Exhibit 10.25

NEUTRAL TANDEM, INC.

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) is entered into as of November 3,
2006, by and between Brett Scorza, an individual resident of Plainfield,
Illinois (the “Executive”), and Neutral Tandem, Inc., a Delaware corporation
(the “Company”).

WHEREAS, the Company desires to continue to employ the Executive and the
Executive is willing to accept such employment upon the terms and conditions set
forth herein.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, the parties agree as follows:

1. Employment by the Company.

1.1 Effective Date.  The effective date of this Agreement shall be November 3,
2006 (the “Effective Date”) and this Agreement shall have an initial term of
four (4) years from the Effective Date unless terminated sooner pursuant to
Section 6.  Unless either party provides written notice to the other of its or
his intent not to renew this Agreement at least thirty (30) days prior the
expiration of the initial term (or of any subsequent term) hereof, this
Agreement shall automatically renew for successive one (1)-year terms beginning
on the anniversary of the prior term.

1.2 Position.  Subject to terms set forth herein, the Company agrees to employ
Executive in the position of Vice President of Information Systems hereby
continues to accept such position.  During the term of his employment with the
Company, Executive will devote his best efforts and all of his business time and
attention (except for vacation periods as set forth herein, reasonable periods
of illness or other incapacities permitted by the Company’s general employment
policies) to the business of the Company.  

1.3 Duties.  Executive shall perform such duties as are customarily associated
with his then current title and as assigned to the Executive by the Company’s
Board of Directors (the “Board”).  The Board has the right to assign and change
the Executive’s duties at any time, provided, however, that certain assignments
and changes in Executive’s duties hereunder may trigger certain rights and
remedies of Employee as set forth elsewhere herein.  At the request of the
Board, the Executive shall serve as a member of the Board and any subsidiary of
the Company without compensation other than that provided in this Agreement.

1.4 Other Employment Policies.  The employment relationship between the parties
shall also be governed by the general employment policies and practices of the
Company, including those relating to protection of confidential information and
assignment of inventions, except that when the terms of this Agreement differ
from or are in conflict with the Company’s general employment policies or
practices, this Agreement shall control.  

2. Compensation.

2.1 Salary.  Executive is currently receiving for all services rendered under
this Agreement an annualized base salary of $160,709, subject to standard
federal and state withholding requirements, payable in accordance with Company’s
usual payroll practices.  Such salary shall be adjusted no less than annually at
the discretion of the Board beginning June 2007, but in no event will the base
salary be reduced.

2.2 Bonus. The Executive will be eligible to receive an annual bonus, in the
form of a cash payment and/or equity award, as determined by the Board in its
discretion, of up to thirty percent (30%) of Executive’s base salary for
calendar year 2006, and, for subsequent years, as determined by the Board.  Any
bonus shall be based on the extent to which Executive achieves performance goals
to be established by the Board from time to time in consultation with the
Executive.  The parties agree to work in good faith to establish performance
goals for 2007 as soon as practicable following the Effective Date.  The Company
will pay Executive’s bonus, if any, no later than March 15 in the calendar year
following the calendar year to which the bonus relates.  No bonus shall be
deemed to have been earned by Executive for any calendar year in which the
Executive is not actively employed as of December 31 of the calendar year to
which the bonus relates.    

2.3 Benefits.  

(a) Executive shall be eligible to participate in all benefits plans and
programs that the Company may offer to its employees generally from time to
time, under the terms and conditions of such plans or programs.  Executive shall
be entitled to four (4) weeks paid vacation, to be earned in accordance with the
Company’s policy or practice.

(b) During the term of this Agreement, the Company will provide Executive with a
cell phone/PDA and laptop computer, which shall be returned promptly by the
Executive to the Company upon termination of his employment.  

2.4 Expense Reimbursement.  

The Company will reimburse Executive for reasonable and customary business
expenses, including monthly cell phone/PDA charges, in accordance with the
Company’s standard reimbursement policies in effect from time to time.

 

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3. [intentionally omitted.]

4. Employee Obligations.

4.1 Proprietary Information and Inventions Agreement.  Executive agrees to
continues to abide by the terms and conditions of the Proprietary Information
and Inventions Agreement executed by the Executive on 9/02/2004.

4.2 Non-Competition Obligations.  

(a) Executive and the Company acknowledge that (i) the Company has developed and
will continue to develop goodwill, going concern value, customer and client
relationships and confidential information that are valuable property rights of
the Company and that Executive will have access to and knowledge concerning such
rights, which if used other than for the benefit of the Company could
significantly injure the Company; and (ii) the Company is engaged in the
operation of telecommunication hubs and switching systems, transmission and
switching of voice, data, audio, video and information via telephone, wireless
and cable networks, and IP peering (the “Business”).  Accordingly, and in
consideration of the mutual promises contained herein, Executive covenants that,
during the period commencing on the Effective Date and terminating on  the first
(1st) anniversary of the Executive's termination of employment (the “Restrictive
Period”), he shall not, without the prior written consent of the Company,
directly or indirectly, in his individual capacity or on behalf of any other
individual, partnership, corporation, limited liability company or any other
entity (collectively “Person”), Compete with the Company or any of its
respective successors or assigns.  

