Exhibit
10.16








SECOND
AMENDMENT TO EMPLOYMENT AGREEMENT





This
Second Amendment to Employment Agreement (this “Second Amendment”) is entered
into as of February 5, 2008 (the “Effective Date”) by and between Grande
Communications Networks, Inc., a Delaware corporation (the “Company”), and Roy
H. Chestnutt (the “Executive”).





WHEREAS, the Company and the
Executive entered into an Employment Agreement (the “Original Agreement”) dated
December 31, 2005; and





WHEREAS, the Company and the
Executive amended the Original Agreement to comply with Section 409A of the
Internal Revenue Code of 1986, as amended (“Code”), in the Amendment to
Employment Agreement as of June 28, 2006 (the “First Amendment”; and the
Original Agreement as amended by the First Amendment is the “Agreement”);
and





WHEREAS, the Company and the
Executive wish to further amend the Agreement to further comply with Section
409A of the Code in light of the final Treasury Regulations promulgated under
such section of the Code, and to clarify the health care coverage
provisions.





NOW, THEREFORE, the parties agree
as follows:





1.
            The
      Agreement is amended by deleting the fifth sentence in Section 4, in its
      entirety, and replacing it with the
following:





“Annual
bonuses shall be payable to the Executive by the 15th day of
the third month after the end of the applicable Bonus Period.”





2.
            The
      Agreement is amended by deleting the seventh sentence in Section 4, in its
      entirety, and replacing it with the
following:





“Any such
additional discretionary bonus shall be payable to the Executive by the 15th day of
the third month after the end of the applicable Bonus Period.”





3.
            The
      Agreement is amended by deleting Section 10(b)(3) in its entirety and
      replacing it with the following:





“(3)           The
Contract Period may be terminated by the Executive in the event that the Board
of Directors of the Company (the “Board”): (a) materially diminishes Executive’s
duties and responsibilities under this Agreement; (b) materially relocates the
office that the Executive is to work outside of the Austin/San Antonio Corridor,
Texas area, (c) removes the Executive without Cause from the Board, (d) strips
the Executive without Cause of his title as Chief Executive Officer, provided
such action either causes the Executive to report to someone other than the
Board or materially reduces the budget over which the Executive has control, or
(e) materially reduces Executive’s Base Salary without Cause (each of the
foregoing events described in the foregoing clauses (a) – (e) of this paragraph
is a “Good Reason
Termination”).  Notwithstanding the above, the Executive’s
termination of the Contract Period will only be considered a Good Reason
Termination if: (i) the Executive provides the Board with written notice of the
occurrence of the event giving rise to a Good Reason Termination within ninety
(90) days of such occurrence, (ii) the Board fails to remedy the condition
caused by such event within thirty (30) days of receiving notice of the
occurrence of such event from Executive, and (iii) following the failure of the
Board to remedy the such condition within thirty (30) days, the Executive
provides sixty (60) days notice of his intent to terminate the Contract Period,
with such notice being provided no later than one (1) year following the
occurrence of the event giving rise to the Good Reason
Termination.  The Company reserves the right to relieve the Executive
of his duties any time during the 60-day period following the date on which it
receives notice from Executive of his intent to terminate the Contract Period as
described in clause (iii) above without affecting his right to compensation,
Severance Pay, Benefit Continuation and other benefits during this notice
period.  A Good Reason Termination by Executive pursuant to this
Section 10(b)(3) shall not be considered a voluntary termination of employment
with the Company by Executive. ”





4.
            The
      Agreement is amended by deleting the fourth sentence of Section 10(b)(5)
      in its entirety and replacing it with the
  following:





“The
Company will continue to pay the costs of insurance and health coverage at the
same level as the Company pays the costs of the Executive’s then current
insurance and health care coverage provided for in Section 5 until the
earlier to occur of (i) the termination of the Severance Period or (ii) the date
that Executive begins receiving equivalent benefits from his next full time
employer, and upon the occurrence of such earlier event, the Company shall
discontinue any payment towards Executive’s insurance and  health care
coverage, and the costs associated with available continuing coverage under the
Company’s insurance and health plans, if any, will be the sole responsibility of
the Executive (“Benefit
Continuation”).”





5.
            The
      Agreement is amended by adding this new Section
  10(b)(6):





“(6)           To
the extent that the Severance Pay provided under Section 10(b)(5) exceeds two
times the lesser of (a) the sum of the Executive’s annual compensation (as
defined in Treas. Reg. §1.415-2(d)) for services provided to the Company as an
employee and the Executive’s net earnings from self-employment (as defined in
Code §1402(a)) for services provided to the Company as an independent
contractor, if any, each for the calendar year preceding the calendar year in
which the termination occurs or (b) the maximum amount of compensation that can
be taken into account for qualified plan purposes pursuant to Internal Revenue
Code §401(a)(17) for such year, such excess amount of Severance Pay will not
begin sooner than the date that is six (6) months following the date of
termination.  In the event of a delay in payment provided under this
Section 10(b)(6), the Company, at the Board’s discretion, may (i) on the first
day of the seventh month following such termination, pay Executive in a lump sum
all amounts that would have been paid under Section 10(b)(5) if such six-month
delay had not occurred or (ii) delay all payments under Section 10(b)(5) for a
period of six months.”


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IN WITNESS WHEREOF, the
Company and the Executive have executed this Second Amendment to be effective as
of the Effective Date.





COMPANY:GRANDE
      COMMUNICATIONS NETWORKS, INC.By:
            /s/ Michael L. WilfleyIts:
            Chief Financial OfficerEXECUTIVE:/s/Roy H. ChestnuttROY
      H. CHESTNUTT







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