Document:

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                                                                  EXHIBIT 10.32

                               METROCALL, INC.

                         KEY EMPLOYEE RETENTION PLAN

                                April 1, 2001

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                               METROCALL, INC.

                         KEY EMPLOYEE RETENTION PLAN

                              TABLE OF CONTENTS

SECTION 1

         GENERAL                                                             1
         1.1      HISTORY AND PURPOSE                                        1
         1.2      PLAN ADMINISTRATION                                        1
         1.3      SUBSIDIARIES AND EMPLOYERS                                 1
         1.4      ACTION BY EMPLOYERS                                        1

SECTION 2

         PARTICIPATION                                                       1
         2.1      PARTICIPATION.                                             1
         2.2      CESSATION OF PARTICIPATION                                 2
         2.3      CONFLICT WITH OTHER AGREEMENTS                             2

SECTION 3

         RETENTION EVENT AND CHANGE IN CONTROL                               2
         3.1      RETENTION EVENT                                            2
         3.2      CHANGE IN CONTROL                                          2
         3.3      EXCEPTIONS AND DEFINITIONS                                 3

SECTION 4

         RETENTION BONUS                                                     4
         4.1      ENTITLEMENT TO RETENTION BONUS                             4
         4.2      RETENTION BONUS                                            4
         4.3      PARTICIPANT'S BASE AMOUNT                                  4
         4.4      DEEMED RETENTION EVENT                                     4
         4.5      MULTIPLE BONUSES PROHIBITED                                5

SECTION 5

         CHANGE IN CONTROL SEVERANCE BENEFITS                                5
         5.1      ENTITLEMENT TO SEVERANCE BENEFITS                          5
         5.2      CAUSE                                                      5
         5.3      DISABILITY                                                 5
         5.4      TERMINATION FOR GOOD REASON                                5
         5.5      SEVERANCE BENEFITS                                         6
         5.6      BASE SEVERANCE AMOUNT                                      6

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         5.7      BONUS PAYMENT FOR YEAR OF TERMINATION                      6
         5.8      REDUCTION FOR OTHER PAYMENTS                               7

SECTION 6

         CONFIDENTIALITY AND NON-COMPETITION                                 7
         6.1      CONFIDENTIALITY AND NON-COMPETITION - GENERAL              7
         6.2      CONFIDENTIAL INFORMATION                                   7
         6.3      NONCOMPETITION                                             8

SECTION 7

         ENFORCEMENT                                                         8
         7.1      ARBITRATION OF DISPUTES                                    8
         7.2      REIMBURSEMENT OF COSTS AND EXPENSES                        8

SECTION 8

         AMENDMENT OR TERMINATION                                            9
         8.1      AMENDMENT AND TERMINATION                                  9
         8.2      PARTICIPANT RIGHTS                                         9
         8.3      SUCCESSORS                                                 9

SECTION 9

         MISCELLANEOUS                                                       9
         9.1      ADJUSTMENT FOR TAX EFFECTS                                 9
         9.2      MITIGATION AND SET-OFF                                    10
         9.3      NON-ALIENATION                                            10
         9.4      WITHHOLDING                                               10
         9.5      SOURCE OF PAYMENTS                                        10
         9.6      NOTICES                                                   10
         9.7      GENDER AND NUMBER                                         11
         9.8      NO RIGHT TO EMPLOYMENT OR CONTINUATION OF RELATIONSHIP    11
         9.9      GOVERNING LAW                                             11
         9.10     SEVERABILITY                                              11
         9.11     NO LIMITATION UPON THE RIGHTS OF THE COMPANY              11
         9.12     NO LIABILITY FOR GOOD FAITH DETERMINATIONS                11

                                      ii

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                               METROCALL, INC.
                         KEY EMPLOYEE RETENTION PLAN

                                  SECTION 1
                                   GENERAL

         1.1      HISTORY AND PURPOSE. The Board of Directors (the "Board") of
Metrocall, Inc., a Delaware corporation (the "Company"), believes that the
prospect of a pending or threatened Retention Event or Change of Control (each
as defined below) inevitably creates distractions and personal risks and
uncertainties for a company's key employees. The Board further believes that,
because certain key employees' continued performance of their job functions
and duties is critical to the success of the Company, it is in the best
interests of the Company to minimize such distractions and to encourage its
key employees' full attention and dedication to their duties, both currently
and in the event of any threatened or pending Retention Event or Change of
Control. Accordingly, this Metrocall, Inc. Key Employee Retention Plan (the
"Plan") is established by the Company, effective as of April 1, 2001, to
promote the long-term financial interests of the Company and its stockholders
by providing the key employees of the Company and its subsidiaries with (i) an
incentive to remain employed with the Company so they can continue to actively
perform their job functions and duties with full attention and dedication
while a Retention Event or Change in Control is pending, and (ii) assurances
of fair and equitable treatment as well as severance benefits consistent with
competitive practices in the event of a Change in Control of the Company.

         1.2      PLAN ADMINISTRATION.  The authority to control and manage
the operation and administration of the Plan shall be vested in the Board.

         1.3      SUBSIDIARIES AND EMPLOYERS. The term "Subsidiary" means any
corporation of which the Company directly or indirectly owns at least 50% of
the combined voting power of all classes of stock entitled to vote. The
Company and each Subsidiary which, with the consent of the Company, adopts the
Plan, are referred to below, collectively, as the "Employers" and individually
as an "Employer."

         1.4      ACTION BY EMPLOYERS. Any action required or permitted to be
taken by any Employer under the Plan shall be by resolution of its Board of
Directors or by writing of a duly authorized officer of the Employer.

                                  SECTION 2
                                PARTICIPATION

         2.1      PARTICIPATION.  The following individuals shall be
Participants in the Plan:

         (1)      All full time regular employees of the Employers (as that
                  classification is used in the normal business practices of
                  the Company), who have been designated as Participants and
                  have had a Retention Percentage and Severance Percentage
                  established by the Board of Directors of an Employer, and

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         (2)      who are employed on the date of the applicable Retention
                  Event or Change in Control.

