Document:

exv10w2

Exhibit 10.2

RESTRICTED STOCK AGREEMENT

IOWA TELECOMMUNICATIONS SERVICES, INC.

2005 STOCK INCENTIVE PLAN

     THIS AGREEMENT, made effective as of this 24th day of September, 2009, by and
between Iowa Telecommunications Services, Inc., an Iowa corporation (the “Company”), and Alan L.
Wells (“Participant”).

W I T N E S S E T H:

     WHEREAS, Participant on the date hereof is an employee, officer, consultant, advisor or
director providing services to the Company or an Affiliate (as defined in the Plan) of the Company;
and

     WHEREAS, the Company wishes to grant a restricted stock award to Participant for shares of the
Company’s Common Stock pursuant to the Company’s 2005 Stock Incentive Plan (the “Plan”); and

     WHEREAS, the Administrator of the Plan has authorized the grant of a restricted stock award to
Participant;

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

     1. Grant of Restricted Stock Award. The Company hereby grants to Participant on the
date set forth above a restricted stock award (the “Award”) for One Hundred Thousand (100,000)
shares of Common Stock on the terms and conditions set forth herein, and subject to adjustment
pursuant to Section 4(c) of the Plan. The Company shall cause to be issued one or more stock
certificates representing such shares of Common Stock in Participant’s name, and shall hold each
such certificate until such time as the risk of forfeiture and other transfer restrictions set
forth in this Agreement have lapsed with respect to the shares represented by the certificate. The
Company may also place a legend on such certificates describing the risks of forfeiture and other
transfer restrictions set forth in this Agreement providing for the cancellation of such
certificates if the shares of Common Stock are forfeited as provided in Section 2 below. Until
such risks of forfeiture have lapsed or the shares subject to this Award have been forfeited
pursuant to Section 2 below, Participant shall be entitled to vote the shares represented by such
stock certificates and shall receive all dividends attributable to such shares, but Participant
shall not have any other rights as a shareholder with respect to such shares.

 

 

     2. Vesting of Restricted Stock.

          (a) The shares of Stock subject to this Award shall remain forfeitable until the risks of
forfeiture lapse according to the following vesting schedule (rounded to the nearest whole share):

	 	 	 	 	 
	 	 	Cumulative Percentage
	Vesting Date	 	of Shares Vested
	September 24, 2010
	 	 	33-1/3	%
	September 24, 2011
	 	 	66-2/3	%
	September 24, 2012
	 	 	100	%

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

     (b) Notwithstanding subsection (a) above, if Participant’s employment or other relationship
with the Company or any Affiliate ceases or is terminated under any of the following circumstances:

	 	•	 	by the Company without “Cause” in connection with a “Change of Control”
of the Company; or
	 
	 	•	 	by Participant for “Good Reason” in connection with a “Change of
Control” of the Company;

then, upon such cessation or termination of Participant’s employment or other relationship with the
Company or such Affiliate, the risk of forfeiture shall lapse with respect to all shares of Stock
subject to this Award and all such shares shall become vested. Notwithstanding the foregoing, if
prior to the forfeiture of any unvested shares of Stock subject to this Award, another Company
executive receives a restricted stock grant under the Plan that provides for the lapse of the risk
of forfeiture with respect thereto upon such executive’s death or disability, then the risk of
forfeiture with respect to the shares of Stock subject to this Award shall lapse (and such shares
shall vest) upon the occurrence of the same such event(s) (i.e. death or disability) with respect
to Participant.

     For purposes of this Section 2, the terms “Cause”, “Good Reason”, “Change of Control” and “in
connection with a Change of Control” shall mean as set forth in Participant’s Employment Agreement
dated September 24, 2009 between Participant and the Company.

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     3. Miscellaneous.

          (a) Employment-at-Will. This Agreement shall not confer on Participant any right with
respect to continuance of employment by or other relationship with the Company or any of its
Affiliates, nor will it interfere in any way with the right of the Company or any of its Affiliates
to terminate such employment or other relationship. Nothing in this Agreement shall be construed
as creating an employment contract for any specified term between Participant and the Company or
any of its Affiliates.

          (b) Securities Law Compliance. Participant shall not transfer or otherwise dispose of
the shares of Stock received pursuant to this Agreement until such time as counsel to the Company
shall have determined that such transfer or other disposition will not violate any state or federal
securities laws. Participant may be required by the Company, as a condition of the effectiveness
of this restricted stock award, to agree in writing that all Stock subject to this Agreement shall
be held, until such time that such Stock is registered and freely tradable under applicable state
and federal securities laws, for Participant’s own account without a view to any further
distribution thereof, that the certificates for such shares shall bear an appropriate legend to
that effect and that such shares will be not transferred or disposed of except in compliance with
applicable state and federal securities laws.

          (c) Mergers, Recapitalizations, Stock Splits, Etc. Pursuant and subject to Section 4
of the Plan, certain changes in the number or character of the Common Stock of the Company (through
sale, merger, consolidation, exchange, reorganization, divestiture (including a spin-off),
liquidation, recapitalization, stock split, stock dividend or otherwise) shall result in an
adjustment, reduction or enlargement, as appropriate, in Participant’s rights with respect to any
shares of Common Stock for which the risks of forfeiture have not lapsed (i.e., Participant shall
have such “anti-dilution” rights under the Award with respect to such events, but shall not have
“preemptive” rights). For example, if the Company is involved in a merger in which the outstanding
Common Stock is converted into the right to receive cash, stock of another company or other
consideration, then the shares of Common Stock for which the risks of forfeiture have not lapsed at
the time of such merger shall be converted into the right to receive such cash , stock or other
merger consideration, but such cash, stock or other merger consideration shall remain subject to
the risks of forfeiture pursuant to Section 2(a), subject to potential acceleration of the vesting
thereof pursuant to Section 2(b).