(b) For purposes of this Agreement, “Compete” shall mean:  (i) to engage in
business activities identical or substantially similar to the Business as
engaged in by the Company, or any entity controlling, under common control or
controlled by the Company (collectively, the “Neutral Tandem Group”), at any
time during the one (1)-year period preceding the date of termination of
Executive’s employment  (a “Competitive Business”) hereunder within the
geographic limits of those standard metropolitan statistical areas in the United
States within which the Neutral Tandem Group has engaged in the Business during
the one (1)-year period preceding the date of termination of Executive’s
employment or within which the Company contemplates engaging in or has developed
plans to engage in (based on its then-current business plan, operating plan, or
similar document) the Business during the one (1)-year period following the date
of termination of Executive’s employment (the “Territory”); (ii) to assist any
Person (whether in a financial, managerial, employment, advisory or other
capacity or as a stockholder or owner, or by the provision of information) to
engage in a Competitive Business within the Territory; or (iii) to own any
interest in or to organize a corporation, partnership or other business or
organization which engages in a Competing Business within the
Territory.  Notwithstanding the foregoing, Executive’s ownership of or
investment in an otherwise Competing Business shall not be a violation of
Section 4.2 if (a) the stock of such business is publicly traded, (b)
Executive’s equity interest in such business does not exceed three percent (3%)
of the aggregate outstanding equity interests of such business, and (c)
Executive does not otherwise participate in the management or operational
affairs of such business, including as an advisor or consultant or in any other
capacity.

(c) The Executive acknowledges and agrees that the covenants contained in this
Section 4.2 are reasonable in scope, geographic application and duration, in
view of the benefits to the Executive hereunder, and that the provisions of this
Section 4.2 are both necessary and reasonable for the protection of the
Company.  

5. Former Employment.  

5.1 No Conflict with Existing Obligations.  Executive represents that his
performance of all the terms of this Agreement and as an employee of the Company
does not and will not breach any agreement or obligation of any kind made prior
to his employment by the Company, including agreements or obligations he may
have with prior employers or entities for which he has provided
services.  Executive has not entered into, and agrees he will not enter into,
any agreement or obligation either written or oral in conflict herewith.

6. Termination Of Employment.

6.1 General.  Employee’s employment by the Company may be terminated by the
Company or the Executive at any time, with or without Cause (as defined
below).  Upon termination of Executive’s employment, the Company’s obligations
to pay Executive’s base salary and bonus shall be limited as provided in
Sections 6.2 and 6.3 below.

6.2 Termination Without Cause, Etc.  In the event Executive’s employment
hereunder is terminated (i) by the Company without Cause, (ii) by Executive for
Good Reason (as defined below), or (iii) following a Change of Control (as
defined below), and Executive’s employment with the surviving company is
terminated or Executive’s responsibilities are materially diminished within six
(6) months by the surviving company, the Company will provide Executive, subject
to his compliance with the agreements referred to or set forth in Section 4, (x)
any unpaid base salary through the date of termination, and any accrued vacation
pay, (y) severance pay equal to twelve (12) months’ base salary at the salary
rate in effect on the date of termination.  It is a condition precedent to the
Company’s obligation to make any severance payments to Executive pursuant to
this Section 6.2 that Executive executes a general release, in form and
substance acceptable to the Board, on or prior to the date of termination in
favor of the Company, the members of the Board and its other affiliates
releasing all claims arising out of Executive’s employment and his termination
of employment.  

 

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6.3 Other Termination Events.  In the event that Executive dies, becomes
Disabled (as defined below), or Executive’s employment terminates or is
terminated for any other reason other than as described in Section 6.2(i), (ii)
or (iii), the Company will only be obligated to pay Executive (a) any unpaid
base salary through the date of termination, (b) any unused vacation accrued
through the date of termination, and (c) any unreimbursed business expenses.

6.4 Certain Definitions.  For purposes of this Agreement:

(a) The term “Cause” shall mean any of the following: (i) Executive’s willful
misconduct in the performance of his duties for the Company, or Executive’s
willful failure to abide by or comply with any legal policy or directive of the
Board, (ii) conviction of or plea of guilty or any other plea other than “not
guilty” to a felony, or any crime involving dishonesty or moral
turpitude;  (iii) the violation by Executive of any material provision of this
Agreement which either is not cured within ten (10) days after written notice is
given to Executive by the Company or constitutes a habitual breach; or
(iv) Executive’s dishonesty, misappropriation or fraud with regard to the
business or affairs of the Company or its affiliates.  

(b) The term “Change of Control” of the Company shall mean any transaction or
series of related transactions whether by consolidation, merger, sale or
issuance of equity securities, or sale or transfer of all or substantially all
of the Company’s assets, or otherwise, that results in the equity holders of the
Company immediately prior to such transaction or series of transactions owning
less than fifty percent (50%) of the equity or voting power of the surviving
entity, or controlling less than fifty percent (50%) of the Company’s assets,
thereafter.  

