or other attachers. McLeodUSA agrees to transfer or relocate its
Attachments upon sixty (60) days advance notice when requested by Alliant
Energy, unless otherwise agreed upon by the parties. In an emergency Alliant
Energy may transfer McLeodUSA's Attachments, to another structure, tower, duct
or location and bill McLeodUSA for the work. If McLeodUSA has not removed any
Attachments within sixty 60 days of request by Alliant Energy, McLeodUSA
authorizes the removal of any such Attachments by Alliant Energy at McLeodUSA's
expense.

When it is necessary for Alliant Energy to replace a structure, tower, duct or
location to which McLeodUSA is attached, Alliant Energy will give McLeodUSA 60
days notice in advance of the construction date. McLeodUSA agrees to have a crew
at the job to make the transfer with the Alliant Energy crew or reimburse
Alliant Energy for making the transfer. If Alliant Energy replaces a structure,
tower, duct or location based on its need, McLeodUSA will only be responsible
for paying the costs of transferring its Attachment to the new structure, tower,
duct or location.

Alliant Energy will perform all tree trimming required for its attachments on
Alliant Energy Network. McLeodUSA will pay, as the portion of the tree trimming
costs related to McLeodUSA facilities, 20% of Alliant tree-trimming costs
attributed to the structures, towers, ducts or real estate on which McLeodUSA
has Attachments.

X.  NETWORK CHANGES

Except as provided otherwise in this agreement, McLeodUSA will be responsible
for the actual costs to relocate, rearrange or otherwise modify any part of the
McLeodUSA Network or Alliant Energy Network, if these costs have resulted from a
change sought by McLeodUSA. In no event will Alliant Energy be responsible for
costs to relocate, rearrange or otherwise modify McLeodUSA Attachments on the
Alliant Energy Company's Network which are requested or required by changes to
the electrical system.

If the relocation, rearrangement or other modification of the McLeodUSA Network
or Alliant Energy Network is necessitated by requirements of public authorities,
requirements of private property owners or any accident or other unforeseen
circumstances not caused by the tortious conduct of McLeodUSA or Alliant Energy,
then each party shall be responsible for their respective costs of relocating,
rearranging or otherwise modifying their networks.

XI.  ABANDONMENT

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A.       ALLIANT ENERGY COMPANY NETWORK

If the Alliant Energy Company desires at any time to abandon any pole, duct or
Tower upon which McLeodUSA Attachments exist, it shall give McLeodUSA 60 days
advance notice in writing to that effect. If at the expiration of said period
Alliant Energy Company has no Attachments on such pole, duct or Tower but
McLeodUSA has not removed all of its Attachments, such pole, duct or Tower shall
become the property of McLeodUSA. Thereafter, McLeodUSA shall assume all
responsibility for maintenance and insurance, and agrees thereafter to defend
indemnify and hold harmless the Alliant Energy Company from every obligation,
liability or cost and from all damages, expenses or charges incurred after such
abandonment, arising out of, or because of, the presence of or the condition of
such pole, duct, Tower or any Attachments not caused by the Alliant Energy
Company's failure to maintain such in accordance with industry standards.
McLeodUSA shall pay Alliant Energy a sum equal to the fair market value of such
abandoned pole, duct or tower, offset by any amount paid to Alliant Energy which
increased the fair market value of said pole. McLeodUSA will receive a properly
authorized bill of sale. In such event McLeodUSA shall be responsible for
obtaining all consents and easements to maintain the poles, ducts and Towers at
their present location.

If McLeodUSA desires at any time to abandon any Attachments on the Alliant
Energy Network, McLeodUSA shall give Alliant Energy sixty (60) days advance
notice in writing.

B.  MCLEODUSA NETWORK

If McLeodUSA desires at any time to abandon any part of the McLeodUSA Network on
which Alliant Energy utilizes Capacity, such that Alliant Energy's
Communications Network would be interrupted, McLeodUSA shall give Alliant Energy
sixty (60) days advance notice in writing.

Within such sixty (60) day period, Alliant Energy may elect to purchase such
McLeodUSA Network assets. If Alliant Energy elects to purchase such abandoned
assets, Alliant Energy shall pay McLeodUSA a sum equal to the fair market value
of the purchased assets, offset by any amount paid to McLeodUSA by Alliant
Energy for the construction of same.

C.  CONDITIONS

Any transfer is subject to the consent of any party which either party:

         a.       has granted a security interest in its Network, or

         b.       has entered into a debt agreement containing covenants
                  stating that such transfer would constitute a default or
                  restricts such transfer.

If consent cannot be obtained, the right to purchase shall be extinguished as to
that offer. Upon a duly authorized transfer, McLeodUSA will provide a properly
authorized bill of sale to Alliant Energy. In such event, Alliant Energy shall
be responsible for obtaining all consents and easements to maintain the
attachments at their present location. Thereafter, Alliant Energy shall assume
all responsibility for maintenance and insurance. After such transfer, Alliant
Energy agrees thereafter to defend, indemnify and hold harmless McLeodUSA from
every obligation, liability or cost and from all damages, expenses, and charges
incurred after such abandonment arising out of or because of the presence of or
the condition of such attachments not caused by McLeodUSA's failure to
adequately maintain such in accordance with industry standards.

XII.  Termination/EXPIRATION

A. Termination
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During the initial 30 year term, this Agreement may not be terminated by either
party except for material breach of its provisions and, if practicable, three
years (3) prior written notice to the breaching party. During any of the five
(5) year renewal terms, this Agreement may be terminated by either party for any
reason upon three (3) years prior written notice. Any accrued Transport Capacity
shall have no value other than a unit of measure used in exchange for Alliant
Energy's use on the McLeodUSA Network, and upon termination of this Agreement
all accrued Transport Capacity shall have no cash equivalent value.

B. EXPIRATION

Upon expiration of the initial term and any renewal terms of this Agreement, the
parties shall cooperate to the fullest extent possible to place each other in a
position to continue that party's business operations with the least practicable
interruption. Where necessary, the parties agree to sell to each other, at fair
market value, such of their Network as is feasible under then existing legal,
technological and regulatory conditions, in order to allow the other party to
continue its business operations. Any transfer is subject to the consent of any
party which either party

         a.       has granted a security interest in its  Network, or

         b.       has entered into a debt agreement containing covenants stating
                  that such transfer would constitute a default or restricts
                  such transfer.

If consent cannot be obtained, the right to purchase shall be extinguished as to
that offer.

XIII.  INFORMATION EXCHANGE AND NETWORK PLANNING

The parties agree to exchange information regarding changes in their respective
networks and future plans for Network location or expansion. McLeodUSA will
provide to Alliant Energy updated reports of anticipated McLeodUSA Network
expansion or construction at the same time as reports of accrued Transport
Capacity calculated pursuant to Section XV are provided. Semi-annual reports to
Alliant shall reflect the amount of Transport Capacity accrued by Alliant
pursuant to Section XV of this Agreement offset by the amount of Transport
Capacity used by Alliant. Such reports shall include a copy of the McLeodUSA
network map. Alliant Energy will provide McLeodUSA a map of the Alliant Network,
including towers upon request [or with the transmission of utlization reports].