         The participation of each Participant shall be evidenced by a
         Participation Agreement in the form attached hereto as Exhibit A.
         Notwithstanding the foregoing, the President and Chief Executive
         Officer, the Chief Financial Officer and the Chief Operating Officer
         shall not be Participants in the Plan.

         2.2      CESSATION OF PARTICIPATION. All employees of an Employer
other than the Company shall cease to be Participants in, or have any rights
under the Plan as of the date, if any, on which the Employer ceases to be a
Subsidiary other than by merger or liquidation into the Company or another
Subsidiary prior to a Retention Event or Change in Control.

         2.3      CONFLICT WITH OTHER AGREEMENTS. To the extent that the Plan
conflicts with any provision of a Participant's employment agreement (if any)
regarding severance compensation and benefits related to a change of control
of the Company or a Retention Event (as defined herein), the Plan shall
control.

                                  SECTION 3
                    RETENTION EVENT AND CHANGE IN CONTROL

         3.1      RETENTION EVENT.  For purposes of the Plan, the term
"Retention Event" means the first to occur of the following:

         (1)      If a voluntary or involuntary petition in bankruptcy is
                  filed by or against the Company, then the date that is 12
                  months after the date of filing of such petition; or

         (2)      the date a Change in Control occurs; or

         (3)      there is consummated an exchange or series of exchanges of
                  at least $250 million in accreted value of the Company's
                  notes for the Company's equity securities.

         3.2      CHANGE IN CONTROL.  For purposes of the Plan, the term
"Change in Control" means the first to occur of the following:

         (1)      any Person or group of Persons acting in concert, in a
                  transaction or a series of transactions, is or becomes the
                  Beneficial Owner, directly or indirectly, of securities of
                  the Company representing more than 50% of the combined
                  voting power of the Company's then outstanding securities
                  that have the right to vote for the election of directors
                  generally (not including in such securities beneficially
                  owned by such Person any securities acquired directly from
                  or received through an exchange offer with the Company),
                  other than any Person who becomes such a Beneficial Owner in
                  connection with a transaction described in clause (i) of
                  Section 3.2(3); or

                                      2

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         (2)      the following individuals cease for any reason to constitute
                  66 2/3% of the directors of the Company then serving:
                  individuals who on the effective date hereof constitute the
                  Board of Directors, and any new director whose appointment
                  or election by the Board of Directors or nomination for
                  election by the Company's stockholders was approved or
                  recommended by at least two-thirds (2/3) of the directors
                  then still in office who either were directors on the date
                  hereof or whose appointment, election or nomination for
                  election was previously so approved or recommended (other
                  than a new director whose initial assumption of office is in
                  connection with an actual or threatened election contest,
                  including but not limited to a consent solicitation,
                  relating to the election of directors of the Company); or

         (3)      there is consummated a merger, consolidation or other
                  business combination (including an exchange of securities
                  with the security holders of a corporation that is a
                  constituent in such business combination) of the Company or
                  any direct or indirect subsidiary of the Company with any
                  other corporation, other than (i) a merger, consolidation or
                  business combination which would result in the voting
                  securities of the Company outstanding immediately prior to
                  such merger, consolidation or business combination
                  continuing to represent at least a majority of the combined
                  voting power of the securities having the right to vote for
                  the election of directors generally of the Company or the
                  surviving entity or any parent thereof outstanding
                  immediately after such merger, consolidation or business
                  combination (either by remaining outstanding or by being
                  converted into or exchanged for voting securities of the
                  surviving entity or parent thereof);

         (4)      there is consummated an agreement for the sale, lease or
                  other disposition by the Company of all or substantially all
                  of the Company's assets, other than a sale, lease or other
                  disposition by the Company of all or substantially all of
                  the Company's assets to an entity, at least a majority of
                  the combined voting power of the outstanding securities of
                  which are owned by stockholders of the Company in
                  substantially the same proportions as their ownership of the
                  Company immediately prior to such sale; or

         (5)      there has been an entry by a court of competent jurisdiction
                  of an order confirming a plan of reorganization of the
                  Company under Chapter 11 of the Bankruptcy Code.

         3.3      EXCEPTIONS AND DEFINITIONS. Notwithstanding the foregoing,
neither a "Retention Event" nor a "Change in Control" shall be deemed to have
occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
Common Stock of the Company immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership
in an entity which owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions.

                                      3

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         For purposes of this Section 3, (a) "Person" shall mean any person or
entity other than (1) any employee plan established by the Company, (2) the
Company or any of its affiliates (as defined in Rule l2b-2 promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")), (3) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (4) a corporation owned, directly or indirectly, by
stockholders of the Company in substantially the same proportions as their
ownership of the Company and (b) "Beneficial Owner" shall have the meaning set
forth in Rule 12d-3 under the Exchange Act.

                                  SECTION 4
                               RETENTION BONUS

         4.1      ENTITLEMENT TO RETENTION BONUS. Subject to the following
provisions of this Section 4 and Section 6, a Participant shall be entitled to
receive a retention bonus determined in accordance with Section 4.2 if the
Participant remains continuously employed with the Employer (or its successor
in interest) from the date he or she is designated a Participant by the Board
through the date a Retention Event occurs (the "Retention Trigger Date").

         4.2      RETENTION BONUS. A Participant who becomes entitled to a
retention bonus in accordance with the provisions of Section 4.1 shall be
entitled to a lump sum payment in cash no later than ten business days after
the Retention Trigger Date equal to the Participant's Retention Percentage
shown in his/her Participation Agreement times the Participant's Base Amount.

         4.3      PARTICIPANT'S BASE AMOUNT.  For purposes of the Plan, the
Participant's Base Amount is equal to the sum of:

         (1)      the Participant's annual rate of salary or base compensation
                  in effect on the Retention Trigger Date, plus

         (2)      the Participant's target bonus percentage rate in effect on
                  the Retention Trigger Date times the amount described in
                  clause (1) of this Section.

