<PAGE>

                                                                   Exhibit 10.21
                                 PAETEC CORP.

                       1998 INCENTIVE COMPENSATION PLAN
                       --------------------------------

          1.  Preamble.  This document sets forth the terms of the PaeTec Corp.
              --------
1998 Incentive Compensation Plan ("Plan"), which shall become effective as of
July 1, 1998, contingent upon the approval of the Plan by the shareholders of
PaeTec Corp.

          2.  Purpose.  The purpose of the Plan is to promote the interests of
              -------
the Company by providing current and future employees of the Company and its
Subsidiaries with an equity or equity-based interest in the Company, so that the
interests of such individuals will be closely associated with the interests of
shareholders by reinforcing the relationship between shareholder gains and
individual compensation.  Pursuant to this Plan, eligible individuals may
receive (a) Incentive Stock Options, (b) Non-Qualified Stock Options, and/or (c)
Stock Appreciation Rights.

          3.  Eligibility.  Employees of the Company or its Subsidiaries shall
              -----------
be eligible to participate in the Plan.  Participants shall be selected by the
Committee based upon such factors as the eligible individual's past and
potential contributions to the success, profitability, and growth of the
Company.

          4.  Definitions.  As used in this Plan,
              -----------

              (a)  "Board of Directors" shall mean the Board of Directors of the
Company.

              (b)  "Committee" shall mean the committee appointed by the Board
of Directors to administer the Plan in accordance with Paragraph 13.

              (c)  "Common Stock" shall mean the Class A Common Stock, par value
$0.01 per share, of the Company.

              (d)  "Company" shall mean PaeTec Corp.

              (e)  "Disinterested Director" shall mean a member of the Board of
Directors who has not, at any time within one year prior to the member's
participating in the administration of the Plan, received stock, stock options,
stock appreciation rights or any other equity security of the Company pursuant
to the Plan or any other plan of the Company or its affiliates.

              (f)  "Eligible Individuals" shall mean persons described in
Paragraph 3; provided that only employees of the Company shall be eligible for
grants of Incentive Stock Options.
<PAGE>

              (g)  "Incentive Stock Option" shall mean the right granted to an
Eligible Individual to purchase Common Stock under this Plan, the grant,
exercise and disposition of which are intended to comply with, and to be
governed by, Internal Revenue Code Section 422.

              (h)  "Market Value per Share" shall mean, at any date, the fair
market value per share of the shares of Common Stock, as determined in good
faith by the Committee.

              (i)  "Non-Qualified Stock Option" shall mean the right granted to
an Eligible Individual to purchase Common Stock under this Plan, the grant,
exercise and disposition of which are not intended to be subject to the
requirements and limitations of Internal Revenue Code Section 422.

              (j)  "Optionee" shall mean the Eligible Individual to whom an
Option Right is granted pursuant to an agreement evidencing an outstanding
Incentive Stock Option or Non-Qualified Stock Option.

              (k)  "Option Right" shall mean the right to purchase a share of
Common Stock upon exercise of an outstanding Incentive Stock Option or Non-
Qualified Stock Option.

              (l)  "Stock Appreciation Right" or "SAR" shall mean an Eligible
Individual's right to receive a payment described in Paragraph 9.

              (m)  "Subsidiary" shall mean any corporation in which (at the time
of determination) the Company owns or controls, directly or indirectly, 50
percent or more of the total combined voting power of all classes of stock
issued by the corporation.

          5.  Shares Available Under the Plan.
              -------------------------------

              (a)  The shares of Common Stock which may be made the subject of
rights or awards granted pursuant to this Plan may be treasury shares or shares
of original issue or a combination of the foregoing.

              (b)  Subject to adjustments in accordance with Paragraph 11 of
this Plan, the maximum number of shares of Common Stock that may be the subject
of Option Rights or Stock Appreciation Rights granted pursuant to this Plan
shall be 4,300,000 shares of Common Stock which are made available by virtue of
this Plan.

          6.  Grants of Option Rights Generally.  The Committee may, from time
              ---------------------------------
to time and upon such terms and conditions as it may determine, authorize the
grant of Option Rights to Eligible Individuals.  Each such grant may utilize any
or all of the shares of Common Stock authorized under this Plan and shall be
subject to all of the limitations, contained in the following provisions:

              (a)  Each grant shall specify whether it is intended as a grant of
Incentive Stock Options or Non-Qualified Stock Options.