XIV TOWERS

Alliant Energy-IES Utilities grants McLeodUSA the right to use for
Telecommunications Purposes microwave towers owned by it, in exchange for
Transport Capacity as shown in section XV. [Confidential material has been
omitted pursuant to a request for confidential treatment filed with the SEC
under Rule 24b-2(b) and has been filed separately with the SEC] McLeodUSA shall
retain any rental income from other users of the microwave towers in
consideration of its management of the microwave towers for Alliant Energy-IES .
Alliant Energy-IES Utilities reserves the right to deny access to microwave
towers to any third party, including McLeodUSA, due to engineering or insurance
concerns, including but not limited to electrical interference or maintenance of
the physical/structural integrity of the towers. In the event that McLeodUSA
receives payments from any third party for conversion of any frequency required
by the FCC to be abandoned, McLeodUSA shall either: perform the conversion to a
communications system with capacity as good or better than that of the microwave
tower, or shall remit these payments to Alliant Energy.

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Alliant Energy grants McLeodUSA the right to attach for Telecommunications
Purposes to all other towers (meaning the towers owned by IPC and WPL and
collectively referred to as "Other Towers"), including but not limited to radio
towers, owned by Alliant Energy in exchange for Transport Capacity as shown in
Section XV. Such grant of right is not exclusive, and does not preclude usage of
such other towers by Alliant Energy for its own purposes. In the event that a
third party makes a bona fide offer to lease space for the attachment of
telecommunications facilities used for Telecommunications Purposes to Alliant
Energy's Other Towers in its Network, other than that portion of the Network
owned by IES Utilities, and such attachment is within the capabilities of such
Other Tower, the AEREROWD shall inform McLeodUSA of such request. In the event
that McLeodUSA desires to attach its facilities in the area requested by the
third party, McLeod USA shall compensate Alliant Energy for such Attachment as
provided in Article XV. In the event that McLeodUSA does not attach its
facilities in the space requested by the third party, but desires to reserve
said space, McLeod USA shall compensate Alliant Energy for such reservation as
described in Article XV. In the event that no attachment or reservation of such
space is required, no compensation shall be due to Alliant Energy. In the event
that the attachment of telecommunications facilities to Other Towers is not
subject to regulation by any state agency, including but not limited to the
Public Service Commission of Wisconsin or Minnesota or any successor Agency, the
parties shall negotiate the use of the Other Towers by McLeodUSA. Alliant Energy
is responsible for insurance and maintenance of the Towers.

XV.      PAYMENT

McLeodUSA will pay Alliant Energy for Attachments on the Alliant Energy Network
by making Capacity available on the McLeodUSA Network. This Capacity will be
made available utilizing the following formula.

[CONFIDENTIAL MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE SEC UNDER RULE 24B-2(B) AND HAS BEEN FILED SEPARATELY
WITH THE SEC]

The Transport Capacity shall be useable by any Alliant Energy Company at any
time during the initial term of this Agreement or any renewal term.

The parties agree that the total amount of Transport Capacity accrued but not
used by Alliant Energy as of the effective date of this Agreement shall be
re-calculated using the formula expressed above.

In the event that [CONFIDENTIAL MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT FILED WITH THE SEC UNDER RULE 24B-2(B) AND HAS BEEN
FILED SEPARATELY WITH THE SEC] ceases to become the standard unit of measurement
on the McLeodUSA Network due to technology changes, the parties shall reasonably
agree on the replacement measurement (SUCH AS [CONFIDENTIAL MATERIAL HAS BEEN
OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT FILED WITH THE SEC
UNDER RULE 24B-2(B) AND HAS BEEN FILED SEPARATELY WITH THE SEC] or other form of
capacity measurement), and shall convert all accrued Transport Capacity to said
unit of measurement, subject to McLeodUSA approval in compliance with
McLeodUSA's standards and practices.

Time is of the essence in installation of the fiber and fiber optic cable for
utilization by the Alliant Energy Companies.

Installation costs for fiber and optronics dedicated to Alliant Energy, or for
its proportionate share thereof will be paid by the Alliant Energy Company
pursuant to Exhibit A, the Alliant Energy Pricing Option. Changes in the Alliant
Energy Pricing Option may be made from time to time by

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McLeodUSA. The Alliant Energy Pricing Option contain an overhead component.
Alliant Energy may request an audit of the overhead component on an annual
basis. In the event that the audit reveals a difference of ten percent (10%)
more or less than the overhead rate stated in the Alliant Energy Pricing Option,
Alliant Energy shall pay the difference between what was charged over the
previous twelve months and actual overhead costs to McLeodUSA, or McLeodUSA
shall refund to Alliant Energy the amount of overpayment over the twelve months.
In the event that an audit is required by a regulatory agency, each party shall
bear one half the costs of the audit.

[CONFIDENTIAL MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE SEC UNDER RULE 24B-2(B) AND HAS BEEN FILED SEPARATELY
WITH THE SEC] If McLeodUSA agrees to design, engineer and install fiber optic
cable pursuant to said request, cost of design, installation and construction
shall be as stated in the then-current Alliant Energy Pricing Option. In the
event that McLeodUSA does not agree to expansion of its Network to include the
location requested, Alliant Energy may itself, or may contract with a third
party to, design, engineer and build fiber optic cable, optronics and associated
equipment in the location desired by Alliant Energy, but may only use McLeodUSA
facilities upon McLeodUSA's approval in compliance with McLEodUSA's standards
and practices.

XVI.  ATTACHMENT INSPECTION

Following the pre- and post-construction inspections under Section IV of this
Agreement, Alliant Energy reserves the right to make periodic inspections of
McLeodUSA's Attachments on its Network. Such inspections will be at McLeodUSA's
expense. Failure to make inspections does not waive any rights of Alliant Energy
under this agreement. Alliant Energy will notify McLeodUSA in writing (see
notice provision) before it makes such an inspection. It is McLeodUSA's option
to accompany Alliant Energy personnel during the inspection.

XVII.  INSURANCE

McLeodUSA will carry the following types of insurance: worker's compensation
liability as established by the applicable state statutes and comprehensive
general liability. The comprehensive general liability will have a contractual
liability endorsement. The minimum limits for the comprehensive general
liability coverage will be bodily injury $300,000/$1,000,000, and property
damage $500,000. A certificate of insurance will be approved by Alliant Energy
before any Attachments to its Network are made under this agreement.

XVIII.  LIABILITY AND DAMAGES

Both parties reserve the right to maintain their Networks and to operate
facilities in a manner that will best enable them to fulfill their service
requirements. No Alliant Energy Company will be liable for any interruptions of
service to McLeodUSA except as may be caused by Alliant Energy's negligence or
willful misconduct. McLeodUSA agrees that it is responsible for any overlashings
on its lines attached to any Alliant Energy's Network.

