AMENDED AND RESTATED EMPLOYMENT AGREEMENT
                 -----------------------------------------

     This AMENDED AND RESTATED  AGREEMENT is made as of July 19, 1996,  and
amended  as of May 16,  1997 and  July  18,  1997,  by and  between  COMSAT
Corporation  ("COMSAT"),  a District of Columbia corporation,  and Betty C.
Alewine, a resident of the Commonwealth of Virginia (the "Executive").

     WHEREAS,  the COMSAT  Board of  Directors  (the  "Board")  elected the
Executive  as  President  and Chief  Executive  Officer and a member of the
Board (a "Director") on July 19, 1996;

     WHEREAS,  the Board  believes it to be in the best interests of COMSAT
to enter into this Agreement to ensure the Executive's  continuing services
to COMSAT; and

     WHEREAS,  COMSAT  desires  to  continue  to employ  the  Executive  as
President and Chief Executive Officer of COMSAT,  and the Executive desires
to continue such employment, on the terms and conditions set forth herein;

     NOW,  THEREFORE,  in  consideration  of the  premises  and the  mutual
agreements  made herein,  and intending to be legally bound hereby,  COMSAT
and the Executive agree as follows:

     1.   EMPLOYMENT; DUTIES.
          ------------------

          (a)  EMPLOYMENT AND  EMPLOYMENT  PERIOD.  COMSAT shall employ the
Executive to serve as President  and Chief  Executive  Officer of COMSAT or
any successor entity for a period (the "Employment  Period")  commencing on
July  19,  1996  (the  "Effective  Date")  and  continuing  thereafter  for
successive  three-year terms from each successive day thereafter until July
19,  2003 unless  terminated  in  accordance  with the  provisions  of this
Agreement. Notwithstanding the foregoing, COMSAT may appoint another person
to serve as President  during the  Employment  Period.  In that event,  the
Executive's  title shall become Chief  Executive  Officer and the President
shall report to the Executive in her capacity as Chief  Executive  Officer.
The  appointment  of a President  shall not be deemed to  constitute  "Good
Reason" for purposes of Section 5 of this  Agreement.  Each 12-month period
ending on the anniversary date of the Effective Date is sometimes  referred
to herein as a "year of the Employment Period."

          (b) OFFICES,  DUTIES AND  RESPONSIBILITIES.  The Executive  shall
report directly and solely to the Board.  Throughout the Employment Period,
COMSAT shall cause Executive to



<PAGE>



be nominated and  recommended for election as a Director at each meeting of
COMSAT shareholders at which directors are to be elected and to be included
as a recommended nominee for election in any proxy provided to shareholders
in connection with such meeting. The Executive's offices initially shall be
located  at  COMSAT's  present  headquarters  in  Bethesda,  Maryland.  The
Executive shall have all duties and authority  customarily accorded a chief
executive officer,  including,  without limitation, the lead responsibility
with full autonomy, subject to the customary authority and direction of the
Board,  to manage the  overall  business  and  operations  of  COMSAT.  All
employees of COMSAT shall report, directly or indirectly, to the Executive,
and the  Executive  shall  have  the  authority  to hire  and fire all such
employees within  established  budget  parameters,  PROVIDED that the Board
shall  approve (i) any salary  actions  (including  hiring  decisions)  for
employees  of COMSAT  which  result  in an  annual  salary in excess of the
amount established by the Board from time to time, bu in no event less than
$100,000,  and (ii) any bonuses to be awarded to  employees of COMSAT under
the COMSAT  Annual  Incentive  Plan (the "AIP") or any other  bonuses to be
awarded in excess of the amount established by the Board from time to time.
The  Executive's  management of COMSAT shall be (x) in accordance  with the
policies of the Board and  COMSAT's  Policies  and  Procedures,  both as in
effect from time to time, and (y) within the limits of an annual budget for
COMSAT  which  shall be  approved  by the Board a least 30 days  before the
beginning of the fiscal year to which such budget relates. If the Executive
proposes the expenditure of any amounts which exceed the applicable  annual
budgets  for  COMSAT,  such  excess  amounts  shall  not  be  committed  to
Executive's authority unless and until specifically authorized and approved
by the Board.

