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                                                                   EXHIBIT 10.19

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT



                  THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated and
effective the 1st day of November, 2000 (the "Effective Date") is made by and
between Global TeleSystems, Inc., a Delaware corporation (the "Company") and
GRIER C. RACLIN, an adult resident of Chevy Chase, Maryland (the "Executive").

RECITALS:

                  A. The Executive has heretofore been employed by the Company
pursuant to that certain Employment Agreement between the Executive and the
Company dated as of September 28, 1997 (the "Prior Agreement");

                  B. It is the desire of the Company to assure itself of the
continued services of Executive by engaging Executive as its Executive
Vice-President, General Counsel and Chief Administrative Officer; and

                  C. Executive desires to continue to serve the Company on the
terms herein provided;

                  NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements set forth below, the parties hereto agree as
follows:

                  1. Certain Definitions.

                   (a) "Annual Base Salary" shall have the meaning set forth in
           Section 5(a).

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

                   (c) "Bonus" shall have the meaning set forth in Section 5(b).

                   (d) The Company shall have "Cause" to terminate Executive's
           employment hereunder upon Executive's

                           (i) failure to follow a legal order of the Board or
                  the Chief Executive Officer of the Company, other than any
                  such failure resulting from Executive's Disability, after
                  notice and reasonable opportunity for cure,

                           (ii) fraud, embezzlement, or any other similar
                  illegal act involving moral turpitude committed by the
                  Executive in connection with the Executive's duties as an
                  executive of the Company or any subsidiary or affiliate of the
                  Company,

                           (iii) conviction of any felony or crime involving
                  moral turpitude which causes or may reasonably be expected to
                  cause substantial economic injury to or substantial injury to
                  the reputation of the Company or any subsidiary or affiliate
                  of the Company, or

                           (iv) willful or grossly negligent commission of any
                  other act or failure to act in connection with the Executive's
                  duties as an executive of the Company which causes or may
                  reasonably be expected (as of the time of such


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                  occurrence) to cause substantial economic injury to or
                  substantial injury to the reputation of the Company or any
                  subsidiary or affiliate of the Company, including, without
                  limitation, any material violation of the Foreign Corrupt
                  Practices Act, as described herein below.

                    (e) "Change in Control" shall mean any of the following
           events:

                           (i) a report shall be filed with the Securities and
                  Exchange Commission pursuant to the Exchange Act of 1934 (the
                  "Act), or successor law or provision, disclosing that any
                  "Person" (within the meaning of Section 13(d) of the Act),
                  other than the Company or a subsidiary of the Company, or an
                  employee benefit plan sponsored by the Company or a subsidiary
                  of the Company is, or becomes the beneficial owner (as such
                  term is defined in Exchange Act Rule 13d-3), directly or
                  indirectly of, 25% or more of the outstanding voting stock of
                  the Company (or securities convertible into Company Stock)
                  (calculated as provided in Exchange Act Rule 13d-3(d) in the
                  case of rights to acquire Company Stock),

                           (ii) any such "Person", other than the Company or a
                  subsidiary of the Company, or a employee benefit plan
                  sponsored by the Company or a Subsidiary of the Company, shall
                  purchase shares pursuant to a tender offer or exchange offer
                  to acquire any Company Stock (or securities convertible into
                  Company Stock) for cash, securities or any other
                  consideration, provided that after consummation of the offer,
                  the person in question is the beneficial owner (as such term
                  is defined in Exchange Act Rule 13d-3), directly or
                  indirectly, of 20% or more of the outstanding voting stock of
                  the Company (calculated as provided in Exchange Act Rule
                  13d-3(d) in the case of rights to acquire Company Stock),

                           (iii) the stockholders of the Company shall approve
                  (A) any consolidation, share exchange or merger of the Company
                  (a "Change of Control Transaction") (1) in which the
                  stockholders of the Company immediately prior to such Change
                  of Control Transaction do not own at least a majority of the
                  voting power of the entity which survives/results from such
                  Change of Control Transaction, or (2) in which a shareholder
                  of the Company immediately before such Change of Control
                  Transaction, but who does not own a majority of the voting
                  stock of the Company immediately prior to such Change of
                  Control Transaction, owns a majority of the Company's voting
                  stock after such Change of Control Transaction; or (B) any
                  sale, lease, exchange or other transfer (in one transaction or
                  a series of related transactions) of all or substantially all
                  the assets of the Company, including stock held in subsidiary
                  corporations or interests held in subsidiary ventures, or

                           (iv) there shall have been a change in a majority of
                  the members of the Board within a 24-month period unless the
                  election or nomination for election by the Company's
                  stockholders of each new director during such 24-month period
                  was approved by the vote of two-thirds of the directors then
                  still in office who were directors at the beginning of such
                  24-month period; or

                           (v) the Company shall file a report with the
                  Securities and Exchange Commission on Form 8-K (or any
                  successor thereto), that a change in control of or over the
                  Company has occurred.

                    (f) "Code" shall mean the Internal Revenue Code of 1986, as
           amended.