         4.4      DEEMED RETENTION EVENT. If the Participant's employment is
terminated before the Retention Trigger Date, and such termination is at the
request of a third party who has taken steps to effect a Retention Event or
Change in Control or the termination is by the Participant's Employer for a
reason other than Cause (as defined in Section 5.2), death or Disability (as
defined in Section 5.3) or is by the Participant because of Good Reason (as
defined in Section 5.1), then as to such Participant only, a Retention Event
shall be deemed to have occurred immediately prior to such termination. Such
Participant shall be entitled to a retention bonus equal to such Participant's
Retention Percentage shown in his/her Participation Agreement times the
Participant's Base Amount (as defined in Section 4.3). However, the
Participant's entitlement to a retention bonus shall be subject to the
Participant's execution of a release in form and substance reasonably
acceptable to the Employer, and the retention bonus shall be paid in cash in
equal monthly installments for the number of months equal to the Retention
Percentage multiplied by twelve (12). The first such installment shall be paid
no later than ten (10) business days after the date of termination of
employment.

                                      4

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         4.5      MULTIPLE BONUSES PROHIBITED.  The Company will pay a
Retention Bonus to a Participant only one time, even if multiple Retention
Events occur.

                                  SECTION 5
                     CHANGE IN CONTROL SEVERANCE BENEFITS

         5.1      ENTITLEMENT TO SEVERANCE BENEFITS. Subject to the following
provisions of this Section 5 and Section 6, a Participant shall be entitled to
receive severance benefits determined in accordance with Section 5.5 if the
Participant's employment with an Employer is terminated during the
24-consecutive-month period immediately following a Change in Control either
by the Participant's Employer for reasons other than Cause (as defined in
Section 5.2), death or Disability (as defined in Section 5.3) or by the
Participant because of Good Reason (as defined in Section 5.4).

         5.2      CAUSE. For purposes of this Plan, the term "Cause" means (i)
a Participant willfully engaging in conduct materially injurious to an
Employer, or (ii) the willful and continual failure by a Participant to
substantially perform the duties assigned to the Participant (other than any
failure resulting from the Participant's incapacity due to physical injury or
illness or mental illness), which failure has not been corrected by the
Participant within 30 days after receipt of a written notice from the Chief
Executive Officer or Board of Directors of the Employer specifying the manner
in which the Participant has failed to perform such duties, or (iii) a
Participant's violation of the written policies of the Employer that, in
accordance with the normal employment practices of the Employer, has become a
termination event. No act, or failure to act, by a Participant shall be deemed
"willful" unless done, or omitted to be done, not in good faith and without
reasonable belief that such action or omission was in the best interest of the
Employer.

         5.3      DISABILITY. For purposes of this Plan, the term "Disability"
shall have the meaning set forth under the Employer's long-term disability
plan or policy.

         5.4      TERMINATION FOR GOOD REASON.  For purposes of this Plan, a
termination because of "Good Reason" means a resignation by a Participant
following the occurrence of:

         (1)      a reduction in the Participant's annual salary or annual
                  bonus opportunity;

         (2)      the failure to continue the Participant's participation in
                  incentive compensation plans or stock option plans on
                  substantially the same basis, both in terms of the amount of
                  benefit provided and the level of the Participant's
                  participation relative to other participants, as existed
                  immediately before the Change in Control;

         (3)      the assignment to the Participant of duties inconsistent
                  with, or a significant diminution in, the duties,
                  responsibilities or authority of the Participant in effect
                  immediately before a Change in Control, including without
                  limitation imposition of travel obligations that differ
                  materially from required business travel immediately before
                  the Change in Control;

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         (4)      if the Participant's position immediately before a Change in
                  Control is that of a Vice President or above elected by the
                  Board of the Company, a diminution in the status of the
                  position of the Participant in effect immediately before the
                  Change in Control, including without limitation a change in
                  the level of the position to which the Participant reports
                  or the assignment to a division, subsidiary or other
                  position that does not have responsibility and authority for
                  the entire consolidated business entity.

         (5)      the relocation of the Participant's principal place of
                  employment without Participant's consent to a location more
                  than twenty-five (25) miles from the location of such
                  principal place of employment immediately prior to the
                  Change in Control;

         (6)      the failure of the Company to obtain a satisfactory
                  agreement from any successor to assume and agree to perform
                  this Plan as contemplated by Section 8.3;

         (7)      the Company's failure to perform or observe any of the
                  material terms of this Plan.

         5.5      SEVERANCE BENEFITS. A Participant who becomes entitled to
severance benefits in accordance with the provisions of Section 5.1 shall,
subject to Participant's execution of a release in form and substance
reasonably acceptable to the Employer, be entitled to a lump sum payment in
cash no later than ten business days after the date of termination equal to
the Participant's Severance Percentage shown in his/her Participation
Agreement times the Participant's Base Severance Amount.

         5.6      BASE SEVERANCE AMOUNT.  For purposes of the Plan, the
                  Participant's Base Severance Amount is equal to the sum of:

         (1)      the Participants' annual rate of salary or base compensation
                  in effect at the time of termination, or as of the date of
                  the Change in Control, if higher; plus

         (2)      the Participant's target bonus percentage rate in effect at
                  the time of termination or, if higher, on the date of the
                  Change of Control, times the amount described in clause (1)
                  of this Section.

         5.7      BONUS PAYMENT FOR YEAR OF TERMINATION. If a Participant
becomes entitled to severance benefits under Section 5.5 in accordance with
the provisions of Section 5.1, and the Participant was otherwise participating
in the Company's bonus plans, the Participant shall also be entitled to a lump
sum bonus payment in cash no later than ten business days after the date of
termination equal to the product of the Participant's salary or base
compensation, as determined in Section 5.6(l), times the Participant's target
bonus percentage as of the date of termination or, if higher, the date of the
Change in Control. The payment due under this Section 5.7 shall be prorated
for the number of days employed during the calendar year of termination
divided by 365, and the amount of any bonus payments already made for the year
shall be deducted from such prorated amount.