          (c)  DEVOTION  TO  INTERESTS  OF COMSAT.  During  the  Employment
Period,  the Executive shall devote her best efforts and full business time
and attention to the performance of her duties  hereunder.  Notwithstanding
the  foregoing,  the Executive  shall be entitled to serve on the boards of
directors  of  non-profit  organizations  and,  commencing  on  the  second
anniversary  of the Effective  Date,  the boards of directors of for-profit
organizations  that do not compete with COMSAT.  Prior to joinin any boards
of  directors  in  addition  to  those on which  she is  serving  as of the
Effective  Date, the Executive shall consult with the Board to confirm that
such memberships  shall not  unreasonably or materially  interfere with the
performance of her duties hereunder.  In addition,  the Executive may speak
and write  independently,  if such activity does not conflict with the best
interests of COMSAT.  The Executive may keep all fees and other monies paid
for such outside board memberships and activities in accordance with COMSAT
corporate policy.

     2.   COMPENSATION AND FRINGE BENEFITS.
          --------------------------------

          (a) BASE  COMPENSATION.  COMSAT  shall pay the  Executive  a base
salary ("Base Salary")  during the Employment  Period with payments made in
installments in accordance with COMSAT's  regular practice for compensating
executive personnel,  PROVIDED that in no event shall such payments be made
less frequently than twice per month. The Base Salary for the first year of

                                    -2-

<PAGE>


the  Employment  Period shall be $450,000.  Effective on July 19, 1997, the
Base Salary shall be increased to $500,000. Thereafter, the Base Salary for
the Executive  shall be reviewed for increases each  subsequent year during
the Employment Period  commencing the third year of the Employment  Period.
Any  further  Base Salary  increases  shall be approved by the Board in its
sole discretion.

          (b) BONUS COMPENSATION. The Executive will be eligible to receive
bonuses  ("Annual  Bonus")  during the  Employment  Period under the AIP in
accordance  with the  following  parameters:  (i) the target bonus for each
year during the Employment Period shall be 70% of Base Salary for achieving
100% of the  target  level  for the  performance  measures;  and  (ii)  the
performance  measures,  the relative weight to be accorded each performance
measure and the amount of bonus payable in relation to the target bonus for
achieving  more or less than 100% of the target  level for the  performance
measures shall be determined for each year during the Employment  Period by
the Committee on Compensation and Management  Development of the Board (the
"Compensation Committee") after consultation with the Executive. As part of
the consultation process set forth in the preceding sentence, the Executive
shall  prepare  before  the end of  each  fiscal  year  ending  during  the
Employment  Period a business  plan for COMSAT with respect to at least the
following  three-year  period.  The Board shall  consider  and approve such
plans on an annual basis,  subject to such  modifications  as are otherwise
consistent with this Agreement, and each fiscal year the current plan shall
be considered by the  Compensation  Committee as the basis for establishing
the bonus standards for such year with such reasonable modifications as the
Compensation  Committee may  reasonably  determine and which are consistent
with this Agreement.

          (c) FRINGE BENEFITS.  The Executive shall continue to be entitled
to the fringe  benefits  for COMSAT  senior  executives  which she  enjoyed
immediately prior to the Effective Date, including (i) participation in the
COMSAT  Directors and  Executives  Deferred  Compensation  Plan, the COMSAT
Split Dollar  Insurance  Plan, the COMSAT  Educational  Grant Program,  the
COMSAT  Retirement  Plan, the COMSAT Savings and  Profit-Sharing  Plan, the
COMSAT 1995 Key Employee Stock Plan (the "Stock Plan"), the COMSAT Employee
Stock Purchase Plan,  the COMSAT health and disability  insurance  programs
and  the  COMSAT  financial  planning  program,  (ii)  an  annual  physical
examination  by  a  physician  of  her  choice  in  the  Washington,   D.C.
metropolitan  area  at  COMSAT's  expense,   and  (iii)   reimbursement  of
reasonable  expenses  incurred in connection with travel and  entertainment
related to COMSAT's  business  and  affairs.  The  Executive  also shall be
entitled to such additional fringe benefits as are made available to COMSAT
senior  executives  during the Employment  Period on a most favored nations
basis.  The  Executive  further shall be entitled to  reimbursement  of the
Executive's reasonable legal fees and costs incurred in connection with the

                                    -3-

<PAGE>

negotiation and execution of this  Agreement,  subject to a cap of $12,000.
COMSAT  reserves  the right to modify  or  terminate  from time to time the
fringe benefits provided to the senior management group.

