Document:

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                                                                   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.
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              (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-
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              (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-
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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-
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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-<PAGE>

                                                                   Exhibit 10.22

                          PAETEC COMMUNICATIONS, INC.
                             AGENT INCENTIVE PLAN

Introduction

          Employee participation in ownership through stock options is a key
element of PaeTec's business plan. Our independent sales agents are also an
important part of PaeTec's marketing strategy, and we want to offer means by
which agents who help us succeed can share in the success along with our
employees and shareholders. Accordingly, we have created this Agent Incentive
Plan (the "Plan").

          Under the Plan, agents who achieve specified sales goals will be
granted Warrants entitling them to purchase shares of the Class A Common Stock
of our parent company, PaeTec Corp. ("Warrant Shares")./1/ The Exercise Price
will be set at the time the Warrants are granted by the Company based on the
then current fair market value of PaeTec's stock. Agents who receive Warrants
will then have the benefit of subsequent increases in the price of the shares as
if they were investors holding stock. In this way, agents who consistently
generate significant monthly revenues are rewarded with the option to in effect
"buy-in" to the Company and to share in future increases in value of the
Company.

          PaeTec is currently a private company and there is no public trading
market for its stock. Recognizing that agents will not therefore realize cash
"value" from the Plan until PaeTec becomes a public company, the Warrants will
not be exercisable until after PaeTec successfully completes an initial public
offering (an "IPO") of its common stock. Further, the Warrants will only be
exercisable in compliance with federal and state securities laws.

          The ability to exercise the Warrants (also referred to as "vesting")
will also be dependent on maintenance of sales volumes. The right to purchase
the Warrant Shares will vest over a period four years, depending on retention of
the sales revenues generated by the agent.

          The Company has set aside a total of 500,000 shares to cover Warrants
under the Plan. Once the Warrants have been granted with respect to all 500,000
shares, the Plan will automatically end unless the Company decides, in its sole
discretion, to continue the Plan by increasing the number of shares available
under the Plan.

______________________
     /1/ For purposes of the Plan, PaeTec Communications, Inc. and PaeTec Corp.
are referred to collectively as "PaeTec" or the "Company." A warrant is similar
to an option; it is a legal right to purchase stock at a specified price which
is referred to as the "Exercise Price."
<PAGE>

Qualification and Exercise Price

          To qualify, agents must first achieve specified monthly revenue
targets. The Company will issue Warrants to agents when their monthly sales
reach one of the following levels:

<TABLE>
<CAPTION>
          Monthly Revenue Level                                       Warrants
          ---------------------                                       --------
<S>                                                                   <C>
At least $50,000 but less than $100,000 in monthly revenue             2,500 Warrant Shares
At least $100,000 but less than $250,000 in monthly revenue            5,000 Warrant Shares
At least $250,000 but less than $500,000 in monthly revenue           12,000 Warrant Shares
At least $500,000 in monthly revenue                                  20,000 Warrant Shares
</TABLE>

          A Warrant Certificate for the number of Warrants earned by an agent
based on the revenue level achieved will be granted to the agent automatically
within 60 days after the end of the month in which the agent hits its sales
target.

          The price for purchasing the Warrant Shares (in other words, the
Exercise Price) will be the fair market value of PaeTec's Class A Common Stock
at the time the Warrants are granted. Since PaeTec is currently not a public
company and there is no trading market for its shares, the Exercise Price will
be set by the Board of Directors of the Company and its determination will be
final. Generally, the Board will base its determination on the most recent
selling price for shares in a private offering by PaeTec, but the Board reserves
the right to consider other factors affecting value as well. For Warrants issued
after PaeTec goes public, the Exercise Price will generally equal the closing
price per share of PaeTec's Class A Common Stock on the last trading date of the
month the agent qualifies for the Warrants.

          A form of the Warrant Certificate is attached as Exhibit A.

Payment for the Warrant Shares

          Agents will pay nothing at the time the Warrants are issued to them.
The Warrants will be issued to successful agents who meet their monthly revenue
targets as a reward for their sales achievements for PaeTec, and no payment is
required until the agent decides to exercise its rights under the Warrant. At
that point the agent will have to pay the Exercise Price in cash for the Warrant
Shares it elects to buy. Alternatively, a "cashless exercise" will be permitted.