                                      6

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         5.8      REDUCTION FOR OTHER PAYMENTS. The amount of severance
benefits to which a Participant is otherwise entitled upon a termination of
employment under the foregoing provisions of this Section 5 shall be reduced
by the amount, if any, of any other payments actually paid to the Participant
by an Employer as severance by reason of such termination under a plan which
provides severance benefits only or under the terms of an employment contract
between the Participant and the Participant's Employer.

                                  SECTION 6
                     CONFIDENTIALITY AND NON-COMPETITION

         6.1      CONFIDENTIALITY AND NON-COMPETITION - GENERAL. Any benefits
payable under this Plan are conditioned upon and subject to the terms of this
Section 6. To the extent that a Participant violates any provision of this
Section 6, the Company or Employer, as the case may be, will have no further
obligation to provide any benefit or payment due hereunder, and will also have
any other remedies available to the Company for such violation including but
not limited to a preliminary injunction, temporary restraining order or other
equivalent relief. Section 6 is in addition to the confidentiality and
non-competition agreements signed at or during employment with an Employer.
The Participant's receipt of payments under this Plan constitutes the
Participant's ratification and reaffirmation of such prior agreements as well
as those in this Plan.

         6.2      CONFIDENTIAL INFORMATION.  The Participant agrees that:

         (1)      Except as may be required by law, by lawful judicial,
                  governmental or regulatory authority, or by lawful order of
                  a court or agency of competent jurisdiction, or except to
                  the extent required to perform the Participant's duties
                  during the course of his/her employment with Employer or to
                  the extent that the Participant has express written
                  authorization from the Company, the Participant (i) shall
                  keep secret and confidential all Confidential Information
                  (as defined below), (ii) shall not disclose the same, either
                  directly or indirectly, to any other person, and (iii) shall
                  not use it in any way.

         (2)      For purposes of this Plan, the term "Confidential
                  Information" means all non-public information concerning the
                  Company and its affiliates that was acquired by or disclosed
                  to the Participant during the course of employment with the
                  Employer, or during the course of consultation with the
                  Employer following the Participant's date of termination,
                  including, without limitation:

                  (i)      any non-public information regarding the Company's
                           and its affiliates' customers, services, processes,
                           costs, operations and methods, whether past,
                           current or planned, as well as knowledge and data
                           relating to business plans, marketing and sales
                           information originated, owned, controlled or
                           possessed by the Company or its affiliates; and

                  (ii)     information regarding litigation and pending
                           litigation involving or affecting the Company or
                           its affiliates.

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<PAGE>

         (3)      To the extent that the Participant obtains information on
                  behalf of the Company or any of its affiliates that may be
                  subject to attorney-client privilege as to the Company's or
                  its affiliates' attorneys, the Participant shall take
                  reasonable steps to maintain the confidentiality of such
                  information and to preserve such privilege.

         (4)      The Participant agrees that effective with the date of
                  termination, the Participant will deliver to the Company all
                  papers, books, manuals, lists, correspondence, documents,
                  computer programs, computer spreadsheets, data captured on
                  machine-readable media, and other material containing or
                  relating to the Confidential Information, together with all
                  copies thereof, that are in the Participant's possession or
                  control, other than such materials as shall be necessary to
                  permit the Participant to prepare the Participant's tax
                  returns.

         (5)      Nothing in this Section 6.2 shall be construed so as to
                  prevent the Participant from using, in connection with his
                  employment for himself or an employer other than the Company
                  or any of its affiliates, knowledge that was acquired by
                  Participant during the course of his employment with the
                  Company and its affiliates, and which is generally known to
                  persons of his experience in other companies in the same
                  industry.

         6.3      NONCOMPETITION. Each Participant who becomes eligible for a
Severance Benefit under Section 5.5, agrees as further consideration for such
benefit that, for a period of one (1) year after the date of termination, the
Participant shall not be employed by, or otherwise engage or be interested in,
any business which is competitive with any business of the Company or of any
of its subsidiaries in which the Participant was engaged during his employment
prior to his termination.

                                  SECTION 7
                                 ENFORCEMENT

         7.1      ARBITRATION OF DISPUTES. All claims arising out of or
relating to this Plan shall be settled by arbitration in the city in which the
principal executive offices of the Participant's Employer are located
(disregarding any transfer of such offices after a Change in Control), by
three arbitrators, one of whom shall be appointed by the Company, one by the
Participant and the third of whom shall be appointed by the first two
arbitrators. If the first two arbitrators cannot agree on the appointment of a
third arbitrator, then the third arbitrator shall be appointed by the Chief
Judge of the United States District Court for such location. Each party shall
pay the fees and expenses of the arbitrator appointed by it and one-half of
the fees and expenses of the third arbitrator. The arbitration shall be
conducted in accordance with the rules of the American Arbitration
Association, except with respect to the selection of arbitrators which shall
be as provided in this Section. The decision of the arbitrators shall be final
and binding and judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction thereof.

         7.2      REIMBURSEMENT OF COSTS AND EXPENSES. In the event that it
shall be necessary or desirable for a Participant to retain legal counsel or
incur other costs and expenses in

                                      8

<PAGE>

connection with enforcement of rights under the Plan, the Employer shall pay
(or the Participant shall be entitled to recover from the Employer, as the
case may be) reasonable attorneys' fees and costs and expenses in connection
with enforcement of such rights (including the enforcement of any arbitration
award in court) to the extent determined by the arbitrators.

