exv10w23



 





Exhibit 10.23




ICG Communications, Inc.




ICG Key Employee Retention Plan




     This Key Employee Retention Plan (this “Plan”) has been adopted by ICG
Communications, Inc., a Delaware corporation and ICG Telecom Group, Inc., a
Colorado corporation (collectively, “ICG”) effective as of May 3, 2004 (the
“Effective Date”) for the benefit of the Participants (as hereinafter defined).



Recitals




     ICG hereby acknowledges as follows:



     A. ICG, directly and through certain of its subsidiaries and affiliates
(collectively, the “ICG Entities”) operate telecommunications companies
offering a broad range of telecommunication services throughout the United
States (collectively, the “Businesses”).



     B. The ICG Entities currently are considering various strategic
transactions, any of which is likely to have a substantial impact on the future
prospects of ICG and the Businesses. ICG believes that the Participants are
critical to the successful accomplishment of any such transaction, and that a
one-time cash retention bonus is both necessary and appropriate to induce the
Participants to remain in the service of ICG and the ICG Entities and to devote
his or her full time, attention, energy and effort to the Businesses and such
transaction project.



     C. ICG wishes to clearly set forth the terms and conditions on which the
retention bonus shall be deemed to have been earned and be paid.



Plan Terms and Conditions




     ICG hereby acknowledges as follows:



          1. Definitions. For purposes of this Plan, the following terms shall have
the following meanings:



          “Change of Control” means any or all of the following (whether in one or a
series of related transactions):



          (a) any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) who is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under said Act), directly or indirectly, of
securities of ICG representing fifty percent (50%) or more of the total voting
power represented by the ICG’s then outstanding voting securities; or



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          (b) the date of the consummation of a merger or consolidation of ICG with
any other corporation that has been approved by the stockholders of record of
ICG, other than a merger or consolidation which would result in the voting
securities of ICG outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities
of the surviving entity) more than fifty percent (50%) of the total voting
power represented by the voting securities of ICG or such surviving entity
outstanding immediately after such merger or consolidation, or the stockholders
of record of ICG approve a plan of complete liquidation of ICG.



          “Contribution Amount” shall mean the amount of $3,697,994.00 in cash to be
paid to the ICG Key Employee Trust on the Effective Date or as soon thereafter
as reasonably practicable and such additional amounts as may be necessary from
time to time to satisfy either ICG’s obligations under the Plan or the costs of
administration of the ICG Key Employee Trust, which payments shall become
subject to the terms and conditions of the ICG Key Employee Trust Agreement.



          “Effective Date” means May 3, 2004.



          “ICG Entities” means ICG Communications, Inc., a Delaware corporation, ICG
Holdings, Inc., a Colorado corporation, ICG Equipment, Inc., a Colorado
corporation, ICG Telecom Group, Inc., a Colorado corporation, ICG Mountain
View, Inc., a Colorado corporation, ICG Telecom Group of Virginia, a Virginia
corporation, ICG ChoiceCom Management, LLC, a Delaware limited liability
corporation, and ICG ChoiceCom Management, LP, a Delaware limited partnership.



          “ICG Key Employee Trust” means that certain trust, the assets of which
shall comprise the Trust Amount, to be created pursuant to the ICG Key Employee
Trust Agreement for the purpose of making the Plan Payments under the Plan, the
beneficiaries of which shall be the Participants and the reversionary
beneficiary of which shall be ICG.



          “ICG Key Employee Trust Agreement” means that certain trust agreement
dated as of May 3, 2004, creating the Trust.



          “Officers” means Jeffrey Pearl, Richard Fish, Bernard Zuroff and Michael
Kallet.



          “Participant” means those individuals listed on Exhibit “A” hereto.



          “Plan Payments” means the payments contemplated by the Plan.



          “Retention Award” means, with respect to a Participant, the dollar amount
set forth opposite such Participant’s name.



          “Retention Bonus” is as defined in Section 2(a) hereof.



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          “Termination For Cause” means termination of a Participant upon a good
faith determination by the Chief Executive Officer or Chief Financial Officer
of ICG with respect to any Participant that any one or more of the following
has occurred:




          (a) The Participant shall have committed an act of fraud,
embezzlement, misappropriation or breach of fiduciary duty against an ICG
Entity;




          (b) The Participant shall have been convicted by a court of
competent jurisdiction of, or pleaded guilty or nolo contendere to, any
felony or any crime involving moral turpitude;




          (c) The Participant shall have committed a breach of any
confidentiality or non-compete obligation imposed by law or by covenants
contained in any written employment or confidentiality agreement between
Participant and any ICG Entity;




          (d) The Participant shall have willfully failed to perform his
duties on a regular basis and such willful failure shall have continued
for a period of ten (10) days after written notice to the Participant
specifying such willful failure in reasonable detail;




          (e) The Participant shall have refused, after explicit written
notice, to obey any lawful resolution by the Chief Executive Officer or
Chief Financial Officer of ICG that is consistent with such Participant’s
duties to an ICG Entity;




          (f) The Participant shall have committed acts of gross misconduct or
acts constituting grounds for immediate dismissal pursuant to the
effective employee handbook of the ICG Entity(ies); or




          (g) The Participant shall have engaged in the unlawful use or
possession of illegal drugs on the premises of any ICG Entity.