          The "cashless exercise" alternative in essence enables the agent to
use the appreciation, if any, in the value of PaeTec stock over the Exercise
Price, rather than its own funds, to pay for the Warrant Shares. For example,
assume the agent is eligible (i.e., PaeTec has gone public and the agent's
Warrants have "vested") to purchase 1,000 Warrant Shares at an Exercise Price of
$5.00 per share. Further assume that the market price of the shares at the time
of exercise has increased to $10.00 per share, reflecting appreciation of $5.00
per share. The agent could either purchase 1,000 shares by paying $5,000 in
cash, or it could acquire 500 shares through a "cashless exercise" by
authorizing the Company to cancel 500 Warrants in addition to the 500 Warrants
being exercised. In effect, the appreciation in the 500 Warrants to be cancelled

                                      -2-
<PAGE>

is used to purchase 500 Warrant Shares. By using the cashless exercise
alternative, the agent foregoes the opportunity to purchase a larger number of
shares for the privilege of not having to invest its own funds./2/

Securities Law Matters

          In order that agents holding Warrants will have sufficient information
about the Company to make an informed decision about investing in Warrant
Shares, and will be able to sell in a public market any Warrant Shares they
elect to purchase through the exercise of the Warrants, the Warrants will not be
exercisable until after PaeTec has become a public company and "registered" the
Warrant Shares on a Registration Statement filed with the Securities and
Exchange Commission. While PaeTec anticipates that it will go public in the
future, there can be no assurance that it will do so within any specified period
of time or at all. If PaeTec fails to go public, the Warrants would never become
exercisable.

Vesting

          Assuming PaeTec has become a public company, an agent can purchase up
to 20% of the Warrant Shares at any time after the grant of the Warrants. In
other words, 20% of the Warrants automatically become exercisable as soon as the
Warrant is granted to the agent, regardless of the agent's subsequent monthly
revenue level. On the other hand, an agent's ability to purchase the rest of the
shares under the Warrant (in other words, the remaining 80%) will depend on the
maintenance of sales revenues over the next four years. After the IPO, an agent
may exercise its Warrants with respect to all or any portion of the vested
Warrant Shares.

______________________
     /2/ See the attached Warrant Certificate for the mechanism for a cashless
exercise.

                                      -3-
<PAGE>

          Each year after Warrants are issued, the Company will determine
whether the agent is still meeting the monthly sales target that resulted in the
grant of the Warrant. In order to do this, the Company will review the agent's
revenue level as of the end of the month for which the grant was made
("Anniversary Month") in each of the succeeding four years. For example, if a
Warrant was granted with respect to June 2000, the relevant Anniversary Months
for the purpose of vesting are June 2001, June 2002, June 2003 and June 2004. If
the agent's average monthly sales during June of the applicable year and the
previous eleven months remained at or above the applicable target level, an
additional 20% of the shares covered by the Warrant will "vest" and become
exercisable as of June 30th of that year. Thus, for example, an agent who is
granted Warrants for 2,500 shares in June 2000 as a result of generating $50,000
in monthly revenue could purchase 500 shares (20% of 2,500 shares) at any time
after the grant/3/, and 500 additional shares after the end of each June
thereafter until all 2,500 shares are vested, provided that it maintains the
required average monthly revenue level of $50,000. The "penalty" for falling
below the average monthly revenue target is simply the loss of the vested
Warrant Shares for that year (i.e., loss of 20% vesting for that year). The
                              ----
agents, however, are eligible to make up for any shortfall in the monthly
revenue target in subsequent years through and including the fifth Anniversary
Month following issuance of the Warrant Certificate. Example #1 shows how an
agent would vest upon issuance of the Warrants, and over a four year period by
maintaining its revenue level:

Example #1     $50,000 monthly revenue level for June C 2,500 Warrants
               -------------------------------------------------------

               Vesting on Issuance        (2,500 x 20%)   =   500 Warrants
               June 30 (1st Anniversary)  (2,500 x 20%)   =   500 Warrants
               June 30 (2nd Anniversary)  (2,500 x 20%)   =   500 Warrants
               June 30 (3rd Anniversary)  (2,500 x 20%)   =   500 Warrants
               June 30 (4th Anniversary)  (2,500 x 20%)   =   500 Warrants
               -----------------------------------------------------------
               Total Vested Warrants After 4 Years        = 2,500
                                                            =====

          An agent who increases sales to the next revenue level will not only
vest an additional 20% of the shares covered by his original Warrant as
described above, but also be entitled to new Warrants to reflect the newly
achieved sales level. For example, assume that an agent achieves the $50,000 per
month sales plateau in June of year one and receives Warrants for 2,500 shares.
In June of the second year the agent increases revenues to the $100,000 per
month level. The agent would then be vested for a total of 40% of the shares
covered by its first Warrant (in other words, 1,000 shares), and would also be
granted new Warrants for an additional 5,000 shares. The agent would
automatically vest for 20% of the new Warrant (or 1,000 shares), and thus would
be eligible to purchase a combined 2,000 shares under both Warrants. Of course,
if an agent initially generates the applicable revenue level in any subsequent
month (say, August in our example), it will also receive a new Warrant for that
month. Simply put, the more revenue an agent generates for PaeTec, the more
shares it can buy under the Plan.