                                  SECTION 8
                           AMENDMENT OR TERMINATION

         8.1      AMENDMENT AND TERMINATION.  Subject to the provisions of
Section 8.2:

         (1)      The Company's Vice President - Human Resources, or such
                  other officer of the Company as may from time to time be
                  primarily responsible for human resource matters may, with
                  the concurrence of the Company's Vice President and Chief
                  Financial Officer, make minor or administrative written
                  amendments to the Plan;

         (2)      the Board of Directors of any Employer may terminate or,
                  with the consent of the Company's Board of Directors, amend
                  the Plan in writing as applied to it at any time;

         (3)      the Company's Board of Directors may terminate the Plan as
                  applied to it or as applied to each Employer at any time;
                  and

         (4)      this Plan will automatically terminate on December 31, 2002
                  unless a Retention Event or Change of Control has
                  theretofore occurred, is then pending or circumstances have
                  arisen that could result in a Retention Event or Change in
                  Control.

         8.2      PARTICIPANT RIGHTS. No amendment or termination of the Plan
which would directly or indirectly adversely affect any Participant shall be
effective if adopted after a Retention Event or Change in Control or during
the one-year period immediately preceding the Retention Trigger Date or a
Change in Control.

         8.3      SUCCESSORS. The obligations of each Employer under the Plan
shall be binding upon any assignee or successor in interest thereto. No
Employer shall merge, consolidate or combine with any other corporation, or
liquidate or dissolve, without making suitable arrangements for the payment of
any benefits which are or may become payable under the Plan.

                                  SECTION 9
                                MISCELLANEOUS

         9.1      ADJUSTMENT FOR TAX EFFECTS. If any payments or the value of
any benefits received or to be received by the Participant under this
Agreement, after taking into account all other payments and all other benefits
to which the Participant is entitled in connection with a Change in Control or
the Participant's termination of employment, are subject to an excise tax
under Section 4999 of the Internal Revenue Code of 1986 (the "Code") or any
successor provision to that Section, the payments and benefits to which the
Participant is entitled under this Agreement shall, unless the Participant's
employment agreement with the Employer provides for

                                      9

<PAGE>

tax gross-up benefits, be reduced to the extent required to avoid such excise
tax if, and only if, such reduction would result in a larger after-tax benefit
to the Participant, taking into account all applicable local, state, federal
and foreign income and excise taxes. The Participant shall be entitled to
select the order in which payments are to be reduced in accordance with the
preceding sentence. If requested by the Participant, the Company shall provide
complete compensation and tax data on a timely basis to the Participant and to
tax counsel designated by the Participant in order to enable the Participant
to determine the extent to which such payments and benefits may result in an
excise tax, and the Company shall reimburse the Participant for any reasonable
fees and expenses incurred by the Participant for such purpose. If the
Participant and the Company shall disagree as to whether a payment or benefit
under this Agreement will result in an excise tax or whether a reduction in
any payment or benefit will result in a larger after-tax benefit to the
Participant, the matter shall be resolved by an opinion of tax counsel chosen
by the Participant. The Company shall pay the fees and expenses of such tax
counsel, and shall make available such information as may be reasonably
requested by such advisor to prepare the opinion. If, by reason of the
adjustments under this section, the amount payable to the Participant cannot
be determined prior to the due date for such payment, the Company shall pay on
the due date the minimum amount which it in good faith determines to be
payable and the Company shall pay the remaining amount (or the Participant
shall repay any excess), with interest at a rate, compounded semi-annually,
equal to 120% of the applicable Federal rate determined under Section 1274(d)
of the Code, as soon as such remaining amount is determined in accordance with
this Section.

         9.2      MITIGATION AND SET-OFF. No Participant shall be required to
mitigate the amount of any payment provided for in this Plan by seeking other
employment or otherwise. Subject to Section 6, above, the Employers shall not
be entitled to set off against the amounts payable to any Participant under
this Plan any amounts owed to the Employers by the Participant, any amounts
earned by the Participant in other employment after termination of the
Participant's employment with the Employer, or any amount which might have
been earned by the Participant in other employment had he sought such other
employment.

         9.3      NON-ALIENATION. Participants shall not have any right to
pledge, hypothecate, anticipate or in any way create a lien upon any amounts
provided under this Plan; and no benefits payable hereunder shall be
assignable in anticipation of payment either by voluntary or involuntary acts
or by operation of law. Nothing in this Section shall limit a Participant's
rights or powers to dispose of the Participant's property by will or limit any
rights or powers which the Participant's executor or administrator would
otherwise have.

         9.4      WITHHOLDING.  All payments to a Participant under this Plan
will be subject to all applicable withholding of state and federal taxes.

         9.5      SOURCE OF PAYMENTS. The obligations of the Employers under
the Plan are solely contractual, and any amount payable under the terms of the
Plan shall be paid from the general assets of the Employers or from one or
more trusts, the assets of which are subject to the claims of the Employers'
general creditors.

         9.6      NOTICES. Any notice or document required to be given under
the Plan shall be considered to be given if actually delivered or mailed by
certified mail, postage prepaid, if to an

                                      10

<PAGE>

Employer, to the Chief Financial Officer of the Company at the Company's
principal business address or, if to a Participant, at the last address of
such Participant filed with the Employer.

         9.7      GENDER AND NUMBER. Where the context permits, words in any
gender shall include any other gender, words in the singular shall include the
plural, and the plural shall include the singular.

         9.8      NO RIGHT TO EMPLOYMENT OR CONTINUATION OF RELATIONSHIP.
Nothing in this Plan shall confer upon or be construed as giving any
Participant any right to remain in the employ of an Employer. An Employer may
at any time dismiss a Participant from employment free from any liability or
any claim except as expressly provided in this Plan. No employee of any
Employer shall have any claim to be designated a Participant and there is no
obligation for uniformity of treatment of any employee of an Employer.

         9.9      GOVERNING LAW. EXCEPT AS TO MATTERS RELATING TO THE INTERNAL
AFFAIRS OF THE COMPANY WHICH SHALL BE GOVERNED BY THE DELAWARE GENERAL
CORPORATION LAW, THE VALIDITY, CONSTRUCTION AND EFFECT OF THIS PLAN AND ANY
RULES AND REGULATIONS RELATING TO THIS PLAN SHALL BE DETERMINED IN ACCORDANCE
WITH THE LAWS OF THE COMMONWEALTH OF VIRGINIA, WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF AND WILL, TO THE MAXIMUM EXTENT
PRACTICABLE, BE DEEMED TO CALL FOR PERFORMANCE IN THE CITY OF ALEXANDRIA,
VIRGINIA.