          (d) Withholding Taxes. In order to permit the Company to comply with all applicable
federal or state income tax laws or regulations, the Company may take such action as it deems
appropriate to insure that, if necessary, all applicable federal or state payroll, income or other
taxes are withheld from any amounts payable by the Company to Participant. If the Company is
unable to withhold such federal and state taxes, for whatever reason, Participant hereby agrees to
pay to the Company an amount equal to the amount the Company would otherwise be required to
withhold under federal or state law.

          (e) 2005 Stock Incentive Plan. The Award evidenced by this Agreement is granted
pursuant to the Plan, a copy of which Plan has been made available to Participant and is hereby
incorporated into this Agreement. This Agreement is subject to and in all respects limited

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and conditioned as provided in the Plan. All defined terms of the Plan shall have the same meaning
when used in this Agreement. The Plan governs this Agreement and, in the event of any questions as
to the construction of this Agreement or in the event of a conflict between the Plan and this
Agreement, the Plan shall govern, except as the Plan otherwise provides. Participant acknowledges
and agrees that the Plan and this Agreement may be amended as reasonably necessary to comply with,
or avoid adverse consequences to the Company and/or Participant under, future tax laws and
regulations.

          (f) Stock Legend. In addition to the legend described in Section 2, the Company may
require that the certificates for any shares of Common Stock issued to Participant hereunder shall
bear an appropriate legend to reflect the restrictions set forth in this Agreement.

          (g) Scope of Agreement. This Agreement shall bind and inure to the benefit of the
Company, its Subsidiaries and its successors and assigns and Participant and any successor or
successors of Participant permitted by this Agreement.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the day
and year first above written.

	 	 	 	 	 
	 	IOWA TELECOMMUNICATIONS SERVICES, INC.

 
	 	By:  	Donald G. Henry
 	 
	 	 	Its: 	Vice President and General Counsel 
	 	 	 	 
	 
	 	Alan L. Wells 	 
	 	Alan L. Wells	 
	 	 	 
	 	 	 
	 

4exv10w3

Exhibit 10.3

IOWA TELECOMMUNICATIONS SERVICES, INC.

CHANGE OF CONTROL AGREEMENT

     THIS CHANGE OF CONTROL AGREEMENT (this “Agreement”) is made and entered into this
21st day of September, 2009, by and between IOWA TELECOMMUNICATIONS SERVICES, INC., an
Iowa corporation (the “Company”) and                                         , an Iowa resident (“Executive”).

WITNESSETH:

     WHEREAS, Executive is a key management employee of the Company or of a subsidiary; and

     WHEREAS, the Board of Directors of the Company (the “Board of Directors”) recognizes
that the trend of consolidation in the telecom industry creates the possibility that a Change of
Control (as hereinafter defined) of the Company could occur at some time in the future, and that
such possibility, and the uncertainty it may cause, may result in the departure or distraction of
key management employees of the Company or of a subsidiary to the detriment of the Company; and

     WHEREAS, the Board of Directors has determined that the Company should encourage the continued
employment of Executive by the Company or a subsidiary and the continued dedication of Executive to
his assigned duties without distraction as a result of the circumstances arising from the
possibility of a Change of Control.

     NOW, THEREFORE, in consideration of the mutual promises herein contained, the Company and
Executive agree as follows:

     1. Defined Terms. For purposes of this Agreement, the following terms shall have the
meanings indicated below:

     “Bonus Plan” shall mean the Company’s annual incentive bonus plan and/or any
other formalized plans, if any, in which Executive is eligible to participate providing
incentive compensation payable in cash to eligible participants determined on the basis of
the Company’s and/or Executive’s performance during the Company’s fiscal year, but shall
expressly exclude, without limitation, the Company’s Deferred Compensation Plan, any plan
qualified or intended to be qualified under Section 401(a) of the Internal Revenue Code and
any plan supplementary thereto, the Company’s 2005 Stock Incentive Plan, and any other plan
or arrangement under which stock, stock options, stock appreciation rights, restricted stock
or similar options, stock, or rights are issued, any amendment or restatement of, or
successor plan to, any of the foregoing plans in effect from time to time, and any executive
fringe benefits.

     “Cause” for termination by the Company of Executive’s employment shall mean
only:

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

 

 

	 	(iii)	 	any failure of Executive to materially comply
with the reasonable policies, regulations and directives of the Company
as in effect from time to time;
	 
	 	(iv)	 	any act or omission on the part of Executive
which is clearly and materially harmful to the reputation or business
of the Company, including, but not limited to, conduct which is
inconsistent with federal and state laws respecting harassment of, or
discrimination against, one or more of the Company’s employees;
	 
	 	(v)	 	any material violation by Executive of the
provisions of any confidentiality agreement between the Company and
Executive and/or the provisions of Section 5 (Non-Compete) of this
Agreement; or
	 
	 	(vi)	 	any willful failure to perform the duties and
responsibilities of Executive’s position, unless occasioned by illness,
injury or “Disability.”