McLeodUSA agrees to exercise all necessary precautions to avoid damage to
facilities of Alliant Energy and other attachers. McLeodUSA agrees to indemnify
Alliant Energy from and against any loss, damage, or claims resulting from any
acts or omissions of McLeodUSA. McLeodUSA agrees to make an immediate report to
al Alliant Energy of any loss or damage to Alliant Energy's or other attacher's
or overlasher's facilities and agrees to pay the cost of repairs, except if due
to Alliant Energy's negligence or willful misconduct.

Alliant Energy shall promptly notify McLeodUSA of (i) any damages caused by
Alliant Energy to the McLeodUSA Network or (ii) any claims against McLeodUSA for
property damage, bodily injury or death arising directly or indirectly out of
Alliant Energy's use of the McLeodUSA Network. Notwithstanding any other
provision to the contrary, neither party shall be liable to the other for the

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other party's consequential or indirect damages, including but not limited to,
exemplary or punitive damages, loss of profits or revenue, whether arising out
of this transaction or breach of this Agreement or otherwise.

XVIII.  INDEMNIFICATION

McLeodUSA agrees to take all necessary precautions to safeguard the public
against damages or injury and to save Alliant Energy harmless from any and all
damages, expense, costs and reasonable attorney's fees on account of injury to
person, life or property or injury resulting in the death of any person or
persons in any manner arising out of or in connection with attachment, removal,
relocation, rearrangement, reconstruction, repair or overlashings of McLeodUSA's
Attachments on Alliant Energy's Network, except as may be caused by Alliant
Energy's negligence or willful misconduct.

If Alliant Energy is made a party to any suit or litigation on account of injury
or damage or alleged injury or damage to person, life or property or on account
of an injury or damage or alleged injury resulting in the death of any person or
persons, arising out of or in connection with the attachment, removal,
relocation, rearrangement, reconstruction, repair of McLeodUSA's Attachments to
the Alliant Energy Network, except as may be caused by Alliant Energy's
negligence or willful misconduct, McLeodUSA will defend such actions on behalf
of Alliant Energy, including claims and causes of action at common law or
arising under any statute. If judgment will be obtained or claim allowed against
Alliant Energy, McLeodUSA will pay and satisfy such judgment or claim in full,
except as may be caused by Alliant Energy's negligence or willful misconduct.

XIX.  RIGHTS

Nothing in this Agreement will affect the rights of others not mentioned in this
Agreement including the rights to use structures or towers or structure or tower
space.

Neither party shall assign, sublet or otherwise transfer this Agreement or any
of its rights and interest to any firm, corporation or individual, without the
prior written consent of the other party, except either party shall have the
right by written notification to the other to assign, convey or otherwise
transfer its rights, title, interest and obligations under this Agreement to any
entity controlled by the party, controlling or under common control or any
entity into which a party may be merged or consolidated or which purchases all
or substantially all of the assets of such party. In the case of a divestiture
of utility transmission or distribution facilities to a third party, the
Transport Capacity accrued to Alliant Energy as a result of Attachment by
McLeodUSA on the divested facilities shall be deducted from the total Transport
Capacity accrued by Alliant Energy, and McLeodUSA shall pay to the entity to
whom these assets are divested the fair market value of their rental, as
determined by the FCC from time to time. In the event that real estate is sold
or divested by Alliant Energy on which McLeodUSA facilities are located, Alliant
Energy shall convey an easement to McLeodUSA for its facilities located on such
real estate and may sell the land subject to the easement without removing the
McLeodUSA Attachments. Alliant Energy shall be entitled to continue to use all
Transport Capacity accrued under this Agreement without reduction by reason of
the sale of real estate. This Agreement shall extend to and bind the successors
and assigns of Alliant Energy and the permitted successors and the permitted
assigns of McLeodUSA.

XX.  TERMS

Failure to enforce any of the terms or conditions of this Agreement will not
constitute a waiver of any such terms or conditions. Alliant Energy and
McLeodUSA reserve the right to and may seek any and all remedies and relief
available at law. Neither McLeodUSA nor Alliant Energy will be deemed to have
waived any rights or remedies at law by virtue of executing this Agreement.
Bills for any charges under this Agreement will be payable within thirty days
after the date of invoice. Should any term of this Agreement be determined by a
court or other entity of competent jurisdiction to be unenforceable, all other

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terms of this Agreement will remain in full force and effect.

XXI.  NOTICES

All notices required by this Agreement will be in writing and sent to the
following address. Address changes may be made in writing. Notices will be
effective upon receipt unless otherwise stated.

McLeodUSA Telecommunications Services, Inc.
McLeodUSA Technology Park
 6400 C Street SW, PO Box 3177
Cedar Rapids, IA  52406-3177.
Attention: Law Group.

The Alliant Energy Utilities hereby designate:
Alliant Energy Real Estate and Right of Way Department
P.O. Box 769
Dubuque, Iowa 52004-0769

To receive any notices sent to any Alliant Energy Company pursuant to this
Agreement.

Dated this 24th day of November, 1999

Wisconsin Power and Light Co.      McLeodUSA Telecommunications
                                   Services, Inc.

By: /s/ K. K. Zuhlke               By: /s/ Stephen C. Gray
   -------------------                ----------------------
                                   Stephen C. Gray, President

IES Utilities, Inc.               Alliant Energy Corporate Services, Inc. as
                                  Agent for other Alliant Energy Companies

By: /s/ K. K. Zuhlke               By: /s/ Pamela J. Wegner
   -------------------                ---------------------
Interstate Power Corporation

By: /s/ K. K. Zuhlke
   --------------------

                                       10
<PAGE>

                                    EXHIBIT A

[CONFIDENTIAL MATERIAL HAS BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT FILED WITH THE SEC UNDER RULE 24B-2(B) AND HAS BEEN FILED SEPARATELY
WITH THE SEC]<PAGE>

                                                                    EXHIBIT 10.1

                        THE SAVINGS BANK OF MANCHESTER
                             EMPLOYMENT AGREEMENT

     This AGREEMENT, entered into on March 1st, 2000, by and between The Savings
Bank of Manchester (the "Institution" or the "Bank"), a state-chartered savings
institution, with its principal administrative office at 923 Main Street,
Manchester, CT, 06040, Connecticut Bancshares, Inc. (the "Holding Company"), a
corporation organized under the laws of the state of Delaware and the holding
company of the Institution, and Richard P. Meduski ("Executive").