______________________
     /3/ Subject to the pre-IPO restrictions previously described.

                                      -4-
<PAGE>

          On the other hand, an agent who fails to maintain average monthly
sales revenues will forfeit the right to buy shares that would otherwise vest
under its Warrant. Assume that an agent hits the $50,000 monthly revenue target
for June 2000 and receives a Warrant for 2,500 shares. The agent immediately
vests for 500 shares, but the agent's average monthly revenue during the
succeeding twelve months falls below the $50,000 monthly revenue threshold to
$40,000. In that case, the agent would forfeit the right to purchase the 500
shares that would otherwise have vested as of June 30, 2001.

          If an agent fails to meet its monthly revenue target and therefore a
20% installment fails to vest, the Plan offers the agent an opportunity to "earn
back" the forfeited Warrant Shares in subsequent years up to and including the
last day of the fifth Anniversary Month following issuance of the Warrant
Certificate by bringing monthly sales levels back above the threshold target by
a sufficient amount to exceed the prior year's shortfall. Thus, returning to the
example in the preceding paragraph, if it is subsequently determined that the
agent's average monthly sales during the twelve months ending June 30, 2002
exceed the $60,000 threshold (in other words, $50,000 for June 2002 and $10,000
to make up for the June 2001 shortfall), the 500 shares previously forfeited at
the end of year one would be restored, and an additional 500 shares would vest
for the current year as well. See example #2 below.

Example #2:

Monthly revenue target level: $100,000

     June, Year 1 (revenues for the month = $100,000):
     -------------------------------------------------
          Warrants for 5,000 shares granted, 20% vest immediately (1,000 shares
          vested)

     June, Year 2 (average monthly revenues during preceding 12 months =
     -------------------------------------------------------------------
     $90,000):
     ---------
          Since the average monthly revenues were less than $100,000, 20% of the
          Warrants (1000 shares) are forfeited.

     June 30, Year 3 (average monthly revenues during preceding 12 months =
     ----------------------------------------------------------------------
     $85,000):
     ---------
          Again, the revenues are less than $100,000 and, as a result, the 20%
          of the Warrants which would otherwise have vested are forfeited (Agent
          remains vested for 1,000 shares from original issuance).

     June 30, Year 4 (average monthly revenues during preceding 12 months =
     ----------------------------------------------------------------------
     $130,000):
     ----------
          Since the average monthly revenues during the preceding 12 months
          exceeded the $100,000 target level by $30,000 (which would make up for
          the Year 2 shortfall of $10,000 and the Year 3 shortfall of $15,000),
          the agent will earn back the shares forfeited in Year 2 and Year 3.
          Accordingly, 20% of 5,000 Warrants will vest for the current Year 4,
          an additional 20% will vest for Year 3, and additional 20% vest for
          Year 2 for a total of 4,000 Warrants vested, including the Warrants
          vested in Year 1.  However, there will be no credit given with respect
          to the $5,000 in extra

                                      -5-
<PAGE>

          revenues (difference between the excess $30,000 and the $25,000 total
          shortfall amount) for any future periods.

     June 30, Year 5 (average monthly revenues = $80,000):
     -----------------------------------------------------

          Since the average monthly revenues for twelve months ended June 30
          once again fell below the $100,000 threshold, the last 20% will not
          vest.  However, the agent will have one last chance to earn back these
          forfeited shares if it has or exceeds $120,000 in average monthly
          revenues during Year 6, measured as of the last day of the Anniversary
          Month of that year.

          Regardless of whether any Warrant has "vested" as herein described,
unless and until PaeTec becomes a public company, the agent holding the Warrants
may not purchase Warrant Shares under any circumstances. Further, an agent can
"earn back" Warrants that did not vest because average monthly sales fell below
target only until the last day of the fifth Anniversary Month following the
issuance of the Warrant Certificate.

Expiration Date

     All unexercised Warrants will expire on the last day of the tenth
Anniversary Month occurring after issuance of the Warrant Certificate.

Sub-Agents

     PaeTec Communications recognizes that many agents work with sub-agents and
that they may wish to assign some of their Warrants to sub-agents who help them
achieve and maintain their PaeTec revenue goals. Accordingly, while Warrants
generally are not transferable, limited transfers to sub-agents will be
permitted on the following conditions: (i) the proposed transferee must be a
genuine sub-agent and proof of its sales of PaeTec products and services will be
required, (ii) only vested Warrants may be assigned, (iii) the minimum
assignment must be for at least 50 Warrant Shares and must be in increments of
50 Warrant Shares, and (iv) the sub-agent transferee will be subject to the same
restrictions as the agent, e.g., Warrants are not exercisable pre-IPO and
                           ----
Warrant Shares may only be transferred in compliance with the securities laws.