     “Change of Control” of the Company shall be deemed to have occurred if, at any
time subsequent to the date of this Agreement:

	 	(i)	 	any “person” (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange
Act”)) is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the
Company representing 50% or more of the combined voting power (with
respect to the election of directors) of the Company’s then outstanding
securities;
	 
	 	(ii)	 	individuals who as of the date of the execution
of this Agreement constitute the Board of Directors (and any new
director whose election to the Board of Directors or nomination for
election to the Board of Directors by the Company’s shareholders was
approved by a vote of at least two-thirds (2/3) of the members of the
Board of Directors then still in office) cease for any reason to
constitute a majority of the Board of Directors;
	 
	 	(iii)	 	the consummation of a merger or consolidation
of the Company with or into any other corporation, other than a
merger or consolidation which results in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity or a parent company of the surviving
entity) more than 50% of the combined voting power (with respect to the
election of directors) of the securities of the Company or of such
surviving entity or parent company thereof outstanding immediately
after such merger or consolidation; or
	 
	 	(iv)	 	the consummation of a plan of complete
liquidation of the Company or of an agreement for the sale or
disposition by the Company of all or substantially all of the Company’s
business or assets.

     “Disability” shall mean Executive’s inability to substantially perform the
majority of the duties and responsibilities of Executive’s position for more than one
hundred eighty (180) consecutive calendar days at any one time, by reason of physical or
mental illness or injury, as

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determined by an examining physician or mental health
professional selected by Executive and reasonably acceptable to the Company.
Notwithstanding anything herein to the contrary, such 180-calendar day period shall begin to
run from the date such disability is determined to have occurred, regardless of whether
Executive has any unused vacation. If Executive is unable to substantially perform the
majority of the duties and responsibilities of Executive’s position for less than 180 days
and then resumes performance of such duties and responsibilities, and if within one hundred
eighty (180) calendar days of the resumption of such duties Executive is again unable to
substantially perform the majority of the duties and responsibilities of Executive’s
position by reason of physical or mental illness or injury for a period of more than thirty
(30) consecutive calendar days, then such subsequent disability period shall be deemed to be
a continuation of the immediately preceding disability period.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

     “Good Reason” for termination by Executive of Executive’s employment following
a Change of Control shall mean the occurrence, without Executive’s express written consent,
of any one of the following:

	 	(i)	 	the failure by the Company to pay to Executive
any portion of Executive’s current compensation, or any reduction in
Executive’s annual base salary or in the bonus for which Executive is
eligible under the Bonus Plan, as in effect immediately prior to the
Change of Control;
	 
	 	(ii)	 	any action that materially diminishes
Executive’s position, authority, duties or responsibilities from those
in effect immediately prior to the Change of Control, other than any
change in Executive’s authority, duties or responsibilities made in the
ordinary course of business prior to the events described in clause
(ii) or (iii) of the definition of “Severance in connection with a
Change of Control”;
	 
	 	(iii)	 	any requirement that Executive regularly
render his services at a location other than one that is within
forty-five (45) miles of Newton, Iowa, other than necessary business
travel occasioned by the performance of Executive’s duties consistent
with such duties immediately prior to the Change of Control; provided,
however, that Executive may refuse to render his services from such
other location and need not actually render his services from such
other location in order to invoke the protection of this paragraph
(iii), it being sufficient that the Company has required Executive to
perform his services from such other location; or
	 
	 	(iv)	 	any material reduction in the aggregate value
of the Company’s non-stock related benefit plans provided to Executive
from those provided immediately prior to the Change of Control.

Any of the foregoing reasons may be waived by Executive. If Executive consents in writing
to such foregoing circumstance or if Executive does not resign for Good Reason within three
(3) months after the later of the date Executive acquires actual knowledge of the occurrence
of any of the foregoing reasons or the effective date of the change giving rise to Good
Reason (e.g. in the case of paragraph (ii), the effective date of a diminishment in
responsibilities, or in the case of paragraph (iii), the date as of which Executive is
required to actually begin performing his services from another location), then such Good
Reason, but only as to such specific event, shall be deemed waived.

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     “Section 409A” shall mean Section 409A of the Internal Revenue Code and any
proposed, temporary or final regulations, or any other guidance, promulgated with respect to
such Section 409A by the U.S. Department of Treasury or the Internal Revenue Service.

     “Severance” shall mean Executive’s “separation from service” (within the
meaning of Section 409A) by reason of resignation for “Good Reason” or discharge from
employment by the Company for any reason other than “Cause,” “Disability” or death.
Executive’s Severance shall be deemed to be “in connection with a Change of Control”
only if such occurs (i) upon or after a Change of Control and prior to the second
anniversary of a Change of Control, (ii) after the Company enters into an agreement for a
transaction, the consummation of which would result in a Change of Control, and before
termination or expiration of such agreement, or (iii) after a third party announces a tender
or exchange offer or proxy contest that, if completed, would result in a Change of Control
and before expiration or termination of such offer or contest.