          “Trustee” shall mean the trustee of the ICG Key Employee Trust to be
identified by ICG.



          2. Retention Bonus.




          (a) On the terms and conditions of this Plan, ICG hereby grants and
awards a retention bonus to each of the Participants in an amount equal
to the Retention Award concerning such Participant (a “Retention Bonus”).




          (b) No Participant shall be entitled to a Retention Bonus under this
Plan unless and until such Participant’s right to such Retention Bonus
has vested under this Plan.




          (c) Subject to Section 2(d) hereof, a Participant’s right to a
Retention Bonus under this Plan shall vest as follows:



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          (i) A right to receive an amount equal to 25% of a Retention Award
shall vest on the date that is the earlier of (a) the date on which
a Participant is terminated by an ICG Entity for any reason other
than a Termination For Cause, (b) a Change of Control, and (c) at
the end of the third month after the date this Plan is approved by
the Board of Directors of ICG (the “First Vesting Date”);




          (ii) A right to receive an amount equal to 25% of a Retention
Award shall vest on the date following the First Vesting Date that
is the earlier of (a) the date on which a Participant is terminated
by an ICG Entity for any reason other than a Termination For Cause,
(b) a Change of Control, and (c) the end of the third month after
the First Vesting Date (the “Second Vesting Date”); and




          (iii) A right to receive an amount equal to 50% of a Retention
Award shall vest on the date following the Second Vesting Date that
is the earlier of (a) the date on which a Participant is terminated
by an ICG Entity for any reason other than a Termination For Cause,
(b) a Change of Control, (c) the end of the second month after the
Second Vesting Date, and (d) December 31, 2004 (the “Third Vesting
Date”).




          (d) No part of any Retention Bonus shall vest on a First Vesting
Date, a Second Vesting Date or a Third Vesting Date, as applicable,
unless, as of such date, the Participant is and at all times since the
Effective Date of this Plan has been continuously employed by ICG or an
ICG Entity.




          (e) Except as provided below, no part of any Retention Bonus shall
vest unless, on or before May 28, 2004, a Participant has agreed in
writing to waive all rights to any other bonus or severance payments to
which such Participant would otherwise be entitled under any other plan,
program or agreement of or with any ICG Entity. Notwithstanding the
foregoing, a Participant may assert a claim for the difference between
the amount of the Retention Bonus and the amount of any other severance
payment to which such Participant would otherwise be entitled under any
pre-existing severance plan, program or agreement of or with any ICG
Entity.



          3. Funding of ICG Key Employee Trust: On the Effective Date, or as soon
thereafter as reasonably practicable, ICG shall irrevocably and unconditionally
transfer to the ICG Key Employee Trust the Contribution Amount from which Plan
Payments, other than in respect of the Officers, and the costs of
administration of the ICG Key Employee Trust shall be funded in accordance with
the ICG Key Employee Trust Agreement. ICG shall have a reversionary interest
in the ICG Key Employee Trust with respect to any monies remaining in the ICG
Key Employee Trust that are not necessary to satisfy any obligations under the
Plan upon the date after which all of ICG’s obligations under the Plan and
under the ICG Key Employee Trust Agreement have been satisfied. At such time,
all such remaining monies shall



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be returned to ICG. If at any time the amount held in the ICG Key
Employee Trust is insufficient to make the Plan Payments and cover the costs of
administration of the ICG Key Employee Trust, ICG shall irrevocably and
unconditionally transfer to the ICG Key Employee Trust the amount of the
shortage.




          4. Payment. Any part of a Retention Bonus that has vested under this Plan
shall thereupon become due and payable, and ICG shall pay such Retention Bonus
to each Participant within five (5) calendar days of the date of vesting, but
in no event later than December 31, 2004. Such payment to Participants, other
than Officers, shall be made upon written request to the Trustee in accordance
with the terms of the ICG Key Employee Trust Agreement by any one of the
following: the Chief Executive Officer of ICG, the Chief Financial Officer of
ICG, or court order to be issued by a court of competent jurisdiction after all
conditions to payment hereunder have been met. Any Retention Bonus payable
under this Plan shall be treated as cash compensation by ICG to the Participant
and shall be subject to all required or customary withholding.