         9.10     SEVERABILITY. If any provision of this Plan is or becomes or
is deemed to be invalid, illegal or unenforceable in any jurisdiction or as to
any individual Participant, or would disqualify this Plan under any law deemed
applicable by the Board, such provision shall be construed or deemed amended
to conform to applicable law, or if it cannot be construed or deemed amended
without, in the sole determination of the Board, materially altering the
intent of this Plan, such provision shall be stricken as to such jurisdiction
or Participant and the remainder of this Plan shall remain in full force and
effect.

         9.11     NO LIMITATION UPON THE RIGHTS OF THE COMPANY. This Plan
shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, or changes of its capital or business
structure; to merge, convert or consolidate; to dissolve or liquidate; or sell
or transfer all or any part of its business or assets.

         9.12     NO LIABILITY FOR GOOD FAITH DETERMINATIONS. The members of
the Board shall not be liable for any action, failure to act, omission or
determination taken or made in good faith with respect to this Plan.

                                      11

<PAGE>

                                  EXHIBIT A

                           PARTICIPATION AGREEMENT

         You have been designated by the Board of Directors as a Participant
in the Metrocall, Inc. Key Employee Retention Plan (the "Plan") with the
following Retention Percentage and Severance Percentage:

         Name of Participant: _____________________________
         Position: _______________________________________
         Retention Percentage: _____________________________
         Severance Percentage:_____________________________

         Your participation in the Plan is subject to and in accordance with
the express terms and conditions of the Plan. You agree to be bound by the
terms and conditions of the Plan, and acknowledge that you have received a
copy of the Plan.

         You hereby acknowledge and agree that the amount of severance
benefits to which you are entitled upon a termination of employment under the
provisions of the Plan shall be reduced by the amount, if any, of any other
payments actually paid to you by an Employer as severance by reason of such
termination under a plan which provides severance benefits only or under the
terms of an employment contract between you and your Employer.

         [You also hereby acknowledge and agree that to the extent the Plan
conflicts with any provision of your ___________________________ regarding
severance compensation and benefits related to a change of control of the
Company or a Retention Event, the Plan shall control.]

         Capitalized terms not defined in this Participation Agreement will
have the same meanings assigned to them in the Plan.

         Dated as of April 1, 2001.

<TABLE>
<S>                                       <C>

                                           METROCALL, INC.

                                           By:
                                               ----------------------------------
                                           Title:
                                                  -------------------------------

Participant:

--------------------------------------
Signature

--------------------------------------
Printed Name
</TABLE>

<PAGE>
                                  AMENDMENT TO
                  METROCALL, INC. KEY EMPLOYEE RETENTION PLAN

To Participants:

     Please note that the Metrocall, Inc. Key Employee Retention Plan (the
"Retention Plan"), dated as of April 1, 2001 has been amended as set forth
below. This Amendment is effective as of May 10, 2001.

     The last sentence of Section 5.7 has been amended to add the words "or
anniversary year, as applicable" and, as amended, now reads:

"The payment due under this Section 5.7 shall be prorated for the number of
days employed during the calendar year or anniversary year, as applicable, of
termination divided by 365, and the amount of any bonus payments already made
for the year shall be deducted from such prorated amount."

     The Retention Plan, except as amended and modified above, remains in
effect.

                              METROCALL, INC.

                              By: STEVEN D. JACOBY
                                  ----------------------------------
                              Title:  EXECUTIVE VICE PRESIDENT & CEO
                                      ------------------------------<PAGE>
                                                                    EXHIBIT 10.7

                                      BORROWER
                              CET ENVIRONMENTAL SERVICES, INC.
COMPASS BANK                  A CALIFORNIA CORPORATION             COMMERCIAL
11210 HURON                                                       VARIABLE RATE
NORTHGLENN, CO 80234                                               REVOLVING OR
(800) 570-2173 "LENDER"                                             DRAW NOTE

                                      ADDRESS
                              7032 SOUTH REVERE PARKWAY
                              ENGLEWOOD, CO 80112
                              TELEPHONE NO.       IDENTIFICATION NO.
                              (720) 875-3366      33-0285964

<Table>
<Caption>
   OFFICER           INTEREST         PRINCIPAL AMOUNT/      FUNDING/        MATURITY        CUSTOMER       LOAN
IDENTIFICATION         RATE            CREDIT LIMIT       AGREEMENT DATE       DATE           NUMBER        NUMBER
<S>                  <C>              <C>                 <C>                <C>             <C>           <C>
DMB                  VARIABLE          $1,000,000.00         12/09/01        06/09/02                      10196707
</Table>

RENEWAL OF EXISTING WORKING CAPITAL LINE OF CREDIT

PROMISE TO PAY: For value received, Borrower promises to pay to the order of
Lender the principal amount of One Million and no/100 Dollars ($1,000,000.00)
or, if less, the aggregate unpaid principal amount of all loans or advances made
by the Lender to the Borrower under this Note plus interest on the unpaid
principal balance at the rate and in the manner described below, until all
amounts owing under this Note are paid in full. All amounts received by Lender
shall be applied first to accrued unpaid interest, then to unpaid principal and
then to unpaid late charges and expenses, or in any other order as determined by
Lender, in Lender's sole discretion, as permitted by law.

REVOLVING OR DRAW FEATURE: [X] This Note possesses a revolving feature. Upon
satisfaction of the conditions set forth in this Note Borrower shall be entitled
to borrow up to the full principal amount of the Note and to repay and reborrow
from time to time during the term of this Note. [  ] This Note possesses a draw
feature. Upon satisfaction of the conditions set forth in this Note, Borrower
shall be entitled to draw one or more times under this Note. Any repayment may
not be reborrowed. The aggregate amount of such draws shall not exceed the full
principal amount of this Note.