     “Target Bonus” shall mean with respect to any Company fiscal year, the amount
of cash compensation that would be payable to Executive under the Bonus Plan for such year,
computed assuming that the level of performance with respect to a performance goal
identified in accordance with the terms of the Bonus Plan as the “target” level of
performance has been achieved. If the amount of compensation depends on the achievement of
multiple performance goals, the achievement of each target level of performance with respect
to each goal shall be assumed.

     2. Term of Agreement. Except as otherwise provided herein, this Agreement shall
commence on the date executed by the parties and shall continue in effect until December 31, 2014;
provided, however, that if a Change of Control of the Company shall occur during the term of this
Agreement, this Agreement shall continue in effect beyond the date of such Change of Control. If,
prior to the earlier of December 31, 2014 or a Change of Control, Executive’s employment with the
Company terminates, other than a Severance in connection with a Change of Control, for any reason
or no reason, or if Executive no longer serves as an executive of the Company, other than a
Severance in connection with a Change of Control, this Agreement (other than Sections 5 and 6
hereof) shall immediately terminate, and Executive shall not be entitled to any of the compensation
and benefits described in this Agreement. Any rights and obligations accruing before the
termination or expiration of this Agreement shall survive to the extent necessary to enforce such
rights and obligations.

     3. Change of Control Severance.

          (a) In the event of Executive’s Severance in connection with a Change of Control during the
Term, in consideration of Executive’s obligations under Section 5 (Non-Compete), the Company shall
provide to Executive:

	 	(1)	 	all salary and other compensation earned by
Executive through the date of Severance at the rate in effect
immediately prior to such Termination;
	 
	 	(2)	 	reimbursement of all reasonable, ordinary and
necessary travel, entertainment and other business related expenses
incurred by Executive (in accordance with the policies and procedures
established by the Company from time to time) in the performance of
Executive’s duties and responsibilities; provided,
however, that Executive shall properly account

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	 	 	 	for such
expenses in accordance with federal, state and local tax requirements
and the Company’s policies and procedures; and provided, further, that
in the case of taxable reimbursements or in-kind benefits that are
subject to Section 409A: such reimbursements or in-kind benefits shall
be pursuant to an objectively determinable nondiscretionary definition
of expenses eligible for reimbursement or the in-kind benefits to be
provided; the amount of such expenses that are eligible for
reimbursement, or in-kind benefits provided, during Executive’s taxable
year may not affect the expenses eligible for reimbursement, or in-kind
benefits to be provided, in any other taxable year; the reimbursement
must be paid to Executive promptly following Executive’s submission of
the expense report, but no later than the last day of Executive’s
taxable year following the taxable year in which the expense was
incurred; and the right to reimbursement or in-kind benefits is not
subject to liquidation or exchange for another benefit;
	 	(3)	 	any earned, accrued and unpaid bonus under the
Bonus Plan for a prior completed fiscal year;
	 
	 	(4)	 	a bonus under the Bonus Plan for the year in
which such Severance occurs based on actual results for the year, but
prorated based on days of employment during the year;
	 
	 	(5)	 	all other amounts that Executive is entitled to
receive under any compensation plan (including but not limited to
vacation policy ) maintained by the Company, subject to any
distribution requirements contained therein;
	 
	 	(6)	 	a cash severance payment equal to                      (___)
times the sum of Executive’s base salary in effect immediately prior to
such Change of Control plus the amount of Target Bonus with respect to
the year in which such Change of Control occurred;
	 
	 	(7)	 	if Executive’s Severance in connection with a
Change of Control occurs after the expiration of twelve (12) months but
prior to the expiration of twenty-four (24) months following said
Change of Control, a cash payment equal to the fair market value of all
            shares of restricted stock (or other property or rights into which such
restricted stock has been converted) issued to Executive prior to such
Severance that, as of the moment just prior to Executive’s Severance,
have neither vested to Executive nor been forfeited pursuant to the
terms of the 2005 Stock Incentive Plan or the restricted stock
agreement pertaining to said shares;
	 
	 	(8)	 	group health plan (including vision and dental
if offered by the Company to its active executive officers) coverage
for Executive, his spouse, and dependents until the earlier of (i)
                                         (___) months after the date of such Severance, or (ii) the
date Executive obtains coverage under a subsequent employer’s group
health plan; and
	 
	 	(9)	 	the title to the Company vehicle provided by
the Company for Executive’s personal use and in use by Executive
immediately prior to a Change of Control.

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The payments described in Section 3(a), subsections (1) through (7) and (9), shall be made as soon
as practicable following Executive’s Severance.

          (b) All cash amounts that are not to be paid within sixty (60) days after Executive’s
Severance under Subsection (a) shall within sixty (60) days after Executive’s Severance be placed
in escrow pursuant to an escrow agreement among the Company, Executive and an independent escrow
agent selected by mutual agreement of the Company and Executive, which agreement will provide for
an unconditional release of funds from escrow to pay Executive when required by this Agreement,
subject to Subsection 3(e) below, and which funds may not be otherwise released from escrow, except
that the funds will be subject to the claims of the Company’s general creditors under federal and
state law in the event the Company is unable to pay its debts as they become due or the Company is
subject to a pending proceeding as a debtor under the United States Bankruptcy Code.

          (c) The Company shall provide the group health plan coverage pursuant to Subsection (a) to
Executive on the same terms and conditions and at the same cost as it provides coverage to
similarly situated active executive officers of the Company. If Executive dies during the period
that he is entitled to coverage hereunder, his spouse and minor dependents shall be permitted to
continue coverage on the same basis as if Executive had survived.