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                    (g) "Committee" shall mean either the Compensation Committee
           or a SubCommittee of such Committee duly appointed by the Board.

                    (h) "Company" shall have the meaning set forth in the
           preamble hereto.

                    (i) "Company Stock" shall mean the $.10 par value common
           stock of the Company.

                    (j) "Date of Termination" shall mean (i) if Executive's
           employment is terminated by Executive's death, the date of
           Executive's death and (ii) if Executive's employment is terminated
           pursuant to Section 6(a)(ii) - (vi) the date specified in the Notice
           of Termination.

                    (k) "Disability" shall mean the absence of Executive from
           Executive's duties to the Company on a full-time basis for a total of
           six months during any 12-month period as a result of incapacity due
           to mental or physical illness which is determined to be reasonably
           likely to extend beyond the twelve-month period and which
           determination is made by a physician selected by the Company and
           acceptable to Executive or Executive's legal representative (such
           agreement as to acceptability not to be withheld unreasonably). A
           Disability shall not be "incurred" hereunder until, at the earliest,
           the last day of the sixth month of such absence.

                    (l) "Executive" shall have the meaning set forth in the
           preamble hereto.

                    (m) "Good Reason" shall mean any of the following events
           which is not cured by the Company within 15 days after written notice
           thereof is given to the Company by Executive: (i) any reduction in
           Executive Base Salary or Target Bonus as established from time to
           time, or failure to pay Executive's Base Salary or Bonus when due to
           Executive; (ii) any other material breach by the Company of any
           material term of this Agreement; (iii) any material adverse change in
           Executive's job titles, duties, responsibilities, status, reporting
           responsibilities or perquisites granted hereunder, without
           Executive's consent; or (iv) and change in the principal location of
           Executive's employed more than 50 miles from its then-current
           location without the Executive's consent. Except as set forth in
           Section 4 hereof or as otherwise agreed in writing by the Company,
           "Good Reason" shall cease to exist for an event on the 30th day
           following the later of its occurrence or Executive's knowledge
           thereof, unless Executive has given the Company notice thereof prior
           to such date.

                    (n) "Notice of Termination" shall have the meaning set forth
           in Section 6(b).

                    (o) "Options" shall have the meaning set forth in Section
           5(c).

                    (p) "Prior Agreement" shall have the meaning set forth in
           the preamble hereto.

                    (q) "Restricted Shares" shall have the meaning set forth in
           Section 5(d).

                    (r) "Restructuring Actions" shall mean all of the following
           events: (i) the sale of some or all of the company's interest in
           Golden Telecom, Inc. (GTI) and/or


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           some or all of the Company's interest in the company's Central
           European subsidiaries (GTS Hungaro, Inc., GTS Hungary Holding, Inc.,
           GTS Poland, Inc., GTS Czech, Inc., GTS Romania, Inc. and GTS Slovakia
           s.r.o.), or their assets, for at least $150 million in total; (ii)
           the refinancing of Ebone with at least $550 million from one or a
           combination of (1) bank financing, (2) other external debt or equity
           financing, or (3) the proceeds of asset sales, including the sale of
           GTI or the Central Europe Subsidiaries to the extent those proceeds
           exceed $150 million; and (iii) the sale (to some or all of the
           holders of the publicly-traded bonds issued by Global TeleSystems
           (Europe) Ltd., or, with such bondholder's' consent, to members of the
           Company's management or to a third party) or wind-down of
           substantially all of the companies and businesses currently
           constituting the Company's "Business Services" Division.

                    (s) "Stock Option Plan" shall mean, as applicable to the
           relevant Options, the Fifth Amended and Restated 1992 Stock Option
           Plan of Global TeleSystems Group, Inc., the 2000 Stock Option Plan of
           Global TeleSystems, Inc., or any successor plans.

                    (t) "Term" shall have the meaning set forth in Section 2.

                  2. Employment Term. The Company hereby continues to employ the
Executive, and the Executive hereby accepts continued employment, under the
terms and conditions hereof, for the period (the "Term") beginning on the
effective date hereof and ending upon the Date of Termination as set forth
herein.

                  3. Position and Duties. Executive shall serve as Executive
Vice-President, General Counsel and Chief Administrative Officer of the Company,
reporting to the Chief Executive Officer, with such responsibilities, duties and
authority as are customary for such role. Executive shall devote all necessary
business time and attention, and employ Executive's reasonable best efforts,
toward the fulfillment and execution of all assigned duties, and the
satisfaction of defined annual and/or longer-term performance criteria.

                  4. Place of Performance. In connection with Executive's
employment during the Term, Executive shall be based at the Company's offices in
or near Arlington, Virginia, except for necessary travel on the Company's
business. Executive may be reassigned to another location by mutual agreement.