Transferability - Warrants and Warrant Shares

     Except for transfers to sub-agents as previously discussed, Warrants may
not be assigned, transferred, pledged or otherwise disposed of and any attempted
transfer will be void. It is PaeTec's intention to "register" the Warrant Shares
issuable upon exercise of the Warrants once it becomes a public company so that
the Warrant Shares will generally be freely tradable in the public market.
However, it is possible that, for some reason that we cannot presently foresee,
this registration would be precluded or delayed. In that event, the Warrant
Shares could not be sold unless an exemption from the application of the
securities laws is available. Agents are urged to contact the Company prior to
purchasing Warrant Shares pursuant to the exercise of a Warrant to confirm that
the shares will in fact be freely tradable.

                                      -6-
<PAGE>

Plan Summary

 .    500,000 shares of Class A Common Stock of PaeTec Corp. have been set aside
     for the Plan.
 .    Warrants are not exercisable in any event until after PaeTec has gone
     public.
 .    Warrants are issued and the Exercise Price is set when a specified monthly
     revenue level is reached. Agent has a potential to receive Warrants with
     respect to each calendar month.
 .    Warrants vest over a 4 year period (20% immediately upon grant and then 20%
     as of the end of the Anniversary Month for four years).
 .    For continued vesting, Agent must maintain the applicable revenue level on
     average during each succeeding 12 months.
 .    Penalty for missing the target revenue level is loss of vesting for that
     year (20%).
 .    To make up for any lost vesting, the agent must exceed his target revenue
     level plus the shortfall amount on average during any succeeding twelve
     month period, measured as of the end of any succeeding Anniversary Month,
     up to and including the fifth Anniversary Month after issuance of the
     Warrant Certificate.
 .    Unexercised Warrants will expire after ten years.

                                      -7-
<PAGE>

                       Exhibit A to Agent Incentive Plan

NEITHER THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE NOR ANY SHARES
ACQUIRED UPON THE EXERCISE OF THE WARRANTS HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, NOR MAY
WARRANTS OR SHARES BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS, OR PURSUANT TO AN EXEMPTION FROM THESE REGISTRATION
REQUIREMENTS. THE WARRANTS AND SHARES MAY BE TRANSFERRED ONLY IN COMPLIANCE WITH
THE CONDITIONS SPECIFIED IN THIS WARRANT CERTIFICATE.

                                   WARRANTS

            To Purchase ________ Shares of Class A Common Stock of

                                 PAETEC CORP.

                            Dated: ________________

     THIS WARRANT CERTIFICATE CERTIFIES THAT ___________________ (the "Holder")
is entitled, at any time after the Warrants represented by this Warrant
Certificate become exercisable as provided in Section 2.1, but prior to the
Expiration Date (as hereafter defined), to purchase from PaeTec Corp., a
Delaware corporation (the "Company"), _________ shares of the Company's Class A
Common Stock at a purchase price of $_______ per share (the "Exercise Price"),
all on the terms and conditions set forth in this Warrant Certificate.

1.   DEFINITIONS

     As used in this Warrant Certificate, the following terms have the meanings
set forth below:

     "Agent" shall mean the independent sales agent of the Company named on
Schedule A hereto.

     "Anniversary Month" shall mean the calendar month indicated under the
caption "Anniversary Month" on Schedule A hereto.

     "Board of Directors" shall mean the Board of Directors of the Company.

     "Business Day" shall mean any day that is not a Saturday or Sunday or a day
on which banks are required or permitted to be closed in the State of New York.
<PAGE>

     "Class A Common Stock" shall mean the Class A Common Stock, $.01 par value
per share, of the Company, and any other securities of the Company into which
such Class A Common Stock is recapitalized or reclassified.

     "Commission" shall mean the Securities and Exchange Commission or any
successor federal agency then administering the Securities Act and successor
federal securities laws.

     "Exercise Price" shall mean the price indicated above at which a share of
Class A Common Stock may be purchased pursuant to this Warrant. The Exercise
Price may from time to time be adjusted in accordance with Section 4 hereof.

     "Expiration Date" shall mean the tenth (10th) anniversary of the date of
this Warrant Certificate.

     "Fair Market Value" shall mean the fair value of a share of Class A Common
Stock as determined in good faith by the Board of Directors, whose determination
shall be conclusive; provided, however, that if the Class A Common Stock is then
                     --------  -------
listed or traded on a national securities exchange or automated quotation system
or is publicly held, then such term shall mean (a) if the Class A Common Stock
is listed or traded on any national securities exchange or listed for quotation
on the Nasdaq National Market or SmallCap Market, the last or closing sale
price, regular way, of the Class A Common Stock on the applicable date, as
reported in the principal consolidated transaction reporting system (in case of
a national securities exchange) or in the Wall Street Journal (in case of the
Nasdaq National Market or SmallCap Market); and (b) in all other cases, the
average of the high bid and low asked prices in the over-the-counter market,
such as the Nasdaq OTC Bulletin Board, as reported in The Wall Street Journal
or, if Class A Common Stock is not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a professional market maker
making a market in the Class A Common Stock selected by the Board of Directors.

     "Holder" shall mean the Person in whose name this Warrant is registered on
the books of the Company maintained for such purpose.