          (d) Notwithstanding anything contained in this Agreement to the contrary, if Executive is a
“specified employee,” as determined under the Company’s policy for determining specified employees
on the date of Severance, all payments, benefits or reimbursements paid or provided under this
Agreement that constitute a “deferral of compensation” within the meaning of Section 409A, that are
provided as a result of a “separation from service” within the meaning of Section 409A and that
would otherwise be paid or provided during the first six months following such date of Severance
shall be accumulated through and paid or provided (together with interest at the applicable Federal
short-term rate, compounded semi-annually, in effect under Section 1274(d) of the Internal Revenue
Code as of the date of Severance) within 30 calendar days after the first business day following
the six month anniversary of such date of Severance (or, if Executive dies during such six-month
period, within 10 calendar days after Executive’s death). It is intended that the payments and
benefits provided under this Agreement shall either be exempt from the application of, or comply
with, the requirements of Section 409A. This Agreement shall be construed, administered, and
governed in a manner that effects such intent, and the Corporation shall not take any action that
would be inconsistent with such intent. Without limiting the foregoing, the payments and benefits
provided under this Agreement may not be deferred, accelerated, extended, paid out or modified in a
manner that would result in the imposition of an additional tax under Section 409A upon Executive.
Although the Company shall use its best efforts to avoid the imposition of taxation, interest and
penalties under Section 409A, the tax treatment of the benefits provided under this Agreement is
not warranted or guaranteed. Neither the Company, its subsidiaries nor their respective directors,
officers, employees or advisors shall be held liable for any
taxes, interest, penalties or other monetary amounts owed by Executive or other taxpayer as a
result of the Agreement.

          (e) All payments made to Executive under this Section 3 shall be reduced by amounts (i)
required to be withheld in accordance with federal, state and local laws and regulations in effect
at the time of payment, or (ii) owed to the Company by Executive for any amounts advanced, loaned
or misappropriated.

     4. IRC Section 280G Cutback. Notwithstanding any other provision of this Agreement,
if any payments or benefits in the nature of compensation pursuant to this Agreement or otherwise
would in the aggregate result in Executive receiving a “parachute payment” within the meaning of
Section 280G of the Internal Revenue Code, then such payment or benefits shall be cut back to the
minimum extent necessary to avoid an excise tax under Section 4999 of the Internal Revenue Code,
but if and only if applying such cutback

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would result in Executive retaining a larger after-tax
amount. In determining the extent to which such cutback is necessary, an appropriate portion of
the Severance shall be treated as reasonable compensation for Executive’s obligations pursuant to
Section 5. The determination of such portion shall be by mutual agreement of the Company and
Executive, or if requested by Executive, the determination will be made by a valuator mutually
acceptable to the Company and Executive whose fees and expenses shall be paid by the Company. If
any payments or benefits are to be cut back, the payments and benefits to be paid latest in time
shall be cut back first, and in the event that payments and benefits to be cut back are to be paid
at the same time, non-cash payments and benefits shall be cut back before cash payments.

     5. Non-Compete.

          (a) Executive agrees that during the term of this Agreement so long as he remains employed
with the Company and, if Executive’s employment with the Company is terminated during the term of
this Agreement for any reason, for a period of twenty-four months after such termination of
Executive’s employment, Executive will not, directly or indirectly:

	 	(i)	 	engage in any manner or capacity (e.g., as an
advisor, principal, agent, partner, officer, director, stockholder,
employee, member of any association or otherwise) in the business of
providing local exchange telecommunications services, long distance or
Internet access in the State of Iowa or any local telephone exchange
area in which the Company provides local exchange services;
	 
	 	(ii)	 	in any way interfere or attempt to interfere
with the Company’s relationships with any of the Company’s then-current
customers with the Company with whom Executive has had material contact
within the last year, suppliers, vendors or investors; or
	 
	 	(iii)	 	employ or attempt to employ any of the
Company’s employees, or the employees of any enterprise managed or
owned by the Company, on behalf of any other entity competing with the
Company;

          (b) If it is determined by a final non-appealable judgment of a court of law or equity that
Executive has breached this Section 5, the Company shall be relieved of further severance payments
to Executive pursuant to Section 3, and Executive shall repay to the Company all severance payments
previously received pursuant to Section 3.

          (c) Executive will, prior to accepting employment with any new employer, inform that employer
of this Agreement and provide that employer with a copy of this Section 5 if Section 5 remains in
effect pursuant to the terms of this Agreement as of the first day of Executive’s employment with
the new employer.

     6. Enforcement of Non-Compete Covenant. The parties acknowledge that the Company will
suffer irreparable harm if Executive breaches Section 5 of this Agreement, either during or after
the Term. Accordingly, the Company shall be entitled to any right or remedy it may have, under
this Agreement or otherwise, at law or equity, including but not limited to an injunction,
enjoining or restraining Executive from any violation of Section 5 of this Agreement, without any
requirement that the Company post a bond or other security. However, such right of equitable
relief shall not be construed to be in lieu of any other rights, including, but not limited to, the
right to seek a remedy at law for damages plus costs and reasonable attorney fees.

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     7. General Provisions.