                  5. Compensation and Related Matters.

                    (a) Annual Base Salary. During the Term, Executive shall
           receive a base salary at a rate not less than $350,000 per annum (the
           "Annual Base Salary"), less standard deductions, paid in accordance
           with the Company's general payroll practices for executives, but no
           less frequently than monthly. The Annual Base Salary shall compensate
           Executive for any official position or directorship that Executive is
           asked to hold in the Company or its affiliates as a part of
           Executive's employment responsibilities. No less frequently than
           annually during the Term, the Committee, on advice of the Company's
           Chief Executive Officer, shall review the rate of Annual Base Salary
           payable to Executive, and may, in its discretion, increase the rate
           of Annual Base Salary payable hereunder; provided, however, that any
           increased rate shall thereafter be the rate of "Annual Base Salary"
           hereunder.

                    (b) Bonus. Except as otherwise provided for herein, for each
           fiscal quarterly compensation period (or other period consistent with
           the Company's then-applicable normal employment practices) during
           which Executive is employed


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           hereunder on the last day, Executive shall be eligible to receive a
           Bonus in an amount up to one-quarter (or other pro-rata portion as
           appropriate) of 75% of Executive's Base Salary (the "Target Bonus")
           pursuant to, and as set forth in, the terms of the GTS Senior
           Executive Bonus Plan as such Plan may be amended from time to time,
           plus such other bonus payments, if any, as shall be determined by the
           Compensation Committee in its sole discretion

                    (c) Stock Options. The Company has previously granted to
           Executive options to purchase 817,500 shares of Company Stock and, in
           connection herewith, will grant to Executive options to purchase a
           further 300,000 shares of Common Stock (all of such options,
           collectively, the "Options") pursuant to the terms of a Stock Option
           Plan and an associated Stock Option Agreement.

                    (d) Restricted Shares. The Company has granted to Executive
           3,146 Restricted Shares and, in connection herewith, will grant to
           Executive 150,000 further Restricted Shares (collectively, the
           "Restricted Shares"), which shall be subject to restrictions on their
           sale as set forth in the Company Equity Compensation Plan and an
           associated Restricted Shares Grant Letter.

                    (e) Benefits. Executive shall be entitled to receive such
           benefits and to participate in such employee group benefit plans,
           including life, health and disability insurance policies, and other
           perquisites plans, including the Company's 1999 Senior Executive
           Perquisite Plan, as are generally provided by the Company to its
           senior executives of comparable level and responsibility in
           accordance with the plans, practices and programs of the Company,
           provided that such benefits shall at least include, during the Term,
           a one million dollar ($1,000,000) death benefit life insurance policy
           on Executive life.

                    (f) Expenses. The Company shall reimburse Executive for all
           reasonable and necessary expenses incurred by Executive in connection
           with the performance of Executive's duties as an employee of the
           Company including, but not limited to, the use of a mobile telephone,
           pager, computer and associated equipment in Executive's home, a
           laptop computer, and the payment of dues for Executive's Illinois and
           D.C. Bar memberships and for Executive's membership in the American
           and International Bar Associations. Such reimbursement is subject to
           the submission to the Company by Executive of appropriate
           documentation and/or vouchers in accordance with the customary
           procedures of the Company for expense reimbursement, as such
           procedures may be revised by the Company from time to time hereafter.

                    (g) Vacations. Executive shall be entitled to paid vacation
           in accordance with the Company's vacation policy as in effect from
           time to time provided that, in no event shall Executive be entitled
           to less than four (4) weeks vacation per calendar year. Executive
           shall also be entitled to paid holidays and personal days in
           accordance with the Company's practice with respect to same as in
           effect from time to time.

                  6. Termination.

                    (a) Executive's employment hereunder may be terminated by
           the Company, on the one hand, or Executive, on the other hand, as
           applicable, without any breach of this Agreement, under the following
           circumstances:

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                           (i) Death. Executive's employment hereunder shall
                  terminate upon Executive's death.

                           (ii) Disability. If Executive has incurred a
                  Disability, the Company may give Executive written notice of
                  its intention to terminate Executive's employment. In such
                  event, Executive's employment with the Company shall terminate
                  effective on the 14th day after receipt of such notice by
                  Executive, provided that within the 14 days after such
                  receipt, Executive shall not have returned to full-time
                  performance of Executive's duties.

                           (iii) Cause. The Company may terminate Executive's
                  employment hereunder for Cause.

                           (iv) Good Reason. Executive may terminate Executive's
                  employment for Good Reason.

                           (v) Without Cause. The Company may terminate
                  Executive's employment hereunder without Cause upon 90 days
                  written notice to the Executive. The Executive may resign and
                  such resignation shall be treated as "Termination without
                  Cause" hereunder at the earlier of:

                              a.    Upon 30 days' written notice to the Company,
                                    following the completion of the
                                    Restructuring Actions; or

                              b.    Upon 90 days' written notice delivered to
                                    the Company on or after October 1, 2001.

                           (vi) Resignation without Good Reason. Executive may
                  resign Executive's employment without Good Reason upon 90 days
                  written notice to the Company.