          (d) STOCK OPTIONS. On October 17, 1996 (the "Grant Date"), COMSAT
shall grant to the Executive  non-statutory  stock options (the  "Options")
under the Stock Plan to purchase  150,000 shares of COMSAT's  common stock,
without  par value  ("Common  Stock"),  at a  purchase  price  equal to the
average of the high and low selling  price of the Common  Stock as reported
under New York Stock Exchange-Composite Transactions on the Grant Date. The
Options  shall  carry a term of ten years and shall be  exercisable  by the
Executive in accordance with the following schedule: (i) 25% of the Options
on and after the first  anniversary  of the Grant Date;  (ii) an additional
25% of the Options on and after the second  anniversary  of the Grant Date;
and  (iii)  the  remaining  50%  of the  Options  on and  after  the  third
anniversary  of the Grant Date. The Options shall be represented by a stock
option agreement in the form customarily used by COMSAT for such agreements
which shall contain  appropriate  terms  consistent  with the provisions of
this Agreement.  During the Employment Period, the Executive may be granted
additional  non-statutory  stock options as determined by the  Compensation
Committee in its sole discretion.

          (e)  RSAS.  On  February  20,  1997,  COMSAT  shall  grant to the
Executive  20,000  Restricted  Stock Awards  ("RSAs") under the Stock Plan.
Such RSAs shall vest in accordance with (i) the  performance  standards for
the  two-year  performance  period  following  the date of grant  which are
adopted by the  Compensation  Committee for RSAs granted  generally on such
date,  and (ii) the following  schedule  thereafter for the portion of such
RSAs  which are  earned  during  the  performance  period:  (x) 20% of such
portion on and after  February  20,  2000;  (y) an  additional  40% of such
portion on and after  February 20, 2001;  and (z) the remaining 40% of such
portion on and after February 20, 2002.

          (f) RSUS. On the Grant Date,  COMSAT shall grant to the Executive
5,000 Restricted Stock Units ("RSUs") under the Stock Plan. Such RSUs shall
entitle the Executive to receive  "dividend  equivalents"  (when and in the
same amounts as dividends are paid on the Common  Stock) as provided  under
the Stock  Plan,  and shall vest three (3) years from the Grant Date if the
Executive is still employed by COMSAT at such time.

          (g) SERP.  The Executive  shall  continue to  participate  in the
COMSAT  Insurance and  Retirement  Plan for  Executives  (the "SERP").  Any
future  amendments  or changes to the SERP which  provide for a  reduction,
deferral or elimination  of benefits  payable to  participants  in the SERP
shall  expressly not apply to the Executive  unless the Executive  consents
otherwise.

                                    -4-

<PAGE>

     3.   TRADE SECRETS; RETURN OF DOCUMENTS AND PROPERTY.
          -----------------------------------------------

          (a)  Executive   acknowledges  that  during  the  course  of  her
employment  she  will  receive   secret,   confidential   and   proprietary
information  ("Trade  Secrets") of COMSAT and of other companies with which
COMSAT does business on a confidential basis and that Executive will create
and develop  Trade  Secrets for the benefit of COMSAT.  Trade Secrets shall
include,  without  limitation,  matters  of a  technical  nature,  such  as
scientific and engineering secrets,  "know-how," formulae,  secret processe
or machines,  inventions and computer programs (including  documentation of
such programs), and matters of a business nature, such as customer data and
proprietary  information about costs, profits,  markets, sales and customer
databases,  and other  information  of a similar  nature to the  extent not
available  to the  public,  and plans  for  future  development.  All Trade
Secrets  disclosed  to or  created by  Executive  shall be deemed to be the
exclusive  property  of COMSAT  (as the  context  may  require).  Executive
acknowledges  that Trade Secrets have  economic  value to COMSAT due to the
fact that Trade Secrets are not generally  known to the public or the trade
and that the  unauthorized  use or disclosure of Trade Secrets is likely to
be detrimental to the interests of COMSAT and its  subsidiaries.  Executive
therefore  agrees to hold in strict  confidence  and not to disclose to any
third party any Trade Secret  acquired or created or developed by Executive
during  the  term of this  Agreement  except  (i)  when  Executive  uses or
discloses  any  Trade  Secret  in the  proper  course  of  the  Executive's
rendition  of services  to COMSAT  hereunder,  (ii) when such Trade  Secret
becomes public knowledge other than through a breach of this Agreement,  or
(iii) when  Executive is required to disclose any Trade Secret  pursuant to
any valid legal process.  The Executive shall notify COMSAT  immediately of
any such  legal  process in order to enable  COMSAT to  contest  such legal
process's  validity.  After  termination of this  Agreement,  the Executive
shall not use or otherwise  disclose Trade Secrets unless such  information
(x) becomes public knowledge other than through a breach of this Agreement,
(y) is  disclosed  to the  Executive  by a third  party who is  entitled to
receive and disclose such Trade Secret,  or (z) is required to be disclosed
pursuant  to any valid legal  process,  in which case the  Executive  shall
notify  COMSAT  immediately  of any such  legal  process in order to enable
COMSAT to contest such legal process's validity.