                                      -2-
<PAGE>

              (b)  Each grant shall specify the number of shares of Common Stock
to which it pertains.

              (c)  Successive grants may be made to the same Eligible Individual
whether or not any Option Rights previously granted to such Eligible Individual
remain unexercised.

              (d)  Upon exercise of an Option Right and subject to approval by
the Committee, the entire option price shall be payable (i) in cash, (ii) by the
transfer to the Company by the Optionee of shares of Common Stock with a value
(Market Value per Share times the number of shares) equal to the total option
price, or (iii) by a combination of such methods of payment. Payment may not be
made with Common Stock issued to the Optionee by the Company upon his or her
prior exercise of an option under this Plan or any other option plan unless the
Common Stock received upon that prior exercise shall have been held by the
Optionee for at least one year.

              (e)  Each grant of Option Rights shall be evidenced by an
agreement executed on behalf of the Company by any officer designated by the
Committee for this purpose and delivered to and accepted by the Eligible
Individual and shall contain such terms and provisions, consistent with this
Plan, as the Committee may approve.

          7.  Special Rules for Grants of Incentive Stock Options.
              ---------------------------------------------------

              (a)  Each grant of Incentive Stock Options shall specify an option
price per share not less than the Market Value per Share on the date the Option
Right is granted; provided that, if an Incentive Stock Option is granted to any
Eligible Individual who, immediately after such option is granted, is considered
to own stock possessing more than ten percent of the combined voting power of
all classes of stock of the Company, or any of its subsidiaries, then the option
price per share shall be not less than 110 percent of the Market Value per Share
on the date of the grant of the option, and such option may be exercised only
within five years of the date of the grant.

              (b)  The duration of each Incentive Stock Option by its terms
shall be not more than ten years from the date the option is granted as
specified by the Committee.

              (c)  The Committee shall establish the time or times within the
option period when the Incentive Stock Option may be exercised in whole or in
such parts as may be specified from time to time by the Committee, except that
Incentive Stock Options shall not be exercisable earlier than six months after
the Optionee commences employment with the Company or one of its subsidiaries,
nor later than ten years following the date the option is granted. The date of
grant of each Option Right shall be the date of its authorization by the
Committee.

              (d)  Except as may be provided by the Committee at the time of
grant, (i) in the event of the Optionee's termination of employment due to any
cause, including death or

                                      -3-
<PAGE>

retirement, rights to exercise Incentive Stock Options shall cease, except for
those which are exercisable as of the date of termination, and (ii) rights that
are exercisable as of the date of termination shall remain exercisable for a
period of 30 days following a termination of employment for any cause other than
death or disability, and for a period of one year following a termination due to
death or disability. However, no Incentive Stock Option shall, in any event, be
exercised after the expiration of ten years from the date such option is
granted, or such earlier date as may specified in the option.

              (e)  No Incentive Stock Options shall be granted hereunder to any
Optionee that would allow the aggregate fair market (determined at the time the
option is granted) of the stock subject of all post-1986 incentive stock
options, including the Incentive Stock Option in question, which such Optionee
may exercise for the first time during any calendar year, to exceed $100,000.
The term "post-1986 incentive stock options" shall mean all rights, which are
intended to be "incentive stock options" under the Internal Revenue Code,
granted on or after January 1, 1987 under any stock option plan of the Company
or its Subsidiaries. If the Company shall ever be deemed to have a "parent," as
such term is used for purposes of Section 422 of the Internal Revenue Code, then
rights intended to be "incentive stock options" under the Internal Revenue Code,
granted after January 1, 1987 under such parent's stock option plans, shall be
included with the terms of the definition of "post-1986 incentive stock
options".

          8.  Special Rules for Grants of Non-Qualified Stock Options.
              -------------------------------------------------------

              (a)  Except as may be provided by the Committee at the time of
grant, (i) in the event of the Optionee's termination of employment due to death
or disability, rights to exercise Non-Qualified Stock Options that are
exercisable as of the date of termination shall remain exercisable for one year
following termination, (ii) in the event of the Optionee's termination of
employment due to any other reason, the rights to exercise Non-Qualified Stock
Options that are exercisable as of the date of termination shall remain
exercisable for 30 days following termination, and (iii) the right to exercise
Non-Qualified Stock Options that are not exercisable as of the date of
termination shall be forfeited. Notwithstanding the foregoing, the Committee
may, at any time, extend the time within which a Non-Qualified Stock Option may
be exercised.