                    (b) Notice of Termination. Any termination of Executive's
           employment by the Company or by Executive under this Section 6 (other
           than termination pursuant to Paragraph 6(a)(i)) shall be communicated
           by a written notice (the "Notice of Termination") to the other party
           hereto indicating the specific termination provision in this
           Agreement relied upon, setting forth in reasonable detail any facts
           and circumstances claimed to provide a basis for termination of
           Executive's employment under the provision so indicated, and
           specifying a Date of Termination which, except in the case of
           termination for Cause or Disability, shall be at least ninety (90)
           days following the date of such notice (the "Notice Period");
           provided that the Company may pay to Executive all Salary, benefits
           and other rights due to Executive during such Notice Period instead
           of employing Executive during such Notice Period.

                    (c) Upon Executive's Termination of employment with the
           Company for whatever reason, he shall be deemed to have effectively
           resigned from all executive, director or other positions with the
           Company or its affiliates at the time of Termination, and shall
           return all property owned by the Company and in Executive's
           possession at that time.


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                  7. Severance Payments. Other than as set forth below, no
payments or benefits shall be due to Executive in connection with a termination
of this Agreement other than Salary and Benefits earned prior to the date of
termination.

                    (a) Termination without Cause or for Good Reason or at
           Death. If Executive's employment shall be terminated by the Company
           without Cause (pursuant to Section 6(a)(v)), or by the Executive for
           Good Reason (pursuant to Section 6(a)(iv)) or in the event of Death,
           and subject to the Company's receipt of a general release in its
           customary form, the Company shall

                           (i) pay to the Executive (A) all Annual Base Salary
                  due for the period prior to the Date of Termination and the
                  prorated portion of the unpaid Bonus to which Executive would
                  otherwise be entitled for the compensation period during which
                  the termination occurred,, plus (B) an amount equal to two (2)
                  times the sum of (i) the Executive's then-current rate of
                  Annual Base Salary and (ii) the Executive's Target Bonus for
                  the entire year in which the Date of Termination occurs, as
                  set forth in the GTS Senior Executive Bonus Plan, which sum
                  shall be payable in either a lump sum cash payment as soon as
                  practicable following the Date of Termination, or, in the
                  Company's sole discretion, in installments in accordance with
                  the Company's normal payroll practices, provided that, upon a
                  Change in Control during such 24-month period, the amounts
                  payable to Executive under this Section 7(a)(i), to the extent
                  not yet paid as of such Change in Control, shall be paid to
                  him in a single lump sum cash payment at the time of such
                  Change of Control;

                           (ii) accelerate to 100% the vesting of the Options
                  referred to in Paragraph 5(c) hereof;

                           (iii) accelerate to 100% the removal of restrictions
                  on the Restricted Shares referred to in Paragraph 5(d) hereof;

                           (iv) continue to provide Executive with all employee
                  benefits and perquisites (including the Executive Perquisite
                  Program, which program shall be paid to Executive in a lump
                  sum at its remaining cash value in the event of Change of
                  Control) which Executive was participating in or receiving at
                  the time of termination of employment until the earlier of two
                  years from the Date of Termination or Executive's receipt of
                  comparable benefits from a successor employer; and

                           (v) pay the cost to the earlier of 24 months or the
                  date Executive commences employment with another company
                  (other than self-employment) of executive-level outplacement
                  services (including the use of an office and secretarial
                  support in or near Executive's residence) to a maximum of
                  $25,000 per annum;

                           (vi) allow Executive to retain possession and use, of
                  all mobile phones, pagers and home computer equipment which
                  have been allocated to him during his employment.

                           (vii) should Executive have relocated to London, then
                  relocation of family and household goods to the U.S. shall be
                  provided consistent with Company practice and shall take place
                  within six months from Date of Termination.


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                    (b) Termination by Reason of Disability. If Executive's
           employment shall terminate by reason of Executive's Disability
           (pursuant to Section 6(a)(ii) and subject to the Company's receipt of
           a general release in its customary form, the Company shall pay to
           Executive, in a lump sum cash payment as soon as practicable
           following the Date of Termination, all unpaid Base Salary due for the
           period prior to Termination, plus the prorated portion of the unpaid
           Target Bonus to which Executive would otherwise be entitled for the
           compensation period of termination and, if there is a period of time
           during which Executive is not being paid Salary and not receiving
           long-term disability insurance payments, the Committee may, in its
           discretion, determine that the Company shall make interim payments to
           Executive until commencement of disability insurance payments.

                    (c) Survival. The expiration or termination of the Term
           shall not impair the rights or obligations of any party hereto which
           shall have accrued hereunder prior to such expiration.

                  8. Parachute Payments.

                    (a) If it is determined (as hereafter provided) that by
           reason of any payment or Option vesting occurring pursuant to the
           terms of this Agreement (or otherwise under any other agreement, plan
           or program) upon a Change in Control (collectively a "Payment") the
           Executive would be subject to the excise tax imposed by Code Section
           4999 or successor provision (the "Parachute Tax"), then the Executive
           shall be entitled to receive an additional payment or payments (a
           "Gross-Up Payment") in an amount such that, after payment by the
           Executive of all taxes (including any Parachute Tax) imposed upon the
           Gross-Up Payment, the Executive retains an amount of the Gross-Up
           Payment equal to the Parachute Tax imposed upon the Payment.