     WHEREAS, the Institution wishes to continue to assure itself of the
services of Executive for the period provided in this Agreement; and

     WHEREAS, Executive is willing to continue to serve in the employ of the
Institution on a full-time basis in accordance with the terms of this Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and upon the other terms and conditions hereinafter provided, the parties hereby
agree as follows:

1.   CONSIDERATION PROVIDED BY EXECUTIVE.

     During the period of his employment hereunder, Executive agrees to serve as
President and Treasurer of the Institution.  Executive shall render
administrative and management services to the Institution such as are
customarily performed by persons in a similar executive capacity. During said
period, Executive also agrees to serve, if elected, as an officer and director
of the Holding Company or an affiliate.  Failure to reelect or reappoint
Executive as President and Treasurer of the Institution, or failure to nominate
or reelect Executive to the Board of Directors of the Institution, without the
consent of Executive, shall constitute a breach of this Agreement.

2.   TERMS.

     (a)  The period of Executive's employment under this Agreement shall be
deemed to have commenced as of the date first above written and shall continue
for a period of thirty-six (36) full calendar months.  Commencing on the first
year anniversary date of this Agreement, and continuing on each anniversary
thereafter, the disinterested members of the board of directors of the Bank
("Board") may extend the Agreement an additional year such that the remaining
term of the Agreement shall be thirty-six (36) months, unless Executive elects
not to extend the term of this Agreement by giving written notice in accordance
with Section 8 of this Agreement.  The Board will review the Agreement and
Executive's performance annually for purposes of determining whether to extend
the Agreement and the rationale and results thereof shall be included in the
minutes of the Board's meeting.  The Board shall give notice to Executive as
soon as possible after such review as to whether the Agreement is to be
extended.

     (b)  During the period of his employment hereunder, except for periods of
absence occasioned by illness, reasonable vacation periods, and reasonable
leaves of absence, Executive

                                       1
<PAGE>

shall devote substantially all his business time, attention, skill, and efforts
to the faithful performance of his duties hereunder including activities and
services related to the organization, operation and management of the
Institution and participation in community and civic organizations; provided,
however, that, with the approval of the Board, as evidenced by a resolution of
such Board, from time to time, Executive may serve, or continue to serve, on the
boards of directors of, and hold any other offices or positions in, companies or
organizations which, in the Board's judgment, will not present any conflict of
interest with the Institution, or materially affect the performance of
Executive's duties pursuant to this Agreement.

     (c)  Notwithstanding anything contained in this Agreement to the contrary,
Executive's employment with the Institution may be terminated by the Institution
or Executive during the term of this Agreement, subject to the terms and
conditions of this Agreement.

3.   CONSIDERATION PROVIDED BY THE INSTITUTION.

     (a)  The compensation specified under this Agreement shall constitute
consideration paid by the Institution in exchange for the duties described in
Section 1 of this Agreement. The Institution shall pay Executive as compensation
a salary of not less than $330,750 per year ("Base Salary"). Base Salary shall
include any amounts of compensation deferred by Executive under any tax-
qualified retirement plan or welfare plan or any other deferred compensation
arrangement maintained by the Bank or the Holding Company. Executive's Base
Salary shall be payable in accordance with the Bank's general payroll practices.
During the period of this Agreement, Executive's Base Salary shall be reviewed
at least annually; on or about December 30th of each year. Such review shall be
conducted by the Board or a committee designated by the Board, and the Board may
increase Executive's Base Salary at any time. The increased Base Salary shall
become the new "Base Salary" for purposes of this Agreement. In addition to the
Base Salary provided in this Section 3(a), the Institution shall also provide
Executive, at no cost to Executive, with all such other benefits as are provided
uniformly to permanent full-time employees of the Institution or the Holding
Company.

     (b)  The Institution will provide Executive with the opportunity to
participate in employee benefit plans, arrangements and perquisites
substantially equivalent to those in which Executive was participating or
otherwise deriving a benefit from immediately prior to the beginning of the term
of this Agreement, and the Institution will not, without Executive's prior
written consent, make any changes in such plans, arrangements or perquisites
which would adversely affect Executive's rights or benefits thereunder, without
separately providing for an arrangement that ensures Executive receives or will
receive the economic value that Executive would otherwise lose as a result of
such adverse affect.  Without limiting the generality of the foregoing
provisions of this Subsection (b), Executive will be entitled to participate in
or receive benefits under any employee benefit plans, whether tax-qualified or
otherwise, including, but not limited to, retirement plans, supplemental
retirement plans, pension plans, profit-sharing plans, health-and-accident plan,
medical coverage or any other employee benefit plan or arrangement made
available by the Institution now or in the future to its senior executives and
key management employees, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans and arrangements.  Executive
will be entitled to incentive

                                       2
<PAGE>

compensation and bonuses as provided in any plan or arrangement of the
Institution in which Executive is eligible to participate. Nothing paid to
Executive under any such plan or arrangement will be deemed to be in lieu of
other compensation to which Executive is entitled under this Agreement.

     (c)  In addition to the Base Salary provided for by paragraph (a) of this
Section 3 and other compensation provided for by paragraph (b) of this Section
3, the Institution shall pay or reimburse Executive for all reasonable expenses
incurred by Executive in performing his obligations under this Agreement,
including expenses associated with membership in clubs or organizations, as
mutually agreed to between the Board and Executive.

4.   PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

     (a)  Upon the occurrence of an Event of Termination (as herein defined)
during Executive's term of employment under this Agreement, the provisions of
this Section 4 shall apply.  As used in this Agreement, an "Event of
Termination" shall mean and include any one or more of the following: (i) the
termination by the Institution of Executive's full-time employment hereunder for
any reason other than Disability (as defined in Section 6 of this Agreement),
Retirement (as defined in paragraph (f) of this Section 4), termination governed
by Section 5(a) of this Agreement, or Termination for Cause (as defined in
Section 7 of this Agreement); or (ii) Executive's resignation from the
Institution's employ, upon any (A) notice to Executive by the Institution of
non-renewal of the term of this Agreement, (B) failure to elect or reelect or to
appoint or reappoint Executive as President and Treasurer, or failure to
nominate or reelect Executive to the Board of Directors of the Institution,
unless Executive consents to any such event, (C) a material change in
Executive's function, duties, or responsibilities, which change would cause
Executive's position to become one of lesser responsibility, importance, or
scope from the position and attributes thereof described in Section 1 of this
Agreement (and any such material change shall be deemed a continuing breach of
this Agreement), (D) a relocation of Executive's principal place of employment
by more than thirty-five (35) miles from its location at the effective date of
this Agreement, (E) liquidation or dissolution of the Institution or the Holding
Company, or (F) breach of this Agreement by the Institution.  Upon the
occurrence of any event described in clauses (A), (B), (C), (D), (E) or (F),
above, Executive shall have the right to elect to terminate his employment under
this Agreement by resignation upon not less than sixty (60) days prior written
notice given within a reasonable period of time not to exceed, except in case of
a continuing breach, four calendar months after the event giving rise to said
right to elect.