              (b)  The Company shall not issue stock certificates to an Optionee
who exercises a Non-Qualified Stock Option, unless payment of the required
lawful withholding taxes has been made to the Company by check, payroll
deduction or other arrangements satisfactory to the Committee.

                                      -4-
<PAGE>

          9.  Stock Appreciation Rights.
              -------------------------

              (a)  The Committee may, from time to time, authorize the grant of
Stock Appreciation Rights (SARs) to Eligible Individuals. The Committee may
grant SARs in "tandem" with Option Rights, independent of Option Rights, or in
any combination of these forms of SARs. The Committee shall have complete
discretion in determining the number of SARs granted and in determining the
terms and conditions pertaining to such SARs; provided, however, that in no
event shall any SAR become exercisable within six months of its grant nor shall
any SAR be granted for a term of more than ten years.

              (b)  SARs granted in "tandem" with Option Rights may be exercised
for all or part of the shares of Common Stock subject to the related Option
Right upon the surrender of the right to exercise the equivalent portion of the
related Option Right. A "tandem" SAR may be exercised only with respect to the
Shares for which its related Option Right is then exercisable. Notwithstanding
any other provision of this Plan to the contrary, with respect to an SAR granted
in "tandem" with an Incentive Stock Option:

                   (i)   the SAR will expire no later than the expiration of the
                         underlying Incentive Stock Option;

                   (ii)  the value of the payout with respect to the SAR may be
                         for no more than 100 percent of the difference between
                         the option price of the underlying Incentive Stock
                         Option and the fair market value of the shares subject
                         to the underlying Incentive Stock Option at the time
                         the SAR is exercised; and

                   (iii) the SAR may be exercised only when the fair market
                         value of the shares subject to the Incentive Stock
                         Option exceeds the option price of the Incentive Stock
                         Option.

              (c)  Each SAR grant shall be evidenced by a written agreement that
shall contain such terms and conditions as the Committee shall determine.

              (d)  Upon exercise of an SAR, a Participant shall be entitled to
receive payment from the Company in an amount determined by multiplying:

                   (i)   The excess (if any) of the Market Value per Share on
                         the date of exercise over the Market Value per Share on
                         the date the SAR was granted; by

                   (ii)  The number of shares of Common Stock with respect to
                         which the SAR is exercised.

At the discretion of the Committee, the payment upon exercise of an SAR may be
in cash, in shares of Common Stock of equivalent value, or in some combination
thereof.

                                      -5-
<PAGE>

              (e)  Each SAR award agreement shall set forth the rights of the
Participant following termination of the Participant's employment with the
Company and its Subsidiaries. Such provisions shall be determined in the sole
discretion of the Committee and shall be included in the award agreement entered
into with Participants, and need not be uniform among all SARs issued pursuant
to this Plan, and may reflect distinctions based on the reasons for termination
of employment.

          10. Transferability.  No Option Right shall be transferable by an
              ---------------
Optionee other than by will or the laws of descent and distribution. Option
Rights shall be exercisable during the Optionee's lifetime only by the Optionee.
Other rights granted pursuant to this Plan shall not be subject to assignment,
alienation, lien, transfer, sale or exchange.

          11. Adjustments.  The Committee may make or provide for such
              -----------
adjustments in the maximum numbers of shares of Common Stock specified in
Paragraph 5 of this Plan, in the numbers of shares of Common Stock covered by
other rights granted hereunder, and in the prices per share applicable under all
such rights, as the Committee in its sole discretion, exercised in good faith,
may determine is equitably required to prevent dilution or enlargement of the
rights of Eligible Individuals that otherwise would result from any stock
dividend, stock split, combination of shares, recapitalization or other change
in the capital structure of the Company, merger, consolidation, spin-off,
reorganization, partial or complete liquidation, issuance of rights or warrants
to purchase securities, or any other transaction or event having an effect
similar to any of the foregoing.

          12. Fractional Shares.  The Company shall not be required to issue any
              -----------------
fractional share of Common Stock pursuant to this Plan. The Committee may
provide for the elimination of fractions or for the settlement of fractions in
cash.

          13. Administration of the Plan.
              --------------------------

              (a)  This Plan shall be administered by the Committee, which shall
consist of not less than three Disinterested Directors.  No right shall be
granted under this Plan to any member of the Committee so long as membership
continues.