                    (b) Subject to the provisions of Section 8(a) hereof, all
           determinations required to be made under this Section 8, including
           whether a Parachute Tax is payable by the Executive and the amount of
           such Parachute Tax and whether a Gross-Up Payment is required and the
           amount of such Gross-Up Payment, shall be made by the nationally
           recognized firm of certified public accountants (the "Accounting
           Firm") used by the Company prior to the Change in Control (or, if
           such Accounting Firm declines to serve, the Accounting Firm shall be
           a nationally recognized firm of certified public accountants selected
           by the Executive). The Accounting Firm shall be directed by the
           Company or the Executive to submit its preliminary determination and
           detailed supporting calculations to both the Company and the
           Executive within 15 calendar days after the determination date, if
           applicable, and any other such time or times as may be requested by
           the Company or the Executive. If the Accounting Firm determines that
           any Parachute Tax is payable by the Executive, the Company shall pay
           the required Gross-Up Payment to, or for the benefit of, the
           Executive within five business days after receipt of such
           determination and calculations. If the Accounting Firm determines
           that no Parachute Tax is payable by the Executive, it shall, at the
           same time as it makes such determination, furnish the Executive with
           an opinion that he has substantial authority not to report any
           Parachute Tax on his federal tax return. Any good faith determination
           by the Accounting Firm as to the amount of the Gross-Up Payment shall
           be binding upon the Company and the Executive absent a contrary
           determination by the Internal Revenue Service or a court of competent
           jurisdiction; provided, however, that no such determination shall
           eliminate or reduce the Company's obligation to provide any Gross-Up
           Payments that shall be due as a result


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           of such contrary determination. As a result of the uncertainty in the
           application of Code Section 4999 at the time of any determination by
           the Accounting Firm hereunder, it is possible that Gross-Up Payments
           that will not have been made by the Company should have been made (an
           "Underpayment"), consistent with the calculations required to be made
           hereunder. In the event that the Company exhausts or fails to pursue
           its remedies pursuant to Section 8(f) hereof and the Executive
           thereafter is required to make a payment of any Parachute Tax, the
           Executive shall direct the Accounting Firm to determine the amount of
           the Underpayment that has occurred and to submit its determination
           and detailed supporting calculations to both the Company and the
           Executive as promptly as possible. Any such Underpayment shall be
           promptly paid by the Company to, or for the benefit of, the Executive
           within five business days after receipt of such determination and
           calculations.

                    (c) The Company and the Executive shall each provide the
           Accounting Firm access to and copies of any books, records and
           documents in the possession of the Company or the Executive, as the
           case may be, reasonably requested by the Accounting Firm, and
           otherwise cooperate with the Accounting Firm in connection with the
           preparation and issuance of the determination contemplated by Section
           8(b) hereof.

                    (d) The federal tax returns filed by the Executive (or any
           filing made by a consolidated tax group which includes the Company)
           shall be prepared and filed on a basis consistent with the
           determination of the Accounting Firm with respect to the Parachute
           Tax payable by the Executive. The Executive shall make proper payment
           of the amount of any Parachute Tax, and at the request of the
           Company, provide to the Company true and correct copies (with any
           amendments) of his federal income tax return as filed with the
           Internal Revenue Service, and such other documents reasonably
           requested by the Company, evidencing such payment. If prior to the
           filing of the Executive's federal income tax return, the Accounting
           Firm determines in good faith that the amount of the Gross-Up Payment
           should be reduced, the Executive shall within five business days pay
           to the Company the amount of such reduction.

                    (e) The fees and expenses of the Accounting Firm for its
           services in connection with the determinations and calculations
           contemplated by Sections 8(b) and (d) hereof shall be borne by the
           Company. If such fees and expenses are initially advanced by the
           Executive, the Company shall reimburse the Executive the full amount
           of such fees and expenses within five business days after receipt
           from the Executive of a statement therefor and reasonable evidence of
           his payment thereof.

                    (f) In the event that the Internal Revenue Service claims
           that any payment or benefit received under this Agreement constitutes
           an "excess parachute payment" within the meaning of Code Section
           280G(b)(1), or successor provision, the Executive shall notify the
           Company in writing of such claim. Such notification shall be given as
           soon as practicable but not later than 10 business days after the
           Executive is informed in writing of such claim and shall apprise the
           Company of the nature of such claim and the date on which such claim
           is requested to be paid. The Executive shall not pay such claim prior
           to the expiration of the 30 day period following the date on which
           the Executive gives such notice to the Company (or such shorter
           period ending on the date that any payment of taxes with respect to
           such claim is due). If the Company notifies the Executive in writing
           prior to the expiration of such period that it desires to contest
           such claim, the Executive shall (i) give the Company any information
           reasonably requested by the Company relating to such claim; (ii) take


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           such action in connection with contesting such claim as the Company
           shall reasonably request in writing from time to time, including
           without limitation, accepting legal representation with respect to
           such claim by an attorney reasonably selected by the Company and
           reasonably satisfactory to the Executive; (iii) cooperate with the
           Company in good faith in order to effectively contest such claim; and
           (iv) permit the Company to participate in any proceedings relating to
           such claim; provided, however, that the Company shall bear and pay
           directly all costs and expenses (including, but not limited to,
           additional interest and penalties and related legal, consulting or
           other similar fees) incurred in connection with such contest and
           shall indemnify and hold the Executive harmless, on an after-tax
           basis, for and against for any Parachute Tax or income tax or other
           tax (including interest and penalties with respect thereto) imposed
           as a result of such representation and payment of costs and expenses.