          (a) The Company hereby represents and warrants to Executive as follows: The execution and
delivery of this Agreement and the performance by the Company of the actions contemplated hereby
have been duly authorized by all necessary corporate action on the part of the Company. This
Agreement is a legal, valid and legally binding obligation of the Company enforceable in accordance
with its terms. Neither the execution or delivery of this Agreement nor the consummation by the
Company of the actions contemplated hereby (i) will violate any provision of the articles of
incorporation or bylaws (or other charter documents) of the Company, (ii) will violate or be in
conflict with any applicable law or any judgment, decree, injunction or order of any court or
governmental agency or authority, or (iii) will violate or conflict with or constitute a default
(or an event of which, with notice or lapse of time or both, would constitute a default) under or
will result in the termination of, accelerate the performance required by, or result in the
creation of any lien, security interest, charge or encumbrance upon any of the assets or properties
of the Company under, any contract, commitment, understanding, arrangement, agreement or
restriction of any kind or character to which the Company is a party or by which the Company or any
of its properties or assets may be bound or affected.

          (b) No amount or benefit shall be payable under this Agreement unless there shall have
occurred a Severance in connection with a Change of Control during the term of this Agreement. In
no event shall payments in accordance with this Agreement be made in respect of more than one
Severance in connection with a Change of Control.

          (c) This Agreement shall not be construed as creating an express or implied contract of
employment and, except as otherwise agreed in writing between Executive and the Company, Executive
shall not have any right to be retained in the employ of the Company or of a subsidiary.
Executive’s right, following the occurrence of a Change of Control, to terminate his employment
under this Agreement for Good Reason shall not be affected by Executive’s Disability or incapacity.

     8. Indemnification. The Company shall procure and maintain in force during the Term
of this Agreement Director and Officer liability insurance in such amount or amounts as the Company
may determine, which insurance shall include coverage of the office of Vice President. The Company
shall indemnify Executive to the maximum extent authorized by the provisions of the Iowa Business
Corporation Act. In the event that the Company and Executive enter into a separate agreement
relating to indemnification, during the period of time that such agreement remains in effect the
provisions of this Section shall be superseded thereby to the extent such agreement gives Executive
greater rights;
provided, however there shall be no obligation of the Company to enter into such separate
indemnification agreement.

     9. Notices. Any notice required or permitted to be given under this Agreement shall
be in writing and (i) hand delivered, (ii) sent by registered or certified mail, return receipt
requested, or (iii) sent by overnight courier requiring signature for delivery to the Company or
Executive, as appropriate, at the following addresses:

	 	 	 
	If to the Company:

	 	General Counsel
	 

	 	Iowa Telecommunications Services, Inc.
	 

	 	403 W. Fourth Street North
	 

	 	Newton, IA 50208
	 
	 	 
	If to Executive:

	 	To the last address the Company has on file for Executive

8

 

The parties shall notify each other in writing of any changes in the notification addresses at the
time such changes occur.

     10. Assignment. This Agreement shall inure to the benefit of and be binding upon the
Company, and the Company’s legal successors. Executive shall not have any right to assign or
delegate his obligations under this Agreement; provided, however, that in the event of Executive’s
death, any amounts owed to Executive hereunder shall be paid to his estate, except for those rights
pursuant to Section 8 which extend, and shall be provided, to his spouse and dependents.

     11. Modification. This Agreement shall not be changed, modified or amended in any
respect except by a written instrument signed by both parties.

     12. Entire Agreement. All prior discussions, negotiations and employment agreements
between the Company and Executive regarding the payment of severance to Executive in connection
with Change of Control, whether written or oral, are hereby terminated and superseded in their
entirety by this Agreement. In addition, if and to the extent Section 5 (Non-Compete) is
inconsistent with any provision contained in any other prior agreement between Executive and
Company, the provisions of Section 5 shall control.

     13. Choice of Law. This Agreement shall be governed by the applicable laws of the
State of Iowa.

     14. Savings Clause. Any provision of this Agreement which is held by any court having
jurisdiction of the parties and this subject matter to be unlawful shall be modified and made
lawful by such court to the extent permitted by law, and in accordance with the decisions of Iowa
courts.

     15. Action by Board of Directors. Any action required by the Company’s Board of
Directors under this Agreement may be taken by the affirmative vote of a majority of the members of
the Board, or of a duly authorized committee having authority over the matter in question, present
at a meeting thereof, not counting Executive; provided that termination for “Cause” pursuant to
Section 6(a) shall require the approval of two-thirds of the members of the Board of Directors
present at a meeting thereof, not counting Executive.

     16. Legal Fees. In the event of any dispute between Executive and the Company
following a Change of Control of the Company, the Company shall reimburse Executive for attorneys’
fees and expenses reasonably incurred by Executive in such dispute within thirty (30) days after
Executive remits invoices for such fees and expenses; provided, however, Executive shall be
required to reimburse the Company, within thirty (30) days following such determination, for the
fees and expenses attributable to those issues upon which Executive is judicially determined not to
have prevailed upon the merits.

     17. Withholding Taxes. The Company shall be entitled to deduct from all payments or
benefits provided for under this Agreement any federal, state or local income and
employment-related taxes required by law to be withheld with respect to such payments or benefits.