              (b)  The Committee shall have the power to interpret and construe
any provision of this Plan. The interpretation and construction by the Committee
of any provision of this Plan or of any agreement evidencing the grant of rights
hereunder, and any determination by the Committee pursuant to any provision of
this Plan or of any such agreement, shall be final and binding. No member of the
Committee shall be liable for any such action or determination made in good
faith.

              (c)  Notwithstanding any other provision of this Plan, the
Committee may impose such conditions on the exercise of any right granted
hereunder (including, without limitation, the right of the Committee to limit
the time of exercise to specified periods) as may be

                                      -6-
<PAGE>

required to satisfy the requirements of Section 16 (or any successor rule) of
the Securities Exchange Act of 1934, as may be amended from time to time, or any
successor statute.

          14. Amendments, Termination, Etc.
              -----------------------------

              (a)  This Plan may be amended from time to time by resolutions of
the Board of Directors, provided that no such amendment shall (i) increase the
maximum number of shares of Common Stock specified in Paragraph 5 of this Plan
(except that adjustments authorized by Paragraph 11 of this Plan shall not be
limited by this provision), or (ii) change the definition of "Eligible
Individuals", without further approval by the shareholders of the Company.

              (b)  The Committee may, with the concurrence of the affected
Optionee, cancel any agreement evidencing Option Rights granted under this Plan.
In the event of such cancellation, the Committee may authorize the granting of
new Option Rights (which may or may not cover the same number of shares which
had been the subject of the prior agreement) in such manner, at such option
price and subject to the same terms and conditions as, under this Plan, would
have been applicable had the canceled Option Rights not been granted.

              (c)  In the case of any Option Right not immediately exercisable
in full, the Committee in its discretion may accelerate the time at which the
Option Right may be exercised, subject to the limitation described in Paragraph
7(c).

              (d)  Notwithstanding any other provision of the Plan to the
contrary, (i) the Plan may be terminated at any time by resolutions of the Board
of Directors, and (ii) no rights shall be granted pursuant to this Plan after
June 30, 2008.

                                      -7-
<PAGE>

                                                                   Exhibit 10.21
                                                                     (Continued)

                                 AMENDMENT #1


                                 PAETEC CORP.

                       1998 INCENTIVE COMPENSATION PLAN
                       --------------------------------



          This sets forth Amendment #1 to the Paetec Corp. 1998 Incentive
Compensation Plan, effective as of July 1, 1998 ("Plan").  Effective as of July
1, 1999, the Plan shall be amended as follows:

          1.   Section 4 of the Plan shall be amended by deleting current
subsection 4(e) and by redesignating subsequent subsections of Section 4.

          2.   Subsection 4(e) (formerly subsection 4(f)) shall be clarified to
provide in its entirety as follows:

          "Eligible Individuals" shall mean persons described in
          Paragraph 3; provided that only individuals who are
          employees of the Company or its Subsidiaries shall be
          eligible for grants of Incentive Stock Options.

          3.   Subsection 5(b) of the Plan shall be amended to increase the
number of shares of Common Stock available by virtue of the Plan from 4,300,000
shares to 4,500,000 shares.

          4.   The first sentence of subsection 7(c) of the Plan shall be
amended and restated to provide in its entirety as follows:

     The Committee shall establish the time or times within the option
     period when the Incentive Stock Option may be exercised in whole
     or in such parts as may be specified from time to time by the
     Committee, except that Incentive Stock Options shall not be
     exercisable earlier than six months, nor later than ten years,
     following the date the option is granted.

          5.   Section 8 of the Plan shall be amended by adding a new subsection
8(c) to the Plan. New subsection 8(c) shall provide in its entirety as follows:

               (c)  The Committee shall establish the time or times
          within the option period when the Non-Qualified Stock Option
          may be exercised in whole or in such parts as may be
          specified from time to time by the Committee, except that
          Non-Qualified Stock Options shall not be exercisable earlier
          than six months, nor later than ten years, following the
<PAGE>

          date the option is granted. The date of grant of each Option
          Right shall be the date of its authorization by the
          Committee.

          6.   Subsection 13(a) of the Plan shall be amended and restated to
provide in its entirety as follows:

          This Plan shall be administered by the Committee, which shall consist
          of such number of persons as the Board of Directors shall determine.

          Executed this 20th day of August 1999.




                                     PAETEC CORP.