                    (g) The Company shall control all proceedings taken in
           connection with such contest and, at its sole option, may pursue or
           forgo any and all administrative appeals, proceedings, hearings and
           conferences with the taxing authority in respect of such claim and
           may, at its sole option, either direct the Executive to pay the tax
           claimed and sue for a refund or contest the claim in any permissible
           manner and the Executive agrees to prosecute such contest to a
           determination before any administrative tribunal, in a court of
           initial jurisdiction and in one or more appellate courts, as the
           Company shall determine; provided, however, that if the Company
           directs the Executive to pay such claim and sue for a refund, the
           Company shall advance the amount of such payment to the Executive on
           an interest-free basis, and shall indemnify and hold the Executive
           harmless, on an after tax basis, from any Parachute Tax (or other tax
           including interest and penalties with respect thereto) imposed with
           respect to such advance or with respect to any imputed income with
           respect to such advance; and provided, further, that if the Executive
           is required to extend the statue of limitations to enable the Company
           to contest such claim, the Executive may limit this extension solely
           to such contested amount. The Company's control of the contest shall
           be limited to issues with respect to which a corporate deduction
           would be disallowed pursuant to Code Section 280G or successor
           provision, and the Executive shall be entitled to settle or contest,
           as the case may be, any other issue raised by the Internal Revenue
           Service or any other taxing authority. In addition, no position may
           be taken nor any final resolution be agreed to by the Company without
           the Executive's consent if such position or resolution could
           reasonably be expected to adversely affect the Executive unrelated to
           matters covered hereto.

                    (h) If, after the receipt by Executive of an amount advanced
           by the Company in connection with the contest of the Parachute Tax
           claim, the Executive receives any refund with respect to such claim,
           the Executive shall promptly pay to the Company the amount of such
           refund (together with any interest paid or credited thereon after
           taxes applicable thereto); provided, however, if the amount of that
           refund exceeds the amount advanced by the Company the Executive may
           retain such excess. If, after the receipt by the Executive of an
           amount advanced by the Company in connection with a Parachute Tax
           claim, a determination is made that the Executive shall not be
           entitled to any refund with respect to such claim and the Company
           does not notify the Executive in writing of its intent to contest the
           denial of such refund prior to the expiration of 30 days after such
           determination such advance shall be deemed to be in consideration for
           services rendered after the Date of Termination.


<PAGE>   11


                  9. Competition.

                    (a) Executive shall not, at any time during the Term, or (i)
           for a period of twelve (12) months thereafter, without the prior
           written consent of the Board, directly or indirectly through any
           other person or entity:

                           (i) own, acquire in any manner any ownership interest
                  in (except as purely passive investments amounting to no more
                  than five percent of the voting equity), or serve as a
                  director, officer, employee, counsel or consultant of any
                  person, firm, partnership, corporation, consortia, association
                  or other entity that competes with the Company or any of its
                  affiliates or subsidiaries, in any European geographic market
                  in which the Company either (A) offers or provides broadband
                  telecommunications (which term hereafter shall be deemed to
                  include data or internet communications) services to
                  customers; (B) operates or manages a provider of
                  telecommunications services; (C) has material investments in a
                  provider of telecommunications services; or (D), to
                  Executive's knowledge, has plans to either operate a
                  telecommunications carrier, offer a telecommunications
                  service, or invest in a telecommunications carrier within the
                  next twelve months,

                           (ii) solicit, entice, persuade or induce any
                  individual who currently is, or at any time during the
                  preceding twelve months shall have been, an officer, director
                  or employee of the Company, or any of its affiliates, to
                  terminate or refrain from renewing or extending such person's
                  employment with the Company or such subsidiary or affiliate,
                  or to become employed by or enter into contractual relations
                  with or consultant for any other individual or entity, and
                  Executive shall not approach any such employee for any such
                  purpose or authorize or knowingly cooperate with the taking of
                  any such actions by any other individual or entity, or

                           (iii) except in accordance with Executive's duties on
                  behalf of the Company, solicit, entice, persuade, or induce
                  any individual or entity which currently is, or at any time
                  during the preceding twelve months shall have been, a
                  customer, consultant, vendor, supplier, lessor or lessee of
                  the Company, or any of its subsidiaries or affiliates, to
                  terminate or refrain from renewing or extending its
                  contractual or other relationship with the Company or such
                  subsidiary or affiliate, and Executive shall not approach any
                  such customer, vendor, supplier, consultant, lessor or lessee
                  for such purpose or authorize or knowingly cooperate with the
                  taking of any such actions by any other individual or entity.