                                       3
<PAGE>

     (b)  Upon the occurrence of an Event of Termination on the Date of
Termination as defined in Section 8 of this Agreement, the Institution shall be
obligated to pay Executive, or, in the event of his subsequent death, his
beneficiary or beneficiaries, or his estate, as the case may be: (i) the amount
of the remaining payments and benefits that Executive would have earned if he
had continued his employment with the Institution or Holding Company during the
remaining unexpired term of this Agreement, based on Executive's Base Salary and
benefits provided at the Date of Termination, as set out in Sections 3(a) and
(b) of this Agreement, as the case may be, and (ii) the amount still due
Executive under any paragraph of Section 3 of this Agreement for service through
the Date of Termination. Such payments shall be  paid monthly during the
remaining term of the agreement following Executive's termination. Such
payments shall not be reduced in the event Executive obtains other employment
following termination of employment.

     (c)  Upon the occurrence of an Event of Termination, Executive will be
entitled to receive benefits due him under or contributed by the Institution or
the Holding Company on his behalf pursuant to any retirement, incentive, profit
sharing, bonus, performance, disability or other employee benefit plan
maintained by the Institution or the Holding Company on Executive's behalf to
the extent such benefits are not otherwise paid to Executive under a separate
provision of this Agreement.

     (d)  To the extent that the Institution or the Holding Company continues to
offer any life, medical, health, disability or dental insurance plan or
arrangement in which Executive participates in on the last day of his employment
(each being a "Welfare Plan"), after an Event of Termination (as herein
defined), Executive and his dependents shall continue participating in such
Welfare Plans, subject to the same premium contributions on the part of
Executive as were required immediately prior to the Event of Termination until
the earlier of (i) his death; (ii) his employment by another employer other than
one of which he is the majority owner; or (iii) the end of the remaining term of
this Agreement. If the Institution or the Holding Company does not offer the
Welfare Plans after the Event of Termination, then the Institution shall provide
Executive with a payment equal to the actuarial value of the provision of such
benefit for the period which runs until the earlier of (i) his death; (ii) his
employment by another employer other than one of which he is the majority owner;
or (iii) the end of the remaining term of this Agreement.

     (e)  In the event that Executive is receiving monthly payments pursuant to
Section 4(b) of this Agreement, on an annual basis, thereafter, between the
dates of January 1 and January 31 of each year, Executive shall elect whether
the balance of the amount payable under the Agreement at that time shall be paid
in a lump sum or on a pro rata basis. Such election shall be irrevocable for
the year for which such election is made.

     (f)  For the purpose of this Section 4, termination of Executive based on
"Retirement" shall mean termination in accordance with the Holding Company's or
Bank's retirement policy or in accordance with any retirement arrangement
established with Executive's consent with respect to him. Upon termination of
Executive upon Retirement, Executive shall be entitled to all

                                       4
<PAGE>

benefits under any retirement plan of the Holding Company or the Bank and other
plans to which Executive is a party or a participant.

5.   CHANGE IN CONTROL.

     (a)  For purposes of this Agreement, a "Change in Control" of the
Institution or the Holding Company shall mean an event of a nature that:
(i) would be required to be reported in response to Item 1(a) of the current
report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"); or (ii)
results in a Change in Control of the Institution or the Holding Company within
the meaning of the Change in Bank Control Act and the Rules and Regulations
promulgated by the Federal Deposit Insurance Corporation ("FDIC") at 12 C.F.R.
Section 303.4(a), with respect to the Institution, and the Rules and Regulations
promulgated by the Office of Thrift Supervision ("OTS") (or its predecessor
agency), with respect to the Holding Company, as in effect on the date of this
Agreement; or (iii) without limitation such a Change in Control shall be deemed
to have occurred at such time as (A) any "person" (as the term is used in
Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of voting securities of the Institution or the Holding Company
representing 20% or more of the Institution's or the Holding Company's
outstanding voting securities or right to acquire such securities except for any
voting securities of the Institution purchased by the Holding Company and any
voting securities purchased by any employee benefit plan of the Holding Company
or its Subsidiaries, or (B) individuals who constitute the Board on the date
hereof (the "Incumbent Board") cease for any reason to constitute at least a
majority thereof, provided that any person becoming a director subsequent to the
date hereof whose election was approved by a vote of at least three-quarters of
the directors comprising the Incumbent Board, or whose nomination for election
by the Holding Company's stockholders was approved by a Nominating Committee
solely composed of members which are Incumbent Board members, shall be, for
purposes of this clause (B), considered as though he were a member of the
Incumbent Board, or (C) a plan of reorganization, merger, consolidation, sale of
all or substantially all the assets of the Institution or the Holding Company or
similar transaction occurs or is effectuated in which the Institution or Holding
Company is not the resulting entity, or (D) a proxy statement has been
distributed soliciting proxies from stockholders of the Holding Company, by
someone other than the current management of the Holding Company, seeking
stockholder approval of a plan of reorganization, merger or consolidation of the
Holding Company or Institution with one or more corporations as a result of
which the outstanding shares of the class of securities then subject to such
plan or transaction are exchanged for or converted into cash or property or
securities not issued by the Institution or the Holding Company shall be
distributed, or (E) a tender offer is made for 20% or more of the voting
securities of the Institution or Holding Company then outstanding.

     (b)  If any of the events described in Section 5(a) of this Agreement
constituting a Change in Control have occurred or the Board has determined that
a Change in Control has occurred, Executive shall be entitled to the benefits
provided in paragraphs (c), (d), (e), (f) and (g) of this Section 5 upon his
termination of employment on or after the date the Change in Control occurs at
any time during the term of this Agreement due to (1) Executive's dismissal;

                                       5
<PAGE>

(2) Executive's voluntary resignation for any reason on or within the sixty (60)
day period immediately following the date a Change in Control has occurred; or
(3) Executive's resignation following any demotion, loss of title, office or
significant authority or responsibility, reduction in annual compensation or
benefits or relocation of his principal place of employment by more than 50
miles from its location immediately prior to the Change in Control, unless such
termination is because of his death, or Termination for Cause; provided,
however, that such payments shall be reduced by any payment made under Section 4
of this Agreement.

     (c)  Upon the occurrence of a Change in Control followed by Executive's
termination of employment, as provided in Section 5(b) of this Agreement, the
Institution shall pay Executive, or in the event of his subsequent death, his
beneficiary or beneficiaries, or his estate, as the case may be, as severance
pay or liquidated damages, or both, a sum equal to the greater of: (1) the
payments due for the remaining term of the Agreement or (2) three (3) times
Executive's average annual compensation for the five (5) preceding taxable
years. In determining Executive's average annual compensation, annual
compensation shall include Base Salary and any other taxable income, including
but not limited to amounts related to the granting, vesting or exercise of
restricted stock or stock option awards, commissions, bonuses, pension and
profit sharing plan contributions or benefits (whether or not taxable),
severance payments, retirement benefits, director or committee fees and fringe
benefits paid or to be paid to Executive or paid for Executive's benefit during
any such year.  At the election of Executive, which election is to be made prior
to or within thirty (30) days of the Date of Termination on or following a
Change in Control, such payment may be made in a lump sum (without discount for
early payment) on or immediately following the Date of Termination (which may be
the date a Change in Control occurs) or paid in equal monthly installments
during the thirty-six (36) months following Executive's termination.  In the
event that no election is made, payment to Executive will be made on a monthly
basis during the thirty-six (36) months following Executive's termination.