     "Initial Public Offering" shall mean the closing of an initial public
offering underwritten by an investment banking firm on a firm commitment basis
pursuant to an effective registration statement under the Securities Act
covering the offer and sale by the Company of its common stock.

     "Person" shall mean any individual, firm, corporation, partnership, limited
liability company, joint venture, trust or unincorporated organization,
government (or agency or political subdivision thereof) or any other entity.

     "Revenues" shall mean gross revenues derived by the Company from sales of
its products and services to customers generated by Agent.

     "Securities Act" shall mean the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.

                                       2
<PAGE>

     "Shortfall Amount" shall have the meaning given to it in Section 2.1
hereof.

     "Target Revenue Level" shall mean the monthly target revenue level
indicated under the caption "Target Revenue Level" on Schedule A hereto.

     "Vesting Installment" shall have the meaning given to it in Section 2.1
hereof.

     "Warrants" shall mean the rights represented by this Warrant Certificate to
purchase Warrant Stock.

     "Warrant Stock" shall mean the shares of Class A Common Stock that may be
purchased by the holders of the Warrants upon the exercise thereof.

2.   EXERCISE OF WARRANTS

     2.1. Time of Exercise. The Warrants may be exercised if and only if the
          ----------------
condition set forth in subsection (a) of this Section 2.1 is satisfied, but then
only with respect to shares of Warrant Stock vested in accordance with
subsection (b) of this Section 2.1:

     (a)  the Initial Public Offering shall have been consummated at least one
year prior to the date of exercise and a registration statement on an applicable
form under the Securities Act, covering the issuance by the Company of all the
shares of Warrant Stock, shall have been declared effective by the Commission.

     (b)  the Warrants are exercisable only with respect to shares of Warrant
Stock which shall have vested in accordance with the following:

          (1)  twenty percent (20%) of the Warrant Stock shall vest immediately
               upon the grant of the Warrants; and

          (2)  the remaining eighty percent (80%) of the Warrant Stock shall
               vest in four (4) equal annual installments (each, a "Vesting
               Installment") of twenty percent (20%) on the last day of the
               Anniversary Month in each of the four years immediately
               succeeding the year in which the Warrants are granted (the "Grant
               Year"), if and only if the Agent's average monthly Revenues
               during the twelve month period ending on the last day of the
               Anniversary Month of that year shall equal or exceed the Target
               Revenue Level; provided, however, that in the event that any
                              --------  -------
               Vesting Installment shall fail to vest as a result of the Agent's
               average monthly Revenues not meeting the Target Revenue Level
               (the difference between the Target Revenue Level and the Agent's
               average monthly Revenues is hereinafter referred to as the
               "Shortfall Amount"), then such Vesting Installment may vest in
               any subsequent year on or prior to the fifth anniversary of the
               last day of the Anniversary Month of the Grant Year if the
               Agent's average monthly Revenues during the twelve month period
               ending on the last day of the Anniversary Month of such
               subsequent year equal or exceed the sum of

                                       3
<PAGE>

               the Target Revenue Level and the Shortfall Amount. If the average
               monthly Revenues for any such twelve month period exceed the
               Target Revenue Level, however, no credit will be given for any
               future periods with respect to such excess Revenues.

     2.2. Manner of Exercise. At any time after the Warrants become exercisable
          ------------------
as provided in Section 2.1 hereof until 5:00 p.m., New York time, on the
Expiration Date, Holder may exercise the Warrants on any Business Day for all or
any part of the number of shares of Warrant Stock purchasable hereunder,
provided that the Warrants may be exercisable in a maximum of two installments.

     In order to exercise the Warrants, in whole or in part, Holder shall
deliver to the Company at its principal office at 290 Woodcliff Drive, Fairport,
New York 14450 (i) a written notice of Holder's election to exercise the
Warrants, substantially in the form appearing at the end of this Warrant as
Exhibit A ("Exercise Notice"), (ii) unless Holder indicates on the Exercise
Notice of its intention to effect a cashless exercise (in which case no cash
payment of the Exercise Price shall be made by Holder), payment of the Exercise
Price for each share of Warrant Stock as to which the Warrant is exercised by a
certified or bank check, payable to the order of the Company, and (iii) this
Warrant Certificate. Upon receipt of all of these items the Company shall
deliver or cause to be delivered to Holder a certificate or certificates
representing the aggregate number of full shares of Warrant Stock issuable upon
such exercise, together with cash in lieu of any fraction of a share, as
hereinafter provided; provided, however, that in the event that Holder elects to
                      --------  -------
effect a cashless exercise, the Holder shall be entitled to receive upon
exercise a number of shares of Warrant Stock, computed as of the date on which
the Company received the Exercise Notice together with this Warrant Certificate,
determined by the following formula:

          X = Y (A-B)
              -------
                 A

          Where X   =  the number of shares of Warrant Stock to be issued to
                       Holder;

                Y   =  the aggregate number of shares of Warrant Stock with
                       respect to which Holder elected to effect a cashless
                       exercise;

                A   =  the Fair Market Value per share of the Company's Class A
                       Common Stock (on the date of such calculation); and

                B   =  the Exercise Price.