          (b) Upon the  effective  date of  notice  of the  Executive's  or
COMSAT's  election to  terminate  this  Agreement,  or at any time upon the
request of COMSAT, the Executive (or her heirs or personal representatives)
shall  deliver to COMSAT (i) all  documents  and  materials  containing  or
otherwise  relating  to Trade  Secrets  or other  information  relating  to
COMSAT's business and affairs, and (ii) all documents,  materials and other
property belonging to COMSAT, which in either case are in the possession or
under  the   control   of  the   Executive   (or  her  heirs  or   personal
representatives).  The  Executive  shall be entitled  to keep her  personal
records  (including  Rolodex)  relating  to COMSAT's  business  and affairs

                                    -6-

<PAGE>

except to the extent those  contain  documents  or  materials  described in
clause (i) of the preceding sentence.

     4.   DISCOVERIES  AND  WORKS.   All  discoveries  and  works  made  or
conceived by the Executive during her employment by COMSAT pursuant to this
Agreement,  jointly or with  others,  that  relate to  COMSAT's  activities
("Discoveries  and Works") shall be owned by COMSAT.  Discoveries and Works
shall include, without limitation, inventions, computer programs (including
documentation  of  such  programs),   technical  improvements,   processes,
drawings and works of authorship.  The Executive shall (a) promptly notify,
make full  disclosure  to, and execute and deliver any documents  requested
by, COMSAT to evidence or better assure title to such Discoveries and Works
in COMSAT,  (b) assist COMSAT in obtaining or maintaining for itself at its
own expense  United States and foreign  patents,  copyrights,  trade secret
protection or other  protection of any and all such  Discoveries and Works,
and (c)  promptly  execute,  whether  during  her  employment  by COMSAT or
thereafter, all applications or other endorsements necessary or appropriate
to maintain  patents and other rights for COMSAT and to protect their title
thereto.  Any  Discoveries  and Works  which,  within six months  after the
termination of the Executive's  employment by COMSAT, are made,  disclosed,
reduced to a tangible  or written  form or  description,  or are reduced to
practice  by the  Executive  and which  pertain  to work  performed  by the
Executive while with COMSAT shall, as between the Executive and COMSAT,  be
presumed to have been made during the Executive's employment b COMSAT.

     5.   TERMINATION.  This  Agreement  shall remain in effect  during the
Employment  Period,  and this  Agreement and  Executive's  employment  with
COMSAT may be terminated only as follows:

          (a) By the  Executive  at any  time  upon  forty-five  (45)  days
advance written notice to COMSAT for "Good Reason" (as defined  below).  In
such event or if the Executive's employment is terminated by COMSAT without
"cause" (as defined below),  the Executive shall be entitled to receive the
following  benefits  until the  earlier  of (i)  three  (3) years  from the
effective date of such termination,  or (ii) the later of (A) July 19, 2003
or (B) one year from such effective date: (i) her then current Base Salary;
(ii) an Annual  Bonus equal to seventy  percent  (70%) of her then  current
Base Salary;  and (iii) all other  benefits  provided  pursuant to Sections
2(c),  (d),  (e), (f) and (g) of this  Agreement,  which shall be deemed to
vest fully and immediately if subject to vesting.  The Executive shall have
no  obligation  to seek other  employment  in the event of her  termination
pursuant to this paragraph (a), and any such employment  shall not mitigate
COMSAT's obligations hereunder.