     (d)  Upon the occurrence of a Change in Control, Executive will be entitled
to receive benefits due him under or contributed by the Institution or the
Holding Company on his behalf pursuant to any retirement, incentive, profit
sharing, bonus, performance, disability or other employee benefit plan
maintained by the Institution or the Holding Company on Executive's behalf to
the extent such benefits are not otherwise paid to Executive under a separate
provision of this Agreement.

     (e)  Upon the occurrence of a Change in Control and Executive's termination
of employment in connection therewith, the Institution will cause to be
continued life, health, dental and disability coverage substantially identical
to the coverage maintained by the Institution or Holding Company for Executive
and any of his dependents covered under such plans prior to the Change in
Control.  Such coverage and payments shall cease upon the expiration of thirty-
six (36) full calendar months following the Date of Termination.  In the event
Executive's participation in any such plan or program is barred, the Institution
shall arrange to provide Executive and his dependents with benefits
substantially similar as those of which Executive and his dependents would
otherwise have been entitled to receive under such plans and programs from which
their continued participation is barred or provide their economic equivalent.

                                       6
<PAGE>

     (f)  The use or provision of any membership, license, automobile use, or
other perquisites shall be continued during the remaining term of the Agreement
on the same financial terms and obligations as were in place immediately prior
to the Change in Control. To the extent that any item referred to in this
paragraph will at the end of the term of this Agreement, no longer be available
to Executive, Executive will have the option to purchase all rights then held by
the Institution or the Holding Company to such item for a price equal to the
then fair market value of the item.

     (g)  In the event that Executive is receiving monthly payments pursuant to
Section 5(c) of this Agreement, on an annual basis, thereafter, between the
dates of January 1 and January 31 of each year, Executive shall elect whether
the balance of the amount payable under the Agreement at that time shall be paid
in a lump sum or on a pro rata basis pursuant to such section. Such election
shall be irrevocable for the year for which such election is made.

     (h)  Notwithstanding the preceding paragraphs of this Section 5, for any
taxable year in which Executive shall be liable, as determined for the payment
of an excise tax under Section 4999 of the Code (or any successor provision
thereto), with respect to any payment in the nature of the compensation made by
the Institution or the Holding Company (or for the benefit of) Executive
pursuant to this Agreement or otherwise, the Institution shall pay to Executive
an amount determined under the following formula:

     An amount equal to:  (E x P) + X

WHERE:

     X  =                E x P
           ---------------------------
           1 - [(FI x (1 - SLI)) + SLI + E + (M + PO)]

     E     =    the rate at which the excise tax is assessed under Section 4999
                of the Code;

     P     =    the amount with respect to which such excise tax is assessed,
                determined without regard to this Section 5;

     FI    =    the highest marginal rate of federal income, employment, and
                other taxes (other than taxes imposed under Section 4999 of the
                Code) applicable to Executive for the taxable year in question
                (including any effective increase in Executive's tax rate
                attributable to the disallowance of any deduction);

     SLI   =    the sum of the highest marginal rates of income and payroll tax
                applicable to Executive under applicable state and local laws
                for the taxable year in question (including any effective
                increase in Executive's tax rate attributable to the
                disallowance of any deduction);

     M     =    highest marginal rate of Medicare tax; and

                                       7
<PAGE>

     PO    =    adjustment for phase out of or loss of deduction, personal
                exemption or other similar items.

With respect to any payment in the nature of compensation that is made to (or
for the benefit of) Executive under the terms of this Section 5 or otherwise and
on which an excise tax under Section 4999 of the Code may or will be assessed,
the payment determined under this Section 5 shall be made to Executive on the
earliest of (i) the date the Institution is required to withhold such tax, (ii)
the date the tax is required to be paid by Executive, or (iii) at the time of
the Change in Control. It is the intention of the parties that the Institution
provide Executive with a full tax gross-up under the provisions of this Section,
so that on a net after-tax basis, the result to Executive shall be the same as
if the excise tax under Section 4999 (or any successor provisions) of the Code
had not been imposed. The tax gross-up may be adjusted if alternative minimum
tax rules are applicable to Executive.

     (i)  Notwithstanding the foregoing, if it is (i) initially determined by
the Institution's tax advisors that no excise tax under Section 4999 of the Code
is due with respect to any payment or benefit described in the first paragraph
of Section 5(c) of this Agreement and thereafter it is determined in a final
judicial determination or a final administrative settlement that the Section
4999 excise tax is due with respect to such payments or benefits, or (ii)
subsequently be determined in a final judicial determination or a final
administrative settlement to which Executive is a party that the excess
parachute payment as defined in Section 4999 of the Code, reduced as described
above, is more than the amount determined as "P," above (such greater amount
being hereafter referred to as the "Determinative Excess Parachute Payment"),
then the Institution's independent accountants shall determine the amount (the
"Adjustment Amount"), the Institution must pay to Executive, in order to put
Executive (or the Institution, as the case may be) in the same position as
Executive (or the Institution, as the case may be) would have been if the amount
determined as "P" above had been equal to the Determinative Excess Parachute
Payment.  In determining the Adjustment Amount, the independent accountants
shall take into account any and all taxes (including any penalties and interest)
paid by or for Executive or refunded to Executive or for Executive's benefit.
As soon as practicable after the Adjustment Amount has been so determined, the
Institution shall pay the Adjustment Amount to Executive.

     (j)  The Institution (or its successors) shall indemnify and hold
Executive harmless from any and all losses, costs and expenses (including
without limitation, reasonable attorney's fees, reasonable accountant's fees,
interest, fines and penalties of any kind) which Executive incurs as a result of
any administrative or judicial review of Executive's liability under Section
4999 of the Code by the Internal Revenue Service or any comparable state agency
through and including a final judicial determination or final administrative
settlement of any dispute arising out of Executive's liability for the Section
4999 excise tax or otherwise relating to the classification for purposes of
Section 280G of the Code of any payment or benefit in the nature of compensation
made or provided to Executive by the Institution or any successor thereto.
Executive shall promptly notify the Institution in writing whenever Executive
receives notice of the commencement of any judicial or administrative
proceeding, formal or informal, in which the federal tax treatment under Section
4999 of the Code of any amount paid or payable under this Agreement is being
reviewed or is in dispute (including a notice of audit or other inquiry

                                       8
<PAGE>

concerning the reporting of Executive's liability under Section 4999). The
Institution (and its successors) may assume control at its expense over all
legal and accounting matters pertaining to such federal or state tax treatment
(except to the extent necessary or appropriate for Executive to resolve any such
proceeding with respect to any matter unrelated to amounts paid or payable
pursuant to this contract) and Executive shall cooperate fully with the
Institution in any such proceeding. Executive shall not enter into any
compromise or settlement or otherwise prejudice any rights the Institution (or
its successors) may have in connection therewith without prior consent to the
Institution (or its successors). In the event that the Institution (or any
successor thereto) elects not to assume control over such matters, the
Institution (or any successor thereto) shall promptly reimburse Executive for
all expenses related thereto as and when incurred upon presentation of
appropriate documentation relating thereto.