                In lieu of payment of the Exercise Price, the Company shall
                cancel such number of shares of Warrant Stock equal to the
                difference (rounded up to the nearest whole number of shares)
                between Y and X.

     The stock certificate or certificates so delivered shall be registered in
the name of Holder. The Warrants shall be deemed to have been exercised and such
certificate or certificates shall be

                                       4
<PAGE>

deemed to have been issued, and Holder shall be deemed to have become a holder
of record of such shares for all purposes, as of the date the notice, together
with the Exercise Price (if applicable) and this Warrant Certificate, are
received by the Company as described above. If the Warrants shall have been
exercised in part, the Company shall, at the time of delivery of the certificate
or certificates representing Warrant Stock, deliver to Holder a new Warrant
Certificate evidencing the right of Holder to purchase the remaining shares of
Warrant Stock, which new Warrant Certificate shall in all other respects be
identical to this Warrant Certificate or, in the sole discretion of the Company,
appropriate notation may be made on this Warrant Certificate and the same
returned to Holder.

     2.3. Fractional Shares. The Company shall not be required to issue a
          -----------------
fractional share of Class A Common Stock upon exercise of the Warrants. In lieu
of any fraction of a share which Holder would otherwise be entitled to purchase
upon exercise, the Company shall pay cash in an amount equal to the same
fraction of the Fair Market Value per share of Class A Common Stock on the date
of exercise.

3.   RESERVATION AND AUTHORIZATION OF CLASS A COMMON STOCK

     From and after the date hereof, the Company shall at all times reserve and
keep available for issuance upon the exercise of the Warrants such number of its
authorized but unissued shares of Class A Common Stock (or its authorized and
issued shares of Class A Common Stock held in treasury) as will be sufficient to
permit the exercise in full of the Warrants. All shares of Class A Common Stock
which shall be so issuable, when issued upon exercise of the Warrants and
payment therefor in accordance with the terms of the Warrants, shall be duly and
validly issued and fully paid and nonassessable, and not subject to preemptive
rights.

4.   ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF SHARES.

     The Exercise Price and the number of shares of Class A Common Stock covered
by the Warrants are subject to adjustment from time to time as provided in this
Section 4.

          (a)  In case the Company shall at any time after the date of this
Warrant Certificate (i) effect a distribution payable in shares of Class A
Common Stock to all holders of the outstanding Class A Common Stock, (ii)
subdivide the outstanding shares of its Class A Common Stock, (iii) combine the
outstanding Class A Common Stock into a smaller number of shares of Class A
Common Stock or (iv) issue any securities of the Company in a reclassification
or recapitalization of the Class A Common Stock, then the number and kind of
securities issuable upon exercise of the Warrants (commencing on the record date
for such distribution or the effective date of such subdivision, combination,
reclassification or recapitalization) shall be proportionately adjusted so that
the holder of the Warrants exercised after such time shall be entitled to
receive the aggregate number and kind of securities which, if such Warrants had
been exercised in full immediately prior to such date, he would have owned upon
such exercise and been entitled to receive by virtue of such distribution,
subdivision, combination, reclassification

                                       5
<PAGE>

or recapitalization. Such adjustment shall be made successively whenever any
event listed above shall occur.

          (b)  Upon each adjustment of the number of shares of Class A Common
Stock for which the Warrants are exercisable as provided in Section 4(a) hereof,
the per share Exercise Price payable upon exercise of the Warrants shall be
adjusted by multiplying the Exercise Price immediately prior to such adjustment
by a fraction (i) the numerator of which shall be the number of shares of Class
A Common Stock covered by the Warrants prior to such adjustment, and (ii) the
denominator of which shall be the number of shares of Class A Common Stock
covered by the Warrants immediately after such adjustment.

5.   RESTRICTIONS ON TRANSFER

     Except as otherwise provided in Section 8.2 hereof, the Warrants may not be
transferred, hypothecated or assigned without the prior written consent of the
Company, which consent may be given or withheld in the Company's sole
discretion. Holder, by acceptance of this Warrant Certificate, agrees to be
bound by the provisions of this Section 5.

          Each certificate representing shares of Warrant Stock issued upon the
exercise of a Warrant shall be stamped or otherwise imprinted with the following
legend, unless in the opinion of counsel for the Company, such legend is not
required under applicable laws:

          "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
          REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
          SECURITIES LAWS OF ANY STATE. THE SECURITIES HAVE BEEN ACQUIRED FOR
          INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
          EXCEPT IN COMPLIANCE WITH SUCH ACT OR SUCH LAWS."