                                  By: /s/ Arunas A. Chesonis
                                     -----------------------------


<PAGE>

                                                                   Exhibit 10.21
                                                                     (Continued)

                                 AMENDMENT #2

                                 PAETEC CORP.

                       1998 INCENTIVE COMPENSATION PLAN
                       --------------------------------

          This sets forth Amendment #2 to the PaeTec Corp. 1998 Incentive
Compensation Plan, established effective as of July 1, 1998 ("Plan"). Effective
as of February 28, 2000, the Plan shall be amended as follows:

          1.  Paragraph 2 of the Plan shall be amended by adding two new
     sentences at the end of Paragraph 2 to provide as follows:

          In addition, pursuant to this Plan, eligible individuals who receive
          and exercise options to acquire shares of common stock of a Subsidiary
          pursuant to any stock-based incentive compensation plan maintained by
          the Subsidiary, and who exchange shares so acquired for shares of
          Common Stock pursuant to a grant or exchange agreement to which the
          Company is a party, shall be issued shares of Common Stock pursuant to
          this Plan to the extent provided in such grant or exchange agreement
          and ratified by the Committee.  Shares of Common Stock acquired in the
          manner described in the preceding sentence shall be referred to in
          this Plan as "Exchange Shares."

          2.  Paragraph 5(b) of the Plan shall be amended and restated to
     provide in its entirety as follows:

              (b)  Subject to adjustment in accordance with Paragraph 5(c) and
          Paragraph 11 of this Plan, the maximum number of shares of Common
          Stock that may be the subject of Option Rights or Stock Appreciation
          Rights granted pursuant to this Plan shall be 5,300,000 shares of
          Common Stock, in the aggregate, which are made available by virtue of
          this Plan.
<PAGE>

          3.  A new Paragraph 5(c) shall be added to the Plan and shall provide
in its entirety as follows:

              (c)  Notwithstanding the number of shares of Common Stock made
          available by virtue of this Plan in accordance with Paragraph 5(b),
          until such time as shares of Common Stock are actively traded on an
          established securities market, the number of shares of Common Stock
          available under this Plan shall be reduced to reflect the number of
          stock options and warrants granted under any stock-based incentive
          compensation plan adopted by any Subsidiary ("Subsidiary Option
          Plan").  The reduction in the number of shares that may be granted
          under this Plan will be determined as follows:

          (i) At any time that options are to be granted under a Subsidiary
              Option Plan, the fully diluted fair market value of a share of
              Common Stock (taking into account the consideration to be received
              by the Company from the exercise of options and warrants
              outstanding at the time of such valuation), and the portion of
              such fair market value that is attributable to the Subsidiary that
              is proposing to issue options under a Subsidiary Option Plan
              (expressed as a fully diluted fair market value per share of the
              Subsidiary, taking into account the consideration to be received
              by the Subsidiary from the exercise of outstanding options and
              warrants issued by the Subsidiary), shall be established based
              upon the latest determination made by the Subsidiary Committee (as
              defined below) as to the relative enterprise values of the Company
              and of the Subsidiary (which determination in no event shall be
              earlier than three months preceding the applicable option grant
              date). The Subsidiary Committee shall make such determination in
              its good faith, reasonable judgment (it being understood that,
              until Common Stock becomes publicly-traded, the Subsidiary
              Committee may consider the per share purchase price in the latest
              private placement by the Company of its capital stock in
              determining the enterprise values of the Company and its
              Subsidiaries) and, to the extent the Subsidiary Committee deems
              appropriate or desirable, upon consultation with the Company's
              independent financial advisors. The determination of the
              Subsidiary Committee shall be ratified by the members of the
              Committee. In the event that the "CCS Group Director" (as such
              term is defined in the Stockholders Agreement dated September 9,
              1999, by and among the Company, Arunas A. Chesonis, Jeffrey
              Sudikoff, the Christopher E. Edgecomb Living Trust and former
              stockholders of Campuslink Communications Systems, Inc.defined in
              the June 4 Agreement and Plan of Reorganization by and among the
              Company, PaeTec Merger Corp. and Campuslink Communications
              Systems, Inc., as amended) does not objects to the Subsidiary
              Committee's determination concerning the respective enterprise
              values of the Company and/or the Subsidiary within sixty (60) days
              of his receipt of information regarding the exercise price for the
              option in question and the conversion rate between Subsidiary
              shares and shares of Common Stock then in effect, the Subsidiary
              Committee's, the Committee and the CCS Group Director shall
              discuss and resolve in good faith the objections raised by the CCS
              Group Director. determination in respect of such option shall
              conclusively be deemed reasonable for purposes of this paragraph.
              As used herein, the term "Subsidiary Committee" refers to a
              committee designated by the Board of Directors of the Subsidiary
              to establish the exercise prices of options granted under the
              Subsidiary Option Plan, and the conversion rate

                                      -2-
<PAGE>

                between shares of such Subsidiary issued under its
                Subsidiary Option Plan and shares of Common Stock issuable
                upon conversion thereof.