     18. Release. Notwithstanding anything contained herein to the contrary, the Company
shall only be obligated to pay or provide any benefits under Section 3 if: (i) within the 50-day
period after the date of Severance, Executive first executes a release substantially in the form
attached hereto as Exhibit A; and (ii) Executive does not revoke the release during the seven-day
revocation period prescribed by the Age Discrimination in Employment Act of 1967, as amended, or
any similar revocation period, if applicable. Within twenty-five days (25) after the date of
Severance giving rise to an obligation to make payments or provide benefits under Section 3, the
Company shall deliver to Executive such form of release.

9

 

     19. Captions. The headings or captions set forth in this Agreement are for
convenience only and shall not affect the meaning or interpretation of this Agreement.

     IN WITNESS WHEREOF, this Change of Control Agreement has been executed by the parties
effective as of the day and year first above written.

	 	 	 	 	 
	 	IOWA TELECOMMUNICATIONS SERVICES, INC.

 
	 	By:  	
 	 
	 
	 	Its:  	
 	 
	 
	 
	 	
 	 
	 

10

 

EXHIBIT A

WAIVER AND RELEASE AGREEMENT

(Pursuant to Section 18 of Change of Control Agreement)

     THIS WAIVER AND RELEASE AGREEMENT (this “Agreement”) is made and entered into this
___day of                     , 20___, by and between IOWA TELECOMMUNICATIONS SERVICES, INC., an Iowa
corporation (the “Company” or “Iowa Telecommunications”) and                                         , an
Iowa resident (“Executive”).

     WHEREAS, the parties have entered into a Change of Control Agreement dated                      ___, 2009
(the “CIC Agreement”); and

     WHEREAS, Executive’s employment has been or will be terminated at the close of business on
                                        ; and

     WHEREAS, Executive is required to sign this Waiver and Release in order to receive the payment
of certain severance benefits under the CIC Agreement following termination of employment.

     NOW, THEREFORE, in consideration of the mutual promises contained in this Agreement, it is
agreed as follows:

     1. Release of Claims. Specifically in consideration of the payments to be made and
the benefits to be received by Executive pursuant to Section 3 of the CIC Agreement (the “Severance
Benefits”) certain of which Executive acknowledges are in addition to payments and benefits to
which Executive would be entitled absent the CIC Agreement (except as otherwise provided in the
Employment Agreement), by signing this Agreement Executive, for himself and anyone who has or
obtains legal rights or claims through Executive, agree to the following:

     (a) Executive, for himself, his heirs, representatives, agents, successors and assigns hereby
releases and forever discharges Iowa Telecommunications from any and all manner of past, present,
or future claims, demands, actions, causes of action, administrative claims, liability, damages,
claims for punitive or liquidated damages, claims for attorney’s fees, costs and disbursements, any
individual or class action claims, or demands of any kind whatsoever, including but not limited to
any claims for salary, vacation, PTO, severance, incentive compensation, deferred compensation,
benefits, bonus, expenses, notice pay, commission, or any claims for other compensation, any claims
for fraud, misrepresentation, fraudulent inducement, promissory estoppel, any claims under the CIC
Agreement, breach of covenant of good faith and fair dealing, implied contract, defamation, any
other claims arising by statute, in tort or contract, any federal or state constitutional claims,
any claims for discrimination based on sex, race, color, creed, religion, age, national origin,
sexual orientation, gender identity, disability, veteran’s status, or any other protected class
status, any claims for unlawful sexual or other harassment, retaliation or reprisal, any claims
arising under Title VII of the Civil Rights Act, 42 U.S.C. § 2000e et seq., the Age
Discrimination in Employment Act, 29 U.S.C. § 621 et seq., the Americans with
Disabilities Act, 42 U.S.C. § 12101, et seq., the Employee Retirement Income
Security Act (ERISA), 29 U.S.C. §1001, et seq., the Family and Medical Leave Act,
29 U.S.C. § 2601, et seq., the Sarbanes-Oxley Act, 15 U.S.C. § 7201 et
seq., the Iowa Civil Rights Act, any other claims under any Iowa law, or any other claims
arising under any federal, any state or local statute, law or regulation, or any claims in any
manner relating to his employment, association with or separation from the Company, arising in law
or equity, whether known, suspected or unknown, and however originating or existing, from the
beginning of time to the date of the signing of this Agreement.

     (b) Executive agrees to and hereby does release and discharge the Company not only from any
and all claims that Executive could make on his own behalf, but also those that may or could be
brought

 

 

by any other person, entity or organization on his behalf or for his benefit, and Executive
specifically waives any right to become, and agrees not to become, a member of any class in any
proceeding or case in which a claim or claims against the Company arises, in whole or in part, from
any event which occurred from the beginning of time to the date of this Agreement.

     (c) Executive does not, by signing this Agreement, release or waive (i) any rights or claims
that may arise after it is signed; (ii) any vested interest Executive may have in any 401(k) by
virtue of his employment with the Company; (iii) any state unemployment compensation to which
Executive may be entitled; (iv) any rights of indemnification under Section 8 of CIC Agreement
according to the terms of such section or any other rights to indemnification Executive may have
pursuant to the Company’s Articles of Incorporation or bylaws or any separate indemnification
agreement (if any); (v) any rights under any directors and officers liability insurance policy
which provides for coverage for the Executive, including, without limitation, the Directors and
Officers liability insurance described in Section 8 of the CIC Agreement; (vi) any rights the
Executive has under Sections 3 or 17 of the CIC Agreement; or (vii) the right to file a charge of
discrimination with a governmental agency, including the Equal Employment Opportunity Commission,
although Executive agrees that Executive will not be entitled to recover any award of money,
compensation, attorneys’ fees or damages, whatsoever, if Executive file a charge of discrimination
or other claim or if Executive has a charge or other claim filed on his behalf.