6.   LOSS, THEFT, DESTRUCTION OR MUTILATION

     Upon receipt by the Company from any Holder of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of this Warrant Certificate and indemnity or security reasonably
satisfactory to the Company and reimbursement to the Company of all reasonable
expenses incidental thereto, and in case of mutilation upon surrender and
cancellation of the mutilated Warrant Certificate, the Company will execute and
deliver in lieu hereof a new Warrant Certificate of like tenor to such Holder;
provided that, in the case of mutilation, no indemnity or security shall be
required if this Warrant Certificate in identifiable form is surrendered to the
Company for cancellation.

                                       6
<PAGE>

7.   LIMITATION OF LIABILITY AND RIGHTS AS STOCKHOLDER

     No provision hereof, in the absence of affirmative action by Holder to
purchase shares of Class A Common Stock, and no enumeration herein of the rights
or privileges of Holder hereof, shall give rise to any liability of such Holder
for the Exercise Price of any Warrant Stock or as a stockholder of the Company,
whether such liability is asserted by the Company or by creditors of the
Company.

     Prior to the exercise of the Warrants and the date of the stock certificate
representing the shares of Warrant Stock issuable upon exercise, the Holder of
this Warrant Certificate, as such, shall not be entitled to any rights of a
stockholder of the Company with respect to, or be deemed for any purpose the
holder of, shares for which the Warrants shall be exercisable, including without
limitation, the right to vote or to receive dividends or other distributions,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.

8.   MISCELLANEOUS

     8.1  Notice. Any notice, demand, request, consent, approval, declaration,
          ------
delivery or other communication hereunder to be made pursuant to the provisions
of this Warrant Certificate shall be sufficiently given or made if in writing
and either delivered in person with receipt acknowledged or sent by registered
or certified mail, return receipt requested, postage prepaid, or by a nationally
recognized overnight courier or by telecopy and confirmed by telecopy answer
back, addressed as follows:

          (a)  If to any Holder, at its last known address appearing on the
books of the Company maintained for such purpose.

          (b)  If to the Company at:

               PaeTec Corp.
               Attn: Vice President - Finance
               290 Woodcliff Drive
               Fairport, New York 14450
               Telecopy Number: (716) 340-2511

               with a copy to:

               PaeTec Corp.
               Attn: General Counsel
               290 Woodcliff Drive
               Fairport, New York 14450
               Telecopy Number: (716) 340-2563

or at such other address as may be substituted by notice given as herein
provided. The giving of any notice required hereunder may be waived in writing
by the party entitled to receive such

                                       7
<PAGE>

notice. Every notice, demand, request, consent, approval, declaration, delivery
or other communication hereunder shall be deemed to have been duly given or
served on the date on which personally delivered, with receipt acknowledged, or
telecopied and confirmed by telecopy answer back, one (1) Business Day after the
same shall have been deposited with a nationally recognized overnight courier or
three (3) Business Days after the same shall have been deposited in the United
States mail.

     8.2  Successors and Permitted Assigns. This Warrant Certificate and the
          --------------------------------
rights evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company and the successors and permitted assigns of Holder.
Neither this Warrant Certificate nor the rights evidenced hereby may be
assigned, transferred, pledged or otherwise disposed of by Holder to any other
Person without the prior written consent of the Company, except where such
assignment (i) is made by Agent to a sub-agent thereof who has performed bona
fide services on behalf of Holder to sell products and services of the Company,
and Agent has submitted documentation or proof satisfactory to the Company
concerning such fact, (ii) relates only to vested shares of Warrant Stock, and
                                                                           ---
(iii) is for at least fifty (50) or more vested shares of Warrant Stock
represented hereby and is in increments of fifty (50) shares.

     8.3  Amendment. This Warrant Certificate or the Warrant represented hereby
          ---------
may be modified or amended, or the provisions hereof or thereof waived, only
with the written consent of the Company and the Holder.

     8.4. Severability.  Wherever possible, each provision of this Warrant
          ------------
Certificate shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Warrant Certificate shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Warrant Certificate.

     8.5. Headings. The headings used in this Warrant Certificate are for the
          --------
convenience of reference only and shall not, for any purpose, be deemed a part
of this Warrant.

     8.6. Governing Law. This Warrant Certificate and the Warrant represented
          -------------
hereby shall be governed by the laws of the State of Delaware, without regard to
the provisions thereof relating to conflict of laws.

                                       8
<PAGE>

     IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to be
duly executed and its corporate seal to be impressed hereon as of the date set
forth below.

                                             PAETEC CORP.