                    (b) Executive shall not at any time:

                           (i) other than when required in the ordinary course
                  of business of the Company, disclose, directly or indirectly,
                  to any person, firm, corporation, partnership, association or
                  other entity, any trade secret, or confidential information
                  concerning the financial condition, suppliers, vendors,
                  customers, lessors, or lessees, sources or leads for, and
                  methods of obtaining, new business, or the methods generally
                  of doing and operating the respective businesses of the
                  Company or its affiliates and subsidiaries to the degree such
                  secret or information incorporates information that is
                  proprietary to, or was developed specifically by or for, the
                  Company, except such information that is a matter of public
                  knowledge, was provided to Executive (without breach of any
                  obligation of confidence owed to the Company) by a third party
                  which is not an affiliate of the Company, or is required to be
                  disclosed by law or judicial or administrative process, or


<PAGE>   12


                           (ii) make any oral or written statement about the
                  Company and/or its financial status, business, compliance with
                  laws, personnel, directors, officers, consultants, services,
                  business methods or otherwise, which is intended or reasonably
                  likely to disparage the Company or otherwise degrade its
                  reputation in the business or legal community in which it
                  operates or in the telecommunications industry;

                  provided that nothing in this Section 9(b) shall be construed
                  so as to prevent Executive from using, in connection with his
                  employment for himself or an employer other than the Company,
                  knowledge that was acquired by him during the course of his
                  employment with the Company and which is generally known to
                  persons of his experience in other companies in the same
                  industry;

                    (c) Executive hereby represents that (i) Executive is not
           restricted in any material way from performing Executive's duties
           hereunder as the result of any contract, agreement or law; and (ii)
           Executive's due performance of Executive's duties hereunder does not
           and will not violate the terms of any agreement to which Executive is
           bound.

                    (d) In the event any agreement in Section 9 hereof shall be
           determined by any court of competent jurisdiction to be unenforceable
           by reason of its extending for too great a period of time or over too
           great a geographical area or by reason of its being too extensive in
           any other respect, it will be interpreted to extend only over the
           maximum period of time for which it may be enforceable, and/or over
           the maximum geographical area as to which it may be enforceable
           and/or to the maximum extent in all other respects as to which it may
           be enforceable, all as determined by such court in such action.

                  10. Injunctive Relief. It is recognized and acknowledged by
Executive that a breach of the covenants contained in Section 9 hereof will
cause irreparable damage to the Company and its goodwill, the exact amount of
which will be difficult or impossible to ascertain, and that the remedies at law
for any such breach will be inadequate. Accordingly, Executive agrees that in
the event of a breach of any of the covenants contained in Section 9 hereof, in
addition to any other remedy which may be available at law or in equity, the
Company will be entitled to specific performance and injunctive relief.

                  11. Mutual Non-Disparagement. Neither the Company nor
Executive shall make any oral or written statement about the other party which
is intended or reasonably likely to disparage the other party, or otherwise
degrade the other party's reputation in the business or legal community or in
the telecommunications industry.

                  12. Foreign Corrupt Practices Act. Executive agrees to comply
in all material respects with the applicable provisions of the U.S. Foreign
Corrupt Practices Act of 1977 ("CPA"), as amended, which provides generally
that: under no circumstances will foreign officials, representatives, political
parties or holders of public offices be offered, promised or paid any money,
remuneration, things of value, or provided any other benefit, direct or
indirect, in connection with obtaining or maintaining contracts or orders
hereunder. When any representative, employee, agent, or other individual or
organization associated with Executive is required to perform any obligation
related to or in connection with this Agreement, the substance of this section
shall be imposed upon such person and included in any agreement between
Executive and any such person. Failure by Executive to comply with the
provisions of the CPA shall constitute a material breach of this Agreement and
shall entitle the Company to terminate Executive's employment for Cause.
Additionally,


<PAGE>   13


Executive hereby acknowledges that as a condition for the Company to continue
this Agreement, Executive has executed an acknowledgment that Executive has read
"An Explanation of the Foreign Corrupt Practices Act" and "Global TeleSystems
Group, Inc. Policy on Foreign Transactions," copies of which have been provided
to Executive. Executive also acknowledges that a condition precedent to the
effectiveness of this Agreement is the execution by Executive of the "Addendum
to the Global TeleSystems Group, Inc. Policy on Foreign Transaction," a copy of
which has been provided to Executive. Additionally, and as a condition for the
Company to continue this Agreement, Executive shall be required from time to
time at the request of the Company to execute a certificate of Executive's
compliance with the aforementioned laws and regulations.

                  13. Purchases and Sales of the Company's Securities. Executive
has read and agrees to comply in all respects with the Company's Policy
Regarding the Purchase and Sale of the Company's Securities by Employees, as
such Policy may be amended from time to time. Specifically, and without
limitation, Executive agrees that Executive shall not purchase or sell stock in
the Company at any time (a) that Executive possesses material non-public
information about the Company or any of its businesses; and (b) during any
"Trading Blackout Period" as may be determined by the Company as set forth in
the Policy from time to time.