Information with regard to any loans or advances under this Note shall be
recorded and maintained by Lender in its internal records and such records
shall be conclusive of the principal and interest owed by Borrower under this
Note unless there is a material error in such records. The Lender's failure to
record the date and amount of any loan or advance shall not limit or otherwise
affect the obligations of the Borrower under this Note to repay the principal
amount of the loans or advances together with all interest accruing thereon.
Borrower shall be entitled to inspect or obtain a copy of the records during
Lender's business hours.

CONDITIONS FOR ADVANCES: If no Event of Default has occurred under this Note,
Borrower shall be entitled to borrow monies under this Note (subject to the
limitations described above) under the following conditions:

     TO BE DRAWN AS NEEDED, SUBJECT TO BANK APPROVAL.

INTEREST RATE: This Note has a variable rate feature. The interest rate on this
Note may change from time to time if the Index Rate identified below changes.
Interest shall be computed on the basis of the actual number of days over 360
days per year. Interest on this Note shall be calculated and payable at a
variable rate equal to 1.000% per annum over the Index Rate. The initial
interest rate on this Note shall be 6.000% per annum. Any change in the
interest rate resulting from a change in the Index Rate will be effective on:

     THE ACTUAL DATE OF CHANGE.

RATE LIMITATIONS: Subject to applicable law, the minimum interest rate on this
Note shall be 5.000% per annum. The maximum interest rate on this Note shall not
exceed 21.000% per annum, or if less, or if a maximum rate is not indicated,
the maximum interest rate Lender is permitted to charge by law. The maximum rate
increase at any one time will be n/a%. The maximum rate decrease at any one
time will be n/a%.

INDEX RATE: The Index Rate for this Note shall be:

     The prime rate as published in the Wall Street Journal's "Money Rates"
     table. If multiple prime rates are quoted in the table, then the highest
     prime rate will be the Index Rate.

If the Index Rate is redefined or becomes unavailable, then Lender may select
another index which is substantially similar.

DEFAULT RATE: If there is an Event of Default under this Note, the Lender may,
in its discretion, increase the interest rate on this Note to: 10.000% over the
promissory note rate or the maximum interest rate Lender is permitted to charge
by law, whichever is less.

PAYMENT SCHEDULE: Borrower shall pay the principal and interest according to the
following schedule:

Interest only payments beginning January 09, 2002 and continuing at monthly
time intervals thereafter. A final payment of the unpaid principal balance plus
accrued interest is due and payable on June 09, 2002.

PREPAYMENT: This Note may be prepaid in part or in full on or before its
maturity date. If this Note contains more than one installment, any partial
prepayment will not affect the due date or the amount of any subsequent
installment, unless agreed to, in writing, by Borrower and Lender. If this Note
is prepaid in full, there will be: [X] No minimum finance charge. [ ] A minimum
finance charge of $_________________.

LATE CHARGE: If a payment is received more than 10 days late, Borrower will be
charged a late charge of: [X] 5.00% of the unpaid payment; [ ] $______ or
______% of the unpaid payment, whichever is [ ] greater [ ] less.

SECURITY: To secure the payment and performance of obligations incurred under
this Note, Borrower grants Lender a security interest in all of Borrowers right,
title, and interest in all monies, instruments, savings, checking and other
accounts of Borrower (excluding IRA, Keogh, trust accounts and other accounts
subject to tax penalties if so assigned) that are now or in the future in
Lender's custody or control. [ ] If checked, the obligations under this Note are
also secured by the collateral described in any security instrument(s) executed
in connection with this Note, and any collateral described in any other security
instrument(s) securing this Note or all of Borrower's obligations.

RENEWAL: [X] If checked, this Note is a renewal, but not a satisfaction, of
Loan Number 10196682.
================================================================================
THE PERSONS SIGNING BELOW ACKNOWLEDGE THAT THEY HAVE READ, UNDERSTAND, AND AGREE
TO THE TERMS AND CONDITIONS OF THIS NOTE, INCLUDING THE PROVISIONS ON THE
REVERSE SIDE, AND FURTHER ACKNOWLEDGE RECEIPT OF AN EXACT COPY OF THIS NOTE.

Dated: December 09, 2001

BORROWER: CET ENVIRONMENTAL SERVICES, INC.        BORROWER:
          A CALIFORNIA CORPORATION

By: /s/ STEVEN H. DAVIS
    ---------------------------------------       ------------------------------
    STEVEN H. DAVIS
    PRESIDENT

BORROWER:                                         BORROWER:

-------------------------------------------       ------------------------------

BORROWER:                                         BORROWER:

-------------------------------------------       ------------------------------

BORROWER:                                         BORROWER:

-------------------------------------------       ------------------------------

<PAGE>

                              TERMS AND CONDITIONS

1. EVENTS OF DEFAULT. An Event of Default will occur under this Note in the
event that Borrower, any guarantor or any other third party pledging collateral
to secure this Note:

     (a)  fails to make any payment on this Note or any other indebtedness to
          Lender when due;

     (b)  fails to perform any obligation or breaches any warranty or covenant
          to Lender contained in this Note, any security instrument, or any
          other present or future written agreement regarding this or any other
          indebtedness of Borrower to Lender;

     (c)  provides or causes any false or misleading signature or representation
          to be provided to Lender;

     (d)  sells, conveys, or transfers rights in any collateral securing this
          Note without the written approval of Lender; destroys, loses or
          damages such collateral in any material respect; or subjects such
          collateral to seizure, confiscation or condemnation;

     (e)  has a garnishment, judgment, tax levy, attachment or lien entered or
          served against Borrower, any guarantor, or any third party pledging
          collateral to secure this Note or any of their property;

     (f)  dies, becomes legally incompetent, is dissolved or terminated, ceases
          to operate its business, becomes insolvent, makes an assignment for
          the benefit of creditors, fails to pay debts as they become due, or
          becomes the subject of any bankruptcy, insolvency or debtor
          rehabilitation proceeding;

     (g)  fails to provide Lender evidence of satisfactory financial condition;

     (h)  has a majority of its outstanding voting securities sold, transferred
          or conveyed to any person or entity other than any person or entity
          that has the majority ownership as of the date of the execution of
          this Note; or

     (i)  causes Lender to deem itself insecure due to a significant decline in
          the value of any real or personal property securing payment of this
          Note, or Lender in good faith, believes the prospect of payment or
          performance is impaired.