SEAL
                                             By:____________________________
                                             Name:
                                             Title:

ATTEST:

________________________________
Secretary or Assistant Secretary

                                       9
<PAGE>

                                  SCHEDULE A

Name of Agent:_________________________

Number of Shares:_________________

Anniversary Month:________________

Target Revenue Level: $____________

                                       10
<PAGE>

                                                                   Exhibit 10.22
                                                                     (Continued)

                                 AMENDMENT #1

               PAETEC COMMUNICATIONS, INC. AGENT INCENTIVE PLAN

          This sets forth Amendment #1 to the PaeTec Communications, Inc. Agent
Incentive Plan ("Plan"). Effective as of March 20, 2000, the Plan shall be
amended as follows:

          1.  The third paragraph of the "Introduction" section of the Plan
shall be amended and restated to provide in its entirety as follows (with the
amended portion underscored):

          PaeTec is currently a private company and there is no public trading
          market for its stock.  Recognizing that agents will not therefore
          realize cash "value" from the Plan until PaeTec becomes a public
          company, the Warrants will not be exercisable before the first
                                                        ----------------
          anniversary of the date PaeTec successfully completes an initial
          -----------------------
          public offering (an "IPO") of its common stock.  Further, the Warrants
          will only be exercisable in compliance with federal and state
          securities laws.

          2.  The "Securities Law Matters" section of the Plan shall be amended
and restated to provide in its entirety as follows (with the amended portion
underscored):

          In order that agents holding Warrants will have sufficient information
          about the Company to make an informed decision about investing in
          Warrant Shares, and will be able to sell in a public market any
          Warrant Shares they elect to purchase through the exercise of the
          Warrants, the Warrants will not be exercisable before the first
                                                         ----------------
          anniversary of the date PaeTec has become a public company and not
          -----------------------                                        ---
          before PaeTec has "registered" the Warrant Shares on a Registration
          -----------------
          Statement filed with the Securities and Exchange Commission.  While
          PaeTec anticipates that it will go public in the future, there can be
          no assurance that it will do so within any specified period of time or
          at all.  If PaeTec fails to go public, the Warrants would never become
          exercisable.
<PAGE>

          3.  The first paragraph of the "Vesting" section of the Plan shall be
amended and restated to provide in its entirety as follows (with the amended
portion underscored):

          Assuming that the public offering and registration requirements
          ---------------------------------------------------------------
          described in the "Securities Law Matters" section above have been
          -----------------------------------------------------------------
          satisfied, an agent can purchase up to 20% of the Warrant Shares at
          ---------
          any time after the grant of the Warrants.  In other words, 20% of the
          Warrants automatically become exercisable as soon as the Warrant is
          granted to the agent, regardless of the agent's subsequent monthly
          revenue level.  On the other hand, an agent's ability to purchase the
          rest of the shares under the Warrant (in other words, the remaining
          80%) will depend on the maintenance of sales revenues over the next
          four years.  After the public offering and registration requirements
                                 ---------------------------------------------
          described in the "Securities Law Matters" section above have been
          -----------------------------------------------------------------
          satisfied, an agent may exercise its Warrants with respect to all or
          ---------
          any portion of the vested Warrant Shares.

          4.  The last paragraph of the "Vesting" section of the Plan shall be
amended and restated to provide in its entirety as follows (with the amended
portion underscored):

          Regardless of whether any Warrant has "vested" as herein described,
          unless and until the public offering and registration requirements
                           -------------------------------------------------
          described in the "Securities Law Matters" section above have been
          -----------------------------------------------------------------
          satisfied, the agent holding the Warrants may not purchase Warrant
          ---------
          Shares under any circumstances.  Further, an agent can "earn back"
          Warrants that did not vest because average monthly sales fell below
          target only until the last day of the fifth Anniversary Month
          following the issuance of the Warrant Certificate.

          5.  The last sentence of the "Sub-Agents" section of the Plan shall be
amended and restated to provide in its entirety as follows (with the amended
portion underscored):

          Warrants are not exercisable until the public offering and
                                       -----------------------------
          registration requirements described in the "Securities Law Matters"
          -------------------------------------------------------------------
          section above have been satisfied and Warrant Shares may only be
          ---------------------------------
          transferred in compliance with the securities laws.
<PAGE>

          6.  The second bullet in the "Plan Summary" section of the Plan shall
be amended and restated to provide in its entirety as follows (with the amended
portion underscored):

          Warrants are not exercisable in any event until after the public
                                                                ----------
          offering and registration requirements described in the "Securities
          -------------------------------------------------------------------
          Law Matters" section above have been satisfied.
          ----------------------------------------------

     This Amendment #1 has been adopted by the Board of Directors of PaeTec
Communications, Inc., and the Board of Directors of PaeTec Corp., to be
effective as of March 20, 2000.

                                        PAETEC CORP.

                                        By: /s/ Arunas A. Chesonis
                                           -------------------------
                                        Title: President
                                              ----------------------
                                        Date:  March 20, 2000
                                             -----------------------

                                        PAETEC COMMUNICATIONS, INC.

                                        By: /s/ Arunas A. Chesonis
                                           -------------------------
                                        Title: President
                                              ----------------------
                                        Date:  March 20, 2000
                                             -----------------------

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