                  14. Indemnification. Executive shall be entitled to
indemnification set forth in the Company's Certificate of Incorporation to the
maximum extent allowed under the laws of the Commonwealth of Virginia and the
State of Delaware Corporations Act, and Executive shall be entitled to all
protection of and coverage under any insurance policies the Company may elect to
maintain generally for the benefit of its directors and officers against all
costs, charges and expenses incurred or sustained by Executive in connection
with any action, suit or proceeding to which Executive may be made a party by
reason of Executive's being or having been a director, officer or employee of
the Company or any of its subsidiaries or Executive's serving or having served
any other enterprise as a director, officer or employee at the request of the
Company (other than any dispute, claim or controversy arising under or relating
to this Agreement).

                  15. Notices. Any written notice required by this Agreement
will be deemed provided and delivered to the intended recipient when (a)
delivered in person by hand; or (b) three days after being sent via U.S.
certified mail, return receipt requested; or (c) the day after being sent via by
overnight courier, in each case when such notice is properly addressed to the
following address and with all postage and similar fees having been paid in
advance:

         If to the Company:      Global TeleSystems, Inc.
                                 Attn.: Chief Executive Officer
                                 151 Shaftesbury Avenue
                                 London, England  WC2H 8AL


         If to Executive:        Grier C. Raclin


Either party may change the address to which notices, requests, demands and
other communications to such party shall be delivered personally or mailed by
giving written notice to the other party in the manner described above.


<PAGE>   14


                  16. Binding Effect. This Agreement shall be for the benefit of
and binding upon the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and, where applicable,
assigns.

                  17. Entire Agreement. This Agreement constitutes the entire
agreement between the listed parties with respect to the subject matter
described in this Agreement and supersedes all prior agreements, understandings
and arrangements, both oral and written, between the parties with respect to
such subject matter including, but not limited to, the Prior Agreement. This
Agreement may not be modified, amended, altered or rescinded in any manner,
except by written instrument signed by both of the parties hereto; provided,
however, that the waiver by either party of a breach or compliance with any
provision of this Agreement shall not operate nor be construed as a waiver of
any subsequent breach or compliance.

                  18. Severability. In case any one or more of the provisions of
this Agreement shall be held by any court of competent jurisdiction or any
arbitrator selected in accordance with the terms hereof to be illegal, invalid
or unenforceable in any respect, such provision shall have no force and effect,
but such holding shall not affect the legality, validity or enforceability of
any other provision of this Agreement provided that the provisions held illegal,
invalid or unenforceable does not reflect or manifest a fundamental benefit
bargained for by a party hereto.

                  19. Dispute Resolution and Arbitration. In the event that any
dispute arises between the Company and Executive regarding or relating to this
Agreement and/or any aspect of Executive's employment relationship with the
Company, AND IN LIEU OF LITIGATION AND A TRIAL BY JURY, the parties consent to
resolve such dispute through mandatory arbitration under the Commercial Rules of
the American Arbitration Association ("AAA"), before a single arbitrator in
Arlington, Virginia. The parties hereby consent to the entry of judgment upon
award rendered by the arbitrator in any court of competent jurisdiction.
Notwithstanding the foregoing, however, should adequate grounds exist for
seeking immediate injunctive or immediate equitable relief, any party may seek
and obtain such relief; provided that, upon obtaining such relief, such
injunctive or equitable action shall be stayed pending the resolution of the
arbitration proceedings called for herein. The parties hereby consent to the
exclusive jurisdiction in the state and Federal courts of or in the Commonwealth
of Virginia for purposes of seeking such injunctive or equitable relief as set
forth above. Any and all out-of-pocket costs and expenses incurred by the
parties in connection with such arbitration (including attorneys' fees) shall be
allocated by the arbitrator in substantial conformance with his or her decision
on the merits of the arbitration; provided, however, that in no event shall
Executive be required to pay attorneys' fees in an amount that exceeds the
amount incurred by Executive for Executive's attorneys' fees.

                  20. Choice of Law. Executive and the Company intend and hereby
acknowledge that jurisdiction over disputes with regard to this Agreement, and
over all aspects of the relationship between the parties hereto, shall be
governed by the laws of the Commonwealth of Virginia without giving effect to
its rules governing conflicts of laws.

                  21. Section Headings. The section headings contained in this
Agreement are for reference purposes only and shall not affect in any manner the
meaning or interpretation of this Agreement.

                  22. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
taken together shall constitute one and the same instrument.


<PAGE>   15


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

                                   GLOBAL TELESYSTEMS, INC.


                                   By:
                                      ------------------------------------------
                                   Name:   Robert J. Amman
                                   Title:  Chairman, CEO and President


                                   EXECUTIVE


                                   ---------------------------------------------
                                   Grier C. Raclin



                                   Agreed and Acknowledged:


                                   ---------------------------------------------
                                   Name:   Adam Solomon
                                   Title:  Chairman, Senior Executive
                                           Compensation Committee of Board