(c) The term “Disability” shall mean, Executive is prevented, by illness,
accident, disability or any other physical or mental condition (to be determined
by means of a written opinion of a competent medical doctor chosen by mutual
agreement of the Company and you or your personal representative(s)) from
substantially performing your duties and responsibilities hereunder for one (1)
or more periods totaling ninety (90) days in any twelve (12)-month period.

(d) The term “Good Reason” shall mean, without Executive’s written consent:  (i)
a material adverse change in Executive’s title or the duties assigned to
Executive;  or (ii) any material failure by the Company to comply with its
obligations under this Agreement.  “Good Reason” shall not be defined to include
Company reassigning Executive to a senior position in his field at the Vice
President level and compensation level provided herein.

7. General Provisions.

7.1 Notices.  Any notices provided hereunder must be in writing and shall be
deemed effective upon the earlier of delivery, if by hand or by facsimile (with
confirmed receipt), one (1) business day after deposit with a reputable
overnight courier service, or three (3) business days after mailing by first
class mail, to the Company at its primary office location and to Executive at
his address as listed on the Company payroll.

7.2 Severability.  Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provisions had never been contained herein.

7.3 Waiver.  If either party should waive any breach of any provisions of this
Agreement, he or it shall not thereby be deemed to have waived any preceding or
succeeding breach of the same or any other provision of this Agreement.

7.4 Complete Agreement.  This Agreement constitutes the entire agreement between
Executive and the Company with respect to the subject matter contained
herein.  This Agreement supersedes any prior oral discussions or written
communications and agreements with respect to the subject matter contained
herein. This Agreement is entered into without reliance on any promise or
representation other than those expressly contained herein, and it cannot be
modified or amended except in writing signed by an authorized officer of the
Company.

7.5 Counterparts.  This Agreement may be executed in separate counterparts, any
one of which need not contain signatures of more than one party, but all of
which taken together will constitute one and the same Agreement.

7.6 Headings.  The headings of the sections hereof are inserted for convenience
only and shall not be deemed to constitute a part hereof nor to affect the
meaning thereof.

7.7 Successors and Assigns.  This Agreement is intended to bind and inure to the
benefit of and be enforceable by Executive and the Company, and their respective
successors, assigns, heirs, executors and administrators, except that Executive
may not assign any of his duties hereunder and he may not assign any of his
rights hereunder without the written consent of the Company, which shall not be
withheld unreasonably.

7.8 Attorney Fees.  Each of the Company and Executive shall be responsible for
their own respective costs and expenses (including, without limitation,
attorneys’ fees and costs) in connection with any action brought by any party to
enforce its rights hereunder or any other legal action involving this Agreement
or any party’s performance hereunder.

 

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7.9 Choice of Law.  All questions concerning the construction, validity and
interpretation of this Agreement will be governed by the law of the internal,
substantive laws of the State of Delaware, without reference to the conflict of
laws provisions thereof.  Executive expressly consents to the jurisdiction of
the state and federal courts for New Castle County, Delaware, for all actions
arising out of or relating to this Agreement.

7.10 Section 409A Compliance.  

(a) It is the intention of the parties that no payment or entitlement pursuant
to this Agreement will give rise to any adverse tax consequences to any person
pursuant to Internal Revenue Code Section 409A.  This Agreement shall be
interpreted to that end, and no effect shall be given to any provision herein in
a manner that reasonably could be expected to give rise to adverse tax
consequences under said 409A.  Should either party determine that there is a
reasonable possibility that the text of this Agreement could give rise to such
adverse tax consequences, the parties agree to negotiate in good faith to amend
the Agreement to obviate the possibility of such consequences.

(b) If at any time, the Company or any successor obligated to make any payment
hereunder (the “Employer”) has a class of stock that is publicly traded on an
established securities market or otherwise, then the Employer shall from time to
time compile a list of “Specified Employees” as defined in and pursuant to,
Prop. Reg. § 1.409A-1(i) or any successor regulation.  Notwithstanding any other
provision of this Agreement, if the Executive is a Specified Employee on the
date of termination of his employment within the meaning of Prop. Reg. §
1.409A-1(h)(ii) or any successor regulation (his “Termination of Employment”),
no payment of compensation shall be made to the Executive under any provision of
this Agreement (including Section 6.2) during the period ending six (6) months
from the date of his Termination of Employment unless the Employer determines
that there is no reasonable basis for believing that making such payment would
cause the Executive to suffer any adverse tax consequences pursuant to Section
409A of the Internal Revenue Code.  If any payment to the Executive is delayed
pursuant to the provisions of this Section 7.10(b), such payment instead shall
be made on the first (1st) business day following the expiration of the six
(6)-month period referred to herein, together with a compensatory amount in the
nature of interest computed at the “Prime Rate” as of the date of Termination of
Employment (as reported in The Wall Street Journal) plus two percent (2%).

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IN WITNESS WHEREOF, the parties have executed this Employment Agreement on the
day and year first above written.

 

NEUTRAL TANDEM, INC.

 

 

 

By:

 

/s/Surendra Saboo

 

 

Name: Surendra Saboo

 

 

Title:  EVP and COO

 

Accepted and agreed on and as of November 30, 2006

 

/s/Brett Scorza

Brett Scorza