6.   DISABILITY BENEFITS.

     In the event of the disability of Executive, the Institution shall continue
to pay Executive the compensation provided by this Agreement during the period
of his disability.  In the event Executive is disabled for a continuous period
exceeding 12 calendar months, the Institution may, at its election, terminate
this Agreement; provided, however, the last 6 months of such 12-month period
shall constitute the "elimination period" for benefit determination under the
Institution's Long-Term Disability Plan.  As used in this Agreement, the term
"disability" shall mean the complete and permanent inability of Executive to
perform his duties under this Agreement as determined by an independent
physician selected with the approval of the Institution and Executive.

7.   TERMINATION FOR CAUSE.

     The term "Termination for Cause" shall mean termination because of: (1)
Executive's personal dishonesty, willful misconduct, breach of fiduciary duty
involving personal profit, intentional failure to perform stated duties, willful
violation of any law, rule, regulation (other than traffic violations or similar
offenses), final cease and desist order or material breach of any provision of
this Agreement which results in a material loss to the Institution or the
Holding Company, or (2) Executive's conviction of a crime or act involving moral
turpitude or a final judgement rendered against Executive based upon actions of
Executive which involve moral turpitude.  For the purposes of this Section, no
act, or the failure to act, on Executive's part shall be "willful" unless done,
or omitted to be done, not in good faith and without reasonable belief that the
action or omission was in the best interests of the Institution or its
affiliates. Notwithstanding the foregoing, Executive shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
him a Notice of Termination which shall include a copy of a resolution duly
adopted by the affirmative vote of not less than three-fourths of the members of
the Board at a meeting of the Board called and held for that purpose (after
reasonable notice to Executive and an opportunity for him, together with
counsel, to be heard before the Board), finding that in the good faith opinion
of the Board, Executive was guilty of conduct justifying Termination

                                       9
<PAGE>

for Cause and specifying the particulars thereof in detail. The Executive shall
not have the right to receive compensation or other benefits for any period
after Termination for Cause. During the period beginning on the date of the
Notice of Termination for Cause pursuant to Section 8 of this Agreement through
the Date of Termination, stock options granted to Executive under any stock
option plan shall not be exercisable nor shall any unvested stock awards granted
to Executive under any stock benefit plan of the Institution, the Holding
Company or any subsidiary or affiliate thereof, vest. At the Date of
Termination, such stock options and any such unvested stock awards shall become
null and void and shall not be exercisable by or delivered to Executive at any
time subsequent to such Termination for Cause.

8.   NOTICE.

     (a)  Any purported termination by the Institution or by Executive shall be
communicated by Notice of Termination to the other party hereto.  For purposes
of this Agreement, a "Notice of Termination" shall mean a written notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision so
indicated.

     (b)  "Date of Termination" shall mean the date specified in the Notice of
Termination (which, in the case of a Termination for Cause, shall not be less
than thirty (30) days from the date such Notice of Termination is given);
provided, however, that if a dispute regarding Executive's termination exists,
the "Date of Termination" shall be determined in accordance with Section 8(c) of
this Agreement.

     (c)  If, within thirty (30) days after any Notice of Termination is given,
the party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, except upon the occurrence of a
Change in Control and voluntary termination by Executive in which case the Date
of Termination shall be the date specified in the Notice, the Date of
Termination shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties, by a binding arbitration award, or
by a final judgment, order or decree of a court of competent jurisdiction (the
time for appeal therefrom having expired and no appeal having been perfected)
and; provided, further, that the Date of Termination shall be extended by a
notice of dispute only if such notice is given in good faith and the party
giving such notice pursues the resolution of such dispute with reasonable
diligence.  Notwithstanding the pendency of any such dispute, the Institution
will continue to pay Executive his full compensation in effect when the notice
giving rise to the dispute was given (including, but not limited to, Base
Salary) and continue him as a participant in all compensation, benefit and
insurance plans in which he was participating when the notice of dispute was
given, until the dispute is finally resolved in accordance with this Agreement.
Amounts paid under this Section are in addition to all other amounts due under
this Agreement and shall not be offset against or reduce any other amounts due
under this Agreement.

                                       10
<PAGE>

9.   POST-TERMINATION OBLIGATIONS.

     All payments and benefits to Executive under this Agreement shall be
subject to Executive's compliance with this Section 9 for one (1) full year
after the earlier of the expiration of this Agreement or termination of
Executive's employment with the Institution.  Executive shall, upon reasonable
notice, furnish such information and assistance to the Institution as may
reasonably be required by the Institution in connection with any litigation in
which it or any of its subsidiaries or affiliates is, or may become, a party.

10.  NON-COMPETITION AND NON-DISCLOSURE.

     (a)  Upon any termination of Executive's employment hereunder pursuant to
Section 4 of this Agreement, Executive agrees not to compete with the
Institution for the period in which he receives payments under Section 4(b) of
this Agreement in any city, town or county in which Executive's normal business
office is located and the Institution has an office or has filed an application
for regulatory approval to establish an office, determined as of the effective
date of such termination, except as agreed to pursuant to a resolution duly
adopted by the Board. Executive agrees that during such period and within said
cities, towns and counties, Executive shall not work for or advise, consult or
otherwise serve with, directly or indirectly, any entity whose business
materially competes with the depository, lending or other business activities of
the Institution.  The parties hereto, recognizing that irreparable injury will
result to the Institution, its business and property in the event of Executive's
breach of this Subsection 10(a) agree that in the event of any such breach by
Executive, the Institution, will be entitled, in addition to any other remedies
and damages available, to an injunction to restrain the violation hereof by
Executive, Executive's partners, agents, servants, employees and all persons
acting for or under the direction of Executive.  Executive represents and admits
that in the event of the termination of his employment pursuant to Section 7 of
this Agreement, Executive's experience and capabilities are such that Executive
can obtain employment in a business engaged in other lines and/or of a different
nature than the Institution and that the enforcement of a remedy by way of
injunction will not prevent Executive from earning a livelihood.  Nothing herein
will be construed as prohibiting the Institution from pursuing any other
remedies available to the Institution for such breach or threatened breach,
including the recovery of damages from Executive.