2. RIGHTS OF LENDER ON EVENT OF DEFAULT. If there is an Event of Default under
this Note, Lender will be entitled to exercise one or more of the following
remedies without notice or demand (except as required by law):

     (a) to declare the principal amount plus accrued interest under this Note
and all other present and future obligations of Borrower immediately due and
payable in full, such acceleration shall be automatic and immediate if the
Event of Default is a filing under the Bankruptcy Code;

     (b) to collect the outstanding obligations of Borrower with or without
resorting to judicial process;

     (c) to cease making advances under this Note or any other agreement between
Borrower and Lender;

     (d) to take possession of any collateral in any manner permitted by law;

     (e) to require Borrower to deliver and make available to Lender any
collateral at a place reasonably convenient to Borrower and Lender,

     (f) to sell, lease or otherwise dispose of any collateral and collect any
deficiency balance with or without resorting to legal process;

     (g) to set-off Borrower's obligations against any amounts due to Borrower
including, but not limited to, monies, instruments, and deposit accounts
maintained with Lender; and

     (h) to exercise all other rights available to Lender under any other
written agreement or applicable law.

Lender's rights are cumulative and may be exercised together, separately, and in
any order. Lender's remedies under this paragraph are in addition to those
available at common law, including, but not limited to, the right of set-off.

3. DEMAND FEATURE. [ ] If checked, this Note contains a demand feature. Lender's
right to demand payment, at any time, and from time to time shall be in Lender's
sole and absolute discretion, whether or not any default has occurred.

4. FINANCIAL INFORMATION. Borrower will at all times keep proper books of record
and account in which full, true and correct entries shall be made in accordance
with generally accepted accounting principles and will deliver to Lender, within
ninety (90) days after the end of each fiscal year of Borrower, a copy of the
annual financial statements of Borrower relating to such fiscal year, such
statements to include (i) the balance sheet of Borrower as at the end of such
fiscal year and (ii) the related income statement, statement of retained
earnings and statement of cash flow of Borrower for such fiscal year, prepared
by such certified public accountants as may be reasonably satisfactory to
Lender. Borrower also agrees to deliver to Lender within fifteen (15) days after
filing same, a copy of Borrower's income tax returns and also, from time to
time, such other financial information with respect to Borrower as Lender may
request.

5. MODIFICATION AND WAIVER. The modification or waiver of any of Borrower's
obligations or Lender's rights under this Note must be contained in a writing
signed by Lender. Lender may perform any of Borrower's obligations or delay or
fail to exercise any of its rights without causing a waiver of those obligations
or rights. A waiver on one occasion will not constitute a waiver on any other
occasion. Borrower's obligations under this Note shall not be affected if Lender
amends, compromises, exchanges, fails to exercise, impairs or releases any of
the obligations belonging to any co-borrower or guarantor or any of its rights
against any co-borrower, guarantor, the collateral or any other property
securing the obligations.

6. SEVERABILITY. If any provision of this Note is invalid, illegal or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

7. ASSIGNMENT. Borrower agrees not to assign any of Borrower's rights, remedies
or obligations described in this Note without the prior written consent of
Lender, which consent may be withheld by Lender in its sole discretion. Borrower
agrees that Lender is entitled to assign some or all of its rights and remedies
described in this Note without notice to or the prior consent of Borrower.

8. NOTICE. Any notice or other communication to be provided to Borrower or
Lender under this Note shall be in writing and sent to the parties at the
addresses described in this Note or such other address as the parties may
designate in writing from time to time.

9. APPLICABLE LAW. This Note shall be governed by the laws of the state
indicated in Lender's address. Unless applicable law provides otherwise,
Borrower consents to the jurisdiction and venue of any court located in such
state selected by Lender, in its discretion, in the event of any legal
proceeding under this Note.

10. COLLECTION COSTS. To the extent permitted by law, Borrower agrees to pay
Lender's reasonable fees and costs, including, but not limited to, fees and
costs of attorneys and other agents (including without limitation paralegals,
clerks and consultants), whether or not such attorney or agent is an employee of
Lender, which are incurred by Lender in collecting any amount due or enforcing
any right or remedy under this Note, whether or not suit is brought, including,
but not limited to, all fees and costs incurred on appeal, in bankruptcy, and
for post-judgment collection actions.

11. MISCELLANEOUS. This Note is being executed primarily for commercial,
agricultural, or business purposes. Borrower and Lender agree that time is of
the essence. Borrower agrees to make all payments to Lender at any address
designated by Lender and in lawful United States currency. Borrower and any
person who endorses this Note waive presentment, demand for payment, notice of
dishonor and protest and further waive any right to require Lender to proceed
against anyone else before proceeding against Borrower or said person. All
references to Borrower in this Note shall include all of the parties signing
this Note, and this Note shall be binding upon the heirs, successors and assigns
of Borrower and Lender. If there is more than one Borrower their obligations
under this Note shall be joint and several. Information concerning this Note may
be reported to credit reporting agencies and will be made available when
requested by proper legal process. This Note represents the complete and
integrated understanding between Borrower and Lender regarding the terms hereof.

12. JURY TRIAL WAIVER. LENDER AND BORROWER HEREBY WAIVE ANY RIGHT TO A TRIAL BY
JURY IN ANY CIVIL ACTION ARISING OUT OF, OR BASED UPON, THIS NOTE OR THE
COLLATERAL SECURING THIS NOTE.

13. ADDITIONAL TERMS:

    SEE ADDENDUM TO PROMISSORY NOTE.

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