     (d) Iowa Telecommunications and the Company, as used in this Section 1 and Section 2 below,
shall mean the Iowa Telecommunications Services, Inc., and any parent, subsidiary, division,
affiliated and related entities, and in both their individual and corporate or official capacities,
its and their present and former officers, directors, shareholders, trustees, employees, agents,
attorneys, insurers, representatives and consultants, and the current and former trustees or
administrators of any pension or other benefit plan applicable to the employees or former employees
of the Company, and the predecessors, successors and assigns of all of the above.

     2. Non-Admission. It is expressly understood that this Agreement does not constitute,
nor shall it be construed as, an admission by the Company or Executive of any liability or unlawful
conduct whatsoever. The Company and Executive specifically deny any liability or unlawful conduct.

     3. Notification of Rights under the Federal Age Discrimination in Employment Act (29
U.S.C. § 621 et seq.). Executive is hereby notified of his right to rescind the release of
claims in regard to claims arising under the Federal Age Discrimination in Employment Act, 29
U.S.C. § 621, et seq., within seven (7) calendar days of his signing of this
Agreement. The rescission must be in writing and delivered or mailed to: General Counsel, Iowa
Telecommunications Services, Inc., 403 W. Fourth Street North, Newton, IA 50208. If delivered by
mail, the rescission must be post-marked within the required period, properly addressed to the
individual noted above at the above address, and sent by certified mail, return receipt requested.
It is further understood that, if Executive rescinds the release of claims in accordance with this
Section, Executive will not be entitled to the separation pay set forth in clauses (3), (4), (6)
and (7) of Subsection 3(a) of the CIC Agreement, and Executive must immediately reimburse the
Company for any such payments if they have already been made to Executive or on his behalf. This
Agreement will be effective upon the expiration of the 7-day period noted in this Section if not
rescinded by the Executive within such 7-day period.

     4. Notice of Right to Consult Attorney and Twenty-One (21) Calendar Day Consideration
Period. By signing this Agreement, Executive acknowledges and agrees that the Company has
informed Executive by this Agreement that (i) Executive has the right to consult with an attorney
of his choice prior to signing this Agreement, and (ii) Executive is entitled to twenty-one (21)
calendar days from the receipt of this Agreement to consider whether the terms are acceptable to
Executive. The Company encourages Executive to use the full 21-day period to consider this
Agreement but Executive has the right, if he chooses, to sign this Agreement prior to the
expiration of the twenty-one (21) day period.

     5. Return of Property. Executive acknowledges, by his signature to this Agreement,
that Executive has returned to the Company all corporate documents, records, files, credit cards,
computer disks

2

 

and tapes, computer access cards, codes and keys, file access codes and keys,
building and office access cards, codes and keys, materials, equipment and other property of the
Company which is in Executive’s possession (and any copies thereof).

     6. Nondisparagement. Executive agrees that Executive will not make any disparaging or
negative remarks, whether oral or in writing, regarding the Company, its officers, directors or
employees. The Company agrees that it will not make any disparaging or negative remarks, whether
oral or in writing, regarding Executive.

     7. Communications with Prospective Employers. The Company and Executive agree that
all inquiries from prospective employers should be directed to                                                             , at the
Company, and Mr./Ms. ___will inform the individual inquiring that it is the policy of the
Company to confirm only dates of employment and position last held of former employees.

     8. Noncompetition Obligations. Executive understands and agrees that his obligations
under Section 5, and the corresponding provisions of Sections 6, and 9-19 of the CIC Agreement
remain in full force according to their terms, and survive the termination of his employment.

     9. Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of the Company.

     10. Entire Agreement. This Agreement states the entire agreement of the parties with
respect to the subject matter hereof and supersedes and merges all prior negotiations, agreements,
and understandings, if any, with respect to the subject matter hereof. No modification, release,
discharge, or waiver, of any provision of this Agreement shall be of any force or effect unless
made in writing and signed by the parties hereto, and specifically identified as a modification,
release, or discharge, of this Agreement. If any term, clause, or provision of this Agreement
shall for any reason be adjudged invalid, unenforceable, or void, the same shall not impair or
invalidate any of the other provisions of this Agreement, all of which shall be performed in
accordance with their respective terms.

     Executive acknowledges that Executive has not relied on any representations or statements,
whether oral or written, other than the express statements of this Agreement, in signing this
Agreement.

     11. Acknowledgment of Reading and Understanding. By signing this Agreement, Executive
acknowledges that he has read this Agreement, including the release of claims contained in Section
1, and understands that the release of claims is a full and final release of all claims
Executive may have against the Company and the other entities and individuals covered by the
release. By signing, Executive also acknowledges and agrees that he has entered into this
Agreement knowingly and voluntarily.

IN WITNESS WHEREOF, this Waiver and Release Agreement has been executed by the parties effective as
of the day and year first above written.

	 	 	 	 	 
	 	IOWA TELECOMMUNICATIONS SERVICES, INC.

 
	 	By:  	
 	 
	 
	 	Its:  	
 	 
	 
	 
	 	
 	 
	 

3

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