     (b)  Executive recognizes and acknowledges that the knowledge of the
business activities and plans for business activities of the Institution as it
may exist from time to time, is a valuable, special and unique asset of the
business of the Institution.  Executive will not, during or after the term of
his employment, disclose any knowledge of the past, present, planned or
considered business activities of the Institution thereof to any person, firm,
corporation, or other entity for any reason or purpose whatsoever unless
expressly authorized by the Board of Directors or required by law.
Notwithstanding the foregoing, Executive may disclose any knowledge of banking,
financial and/or economic principles, concepts or ideas which are not solely and
exclusively derived from the business plans and activities of the Institution.
Further, Executive may disclose information regarding the business activities of
the Institution to the Connecticut Department of Banks, the FDIC and any other
applicable government agency

                                       11
<PAGE>

pursuant to a formal regulatory request. In the event of a breach or threatened
breach by the Executive of the provisions of this Section, the Institution will
be entitled to an injunction restraining Executive from disclosing, in whole or
in part, the knowledge of the past, present, planned or considered business
activities of the Institution or from rendering any services to any person,
firm, corporation, other entity to whom such knowledge, in whole or in part, has
been disclosed or is threatened to be disclosed. Nothing herein will be
construed as prohibiting the Institution from pursuing any other remedies
available to the Institution for such breach or threatened breach, including the
recovery of damages from Executive.

11.  SOURCE OF PAYMENTS.

     (a)  All payments provided in this Agreement shall be timely paid in cash
or check from the general funds of the Institution. The Holding Company,
however, unconditionally guarantees payment and provision of all amounts and
benefits due hereunder to Executive and, if such amounts and benefits due from
the Institution are not timely paid or provided by the Institution, such amounts
and benefits shall be paid or provided by the Holding Company.

     (b)  Notwithstanding any provision herein to the contrary, to the extent
that payments and benefits, as provided by this Agreement, are paid to or
received by Executive under the Employment Agreement dated March 1, 2000,
between Executive and the Holding Company, such compensation payments and
benefits paid by the Holding Company will be subtracted from any amounts due
simultaneously to Executive under similar provisions of this Agreement.

12.  EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

     This Agreement contains the entire understanding between the parties hereto
and supersedes any prior employment agreement between the Institution or any
predecessor of the Institution and Executive, except that this Agreement shall
not affect or operate to reduce any benefit or compensation inuring to Executive
of a kind elsewhere provided.  No provision of this Agreement shall be
interpreted to mean that Executive is subject to receiving fewer benefits than
those available to him without reference to this Agreement.

13.  NO ATTACHMENT.

     (a)  Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation, or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to affect any such action shall be null,
void, and of no effect.

     (b)  This Agreement shall be binding upon, and inure to the benefit of,
Executive and the Institution and their respective successors and assigns.

                                       12
<PAGE>

14.  MODIFICATION AND WAIVER.

     (a)  This Agreement may not be modified or amended except by an instrument
in writing signed by the parties hereto.

     (b)  No term or condition of this Agreement shall be deemed to have been
waived, nor shall there be any estoppel against the enforcement of any provision
of this Agreement, except by written instrument of the party charged with such
waiver or estoppel. No such written waiver shall be deemed a continuing waiver
unless specifically stated therein, and each such waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
such term or condition for the future as to any act other than that specifically
waived.

15.  REQUIRED PROVISIONS.

     Any payments made to Executive pursuant to this Agreement, or otherwise,
are subject to and conditioned upon compliance with 12 U.S.C. Section 1828(k)
and any rules and regulations promulgated thereunder.

16.  SEVERABILITY.

     If, for any reason, any provision of this Agreement, or any part of any
provision, is held invalid, such invalidity shall not affect any other provision
of this Agreement or any part of such provision not held so invalid, and each
such other provision and part thereof shall to the full extent consistent with
law continue in full force and effect.

17.  HEADINGS FOR REFERENCE ONLY.

     The headings of sections and paragraphs herein are included solely for
convenience of reference and shall not control the meaning or interpretation of
any of the provisions of this Agreement.

18.  GOVERNING LAW.

     This Agreement shall be governed by the laws of the State of Connecticut,
unless otherwise specified herein.

19.  ARBITRATION.

     Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration, conducted before a panel
of three arbitrators sitting in a location selected by the Executive within
fifty (50) miles from the location of the Institution, in accordance with the
rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having jurisdiction; provided,
however, that Executive shall be entitled to seek specific performance of his
right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection

                                       13
<PAGE>

with this Agreement.

20.  REINSTATEMENT OF BENEFITS.

     In the event any dispute or controversy arising under or in connection with
Executive's termination is resolved in favor of the Executive, whether by
judgment, arbitration or settlement, Executive shall be entitled to the payment
of any back-pay, including salary, bonuses and any other cash compensation,
fringe benefits and any compensation and benefits due Executive under this
Agreement.

21.  INDEMNIFICATION.

     During the term of this Agreement and for an additional period of seven
years thereafter, the Institution shall provide Executive (including his heirs,
executors and administrators) with coverage under a standard directors' and
officers' liability insurance policy at its expense, and shall indemnify, hold
harmless and defend Executive (and his heirs, executors and administrators) to
the fullest extent permitted under Connecticut law against all expenses and
liabilities reasonably incurred by him in connection with or arising out of any
action, suit or proceeding in which he may be involved by reason of his having
been a director or officer of the Institution (whether or not he continues to be
a director or officer at the time of incurring such expenses or liabilities),
such expenses and liabilities to include, but not be limited to, judgments,
court costs and attorneys' fees and the cost of reasonable settlements.

22.  SUCCESSOR TO THE INSTITUTION.

     The Institution shall require any successor or assignee, whether direct or
indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all the business or assets of the Institution or the Holding
Company, expressly and unconditionally to assume and agree to perform the
Institution's obligations under this Agreement, in the same manner and to the
same extent that the Institution would be required to perform if no such
succession or assignment had taken place.

                                       14
<PAGE>

                                  SIGNATURES

     IN WITNESS WHEREOF, The Savings Bank of Manchester and Connecticut
Bancshares, Inc. have caused this Agreement to be executed and their seals to be
affixed hereunto by their duly authorized officers and directors, and Executive
has signed this Agreement, on the 1st day of March, 2000.

ATTEST:                                 THE SAVINGS BANK OF MANCHESTER

/s/ Carole L. Yungk                BY:  /s/ Thomas A. Bailey
----------------------------------      ----------------------------------------
Secretary                                     For the Board of Directors

          [SEAL]

ATTEST:                                 CONNECTICUT BANCSHARES, INC.
                                              (Guarantor)

/s/ Carole L. Yungk                BY:  /s/ Thomas A. Bailey
----------------------------------      ----------------------------------------
Secretary                                     For the Board of Directors

          [SEAL]

WITNESS:                                EXECUTIVE

/s/ Harriett F. Duff                    /s/ Richard P. Meduski
-------------------------------------   ----------------------------------------
Harriett F. Duff                              Richard P. Meduski

                                       15

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