          (ii)  Based on the valuations determined in accordance with the
                preceding subparagraph (i), a number of shares will be
                subtracted from the 5,300,000 shares of Common Stock available
                under the Plan upon the grant of options under a Subsidiary
                Option Plan, calculated as follows:

                    Reduction Amount = (SOG x SSFMV) / PTFMV

                              where,

                         SOG  =    number of shares with respect to which
                                   options are being granted by the Subsidiary
                                   under the Subsidiary Option Plan

                         SSFMV =   fully diluted fair market value per share of
                                   the Subsidiary at the time of the option
                                   grant

                         PTFMV =   fully diluted fair market value per share of
                                   Common Stock at the time of the option grant

          (iii) In the event an individual acquires shares of common stock of a
                Subsidiary under the Subsidiary Option Plan, which shares were
                previously included in a calculation described in subparagraphs
                5(c)(i) and (ii), and then exchanges some or all of the acquired
                shares for shares of Common Stock pursuant to a stock option
                grant or exchange agreement among the Company, the Subsidiary
                and the individual ("Grant Agreement"), the actual number of
                shares of Common Stock received in the exchange (which number
                shall be determined pursuant to the Grant Agreement and ratified
                by the Committee) shall be compared to the product of (A) the
                total "Reduction Amount" determined for all shares of common
                stock of the Subsidiary included in the applicable calculation
                described in subparagraphs 5(c)(i) and (ii), times (B) a
                fraction, the numerator of which is the number of shares of
                common stock of the Subsidiary surrendered in the exchange, and
                the denominator of which is the total number of shares of common
                stock of the Subsidiary included in the applicable calculation
                described in subparagraphs 5(c)(i) and (ii). If the actual
                number of shares of Common Stock received in the exchange is
                greater than the product described in the foregoing sentence,
                the number of shares of Common Stock available under this
                Paragraph 5 shall be further decreased by the difference. If the
                actual number of shares of Common Stock received in the exchange
                is less than such product, the number of shares of Common Stock
                available under this Paragraph 5 shall be increased by the
                difference.

                                      -3-
<PAGE>

          (iv)  In the event that any options under a Subsidiary Option Plan
                expire or terminate for any reason without being exercised, the
                number of shares issuable under the Plan shall be adjusted as if
                such unexercised options had never been granted.

          (v)   At such time as shares of Common Stock are actively traded on an
                established securities market, (A) no adjustments shall be
                required pursuant to subparagraphs 5(c)(i) and (ii) with respect
                to any subsequent option or other grant pursuant to any
                Subsidiary Option Plan, (B) no adjustment shall be required
                pursuant to subparagraph 5(c)(iii) with respect to any
                subsequent exchange of shares of the applicable Subsidiary for
                shares of Common Stock, and (C) Exchange Shares subsequently
                issued by the Company, but not previously the subject of any
                adjustment under this Paragraph 5(c), shall reduce the number of
                shares of Common Stock available pursuant to Paragraph 5(b) on
                an one-for-one basis.

          4.    A new Paragraph 9A shall be added to the Plan and shall provide
in its entirety as follows:

                9A  Exchange Shares.  The Committee shall be cause the Company
                    ---------------
          to issue (pursuant to this Plan) such number of Exchange Shares
          necessary to satisfy the Company's obligations under individual stock
          option grant or exchange agreements entered into by and among the
          Company, a Subsidiary and an employee of a Subsidiary (pursuant to a
          Subsidiary Option Plan, as defined in Paragraph 5(c)), pursuant to
          which grant or exchange agreement an optionee acquires shares of
          common stock of a Subsidiary and seeks to dispose of the acquired
          shares through an exchange of the acquired shares with the Company for
          shares of Common Stock.


          Executed this 28th day of February 2000.


                                    PAETEC CORP.


                                    By: /s/ Arunas A. Chesonis
                                       ---------------------------

                                      -4-