          5. Construction. This Plan shall be governed by and construed in
accordance with the laws of the State of Colorado. Expressions such as
“hereof,” “herein,” and “hereto” refer to this Plan, as amended from time to
time, and all exhibits or schedules attached hereto. Unless otherwise stated
in this Plan, “including” shall mean “including without limitation.” Wherever
the context so requires, the masculine shall include the feminine and neuter
and the singular shall include the plural. The captions and headings of the
articles, sections and paragraphs of this Plan are inserted solely for
convenience of reference and are not a part of, and are not intended to govern,
limit or aid in the construction or interpretation of any term or provision
herein. Unless otherwise specified in this Plan, references to articles or
sections refer to the articles and sections of this Plan.



          6. Understanding. The Participants acknowledge that they have carefully
read this Plan, that they have had sufficient time and opportunity to consider
its terms and to obtain legal advice, if desired, that they fully understand
its final and binding effect, that the only promises made to such Participants
are those stated above, and that they are signing this Plan voluntarily.



          7. Amendments. This Plan may be amended from time to time with respect to
any Participant only by written instrument executed by ICG and the Participant.



          8. Assignment. By virtue of the unique relationships and responsibilities
involved in the services provided by the Participants, the rights and
obligations of the Participants are not transferable or delegable and no
Participant shall transfer any right, title or interest in this Plan, nor shall
any such right, title or interest be subject to garnishment, attachment, lien,
levy or execution or be subject to transfer by operation of law. This Plan
shall bind and inure to the benefit of ICG and the Participants and each of
their respective successors, assigns, personal representatives, heirs and
legatees. Each person executing this Plan and/or all



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amendments or supplements to it binds and obligates himself/herself,
his/her present spouse, his/her estate, and all persons claiming by, through or
under him/her.




          9. Attorneys’ Fees. Except as otherwise provided herein, in the event of
arbitration or litigation concerning any provision of this Plan or the rights
and duties of any person in relation thereto, reasonable attorneys’ fees shall
be paid to the prevailing party.



          10. Severability. If any term, provision, covenant or condition of this
Plan is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the rest of this Plan shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.



          11. Entire Plan. This Plan constitutes the entire ICG Key Employee
Retention Plan for the benefit of the Participants. Except as provided for in
this Plan, there are no representations, plans, arrangements, or
understandings, oral or written, between or among ICG and the Participants
relating to the subject matter hereof of thereof that are not fully expressed
herein.



          12. Waiver. No waiver of any of the provisions of this Plan shall be
deemed a waiver of the right of any Party hereto to enforce strict compliance
with the provisions hereof in any subsequent instance.



     IN WITNESS WHEREOF, the parties hereto have duly executed this Plan as of
the date first above written.



ICG:




ICG Communications, Inc.




	 	 	 
	By:
	 	 
	

	 	








ICG Telecom Group, Inc.




	 	 	 
	By:
	 	 
	

	 	








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ACKNOWLEDGED BY:



















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ICG Communications, Inc.




First Amendment to ICG Key Employee Retention Plan




     This First Amendment to ICG Key Employee Retention Plan (this
“Amendment” and the “Plan”) has been adopted by ICG Communications,
Inc., a Delaware corporation and ICG Telecom Group, Inc., a Colorado
corporation (collectively, “ICG”) effective as of July 31, 2004.
Capitalized terms not otherwise defined herein shall have the meaning
ascribed to such terms in the Plan.



Recitals




     ICG hereby acknowledges as follows:



     A. ICG has approved the Plan effective May 3, 2004.



     B. ICG wishes to modify the terms and conditions on which the Retention
Bonus shall be deemed to have been vested and payable to Participants whose
employment is terminated by an ICG Entity for any reason other than a
Termination For Cause.



Amendment




     ICG hereby amends Section 2(d) of the Plan by adding the following
sentence at the end thereof:



     Notwithstanding anything in Section 2(c) or this Section 2(d) to the
contrary, any unvested amounts of a Participant’s Retention Bonus shall
immediately vest and be payable in accordance with Section 4 upon the
termination of a Participant’s employment by an ICG Entity for any reason other
than a Termination For Cause, provided that such Participant has been
continuously employed by an ICG Entity following the Effective Date through the
date of such termination.



Miscellaneous




     Except
as set forth above, the Plan remains in full force and effect.



     IN WITNESS WHEREOF, the parties hereto have duly executed this First
Amendment to ICG Key Employee Retention Plan as of the date first above
written.



ICG Communications, Inc.




	 	 	 	 	 
	By:

	 	/s/ BERNARD ZUROFF
	 	 
	

	 	
 	 	 
	

	 	Name: Bernard Zuroff	 	 
	

	 	Title: E.V.P., General Counsel & Secretary	 	 







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ICG Telecom Group, Inc.




	 	 	 	 	 
	By:

	 	/s/ BERNARD ZUROFF
	 	 
	

	 	
 	 	 
	

	 	Name: Bernard Zuroff	 	 
	

	 	Title: V.P., General Counsel & Secretary	 	 








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