          "Good  Reason"  shall  mean  any  of  the   following:   (I)  any
substantial  reduction  (except in connection  with the  termination of her
employment voluntarily by the Executive or by COMSAT for "cause" as defined
below) by COMSAT,  without the Executive's  express written consent, of her

                                    -6-

<PAGE>

responsibilities  as President and Chief Executive Officer of COMSAT;  (II)
any change in the  reporting  structure  set forth in Section  1(b)  above;
(III) any  reduction  in  Executive's  title;  (IV) any  relocation  of the
Executive's  offices  outside the  Washington,  D.C.  metropolitan  area by
COMSAT without the  Executive's  express written consent prior to the third
anniversary  of  the  Effective  Date;  (V)  any  material  default  of the
provisions of Section 2 of this Agreement  which  continues for twenty (20)
business  days  following  COMSAT's  receipt  of  written  notice  from the
Executive  specifying  the  manner in which  COMSAT is in  default  of such
provisions;  (VI) the  Executive is not reelected to or is removed from the
Board;  or (VII) any officer  superior to the  Executive  is  appointed  by
COMSAT.

          (b) By COMSAT at any time  upon ten (10) days  written  notice to
the  Executive,  and after an opportunity to discuss such decision with the
Board,  for  "cause."  For  purposes of this  Agreement,  COMSAT shall have
"cause" to terminate  the  Executive's  employment  hereunder  upon (i) the
continued and  deliberate  failure of the Executive to perform her material
duties,  in a manner  substantially  consistent with the manner  reasonably
prescribed by the Board and in accordance  with the terms of this Agreement
(other than any such failure  resulting from her incapacity due to physical
or mental illness),  which failure  continues for twenty (20) business days
following  the  Executive's  receipt  of  written  notice  from  the  Board
specifying  the manner in which the  Executive is in default of her duties,
(ii) the engaging by the Executive in intentional  serious  misconduct that
is materially and demonstrably injurious to COMSAT or its reputation, which
misconduct, if it is reasonably capable of being cured, is not cured by the
Executive  within  twenty (20)  business  days  following  the  Executive's
receipt of written notice from the Board specifying the serious  misconduct
engaged in by the  Executive,  (iii) the  conviction  of the  Executive  of
commission of a felony involving a crime of moral turpitude, whether or not
such felony was committed in connection with COMSAT's business, or (iv) any
material breach by the Executive of Section 8 hereof,  which breach,  if it
is reasonably  capable of being cured, is not cured by the Executive within
twenty (20) business  days  following  the  Executive's  receipt of written
notice from the Board  specifying the breach of Section 8 by the Executive.
If COMSAT shall terminate the Executive's  employment for "cause,"  COMSAT,
in full  satisfaction of all of COMSAT's  obligations  under this Agreement
and in  respect  of the  termination  of the  Executive's  employment  with
COMSAT, shall pay the Executive her Base Salary and all other compensation,
benefits  and  reimbursement   through  the  date  of  termination  of  her
employment.

                                    -7-

<PAGE>


          (c) If, prior to the  expiration or termination of the Employment
Period,  the Executive shall have been unable to perform  substantially her
duties by reason of  disability  or  impairment  of health for at least six
consecutive calendar months,  COMSAT shall have the right to terminate this
Agreement by giving sixty (60) days written notice to the Executive to that
effect,  but only if at the time such  notice is given such  disability  or
impairment  is still  continuing.  Following  the  expiration of the notice
period,  the  Employment  Period  shall  terminate  with the payment of the
Executive's  Base  Salary  for the  month in which  notice  is given  and a
prorated  Annual Bonus through such month.  In the event of a dispute as to
whether the Executive is disabled within the meaning of this paragraph (a),
or the  duration  of any  disability,  either  party may  request a medical
examination of the Executive by a doctor appointed by the Chief of Staff of
a hospital  selected by mutual agreement of the parties,  or as the parties
may otherwise  agree,  and the written medical opinion of such doctor shall
be conclusive  and binding upon the parties as to whether the Executive has
become  disabled and the date when such disability  arose.  The cost of any
such medical  examinations shall be borne by COMSAT. In no event shall this
Agreement  terminate before COMSAT's  long-term  disability  benefits under
applicable plans become payable to the Executive.

          (d) If, prior to the  expiration or termination of the Employment
Period, the Executive shall die, COMSAT shall pay to the Executive's estate
her Base Salary and a prorated Annual Bonus through the end of the month in
which the Executive's  death occurred,  at which time the Employment Period
shall terminate without further notice.

          (e) If either  the  Executive  or COMSAT  elects not to renew the
Executive's employment with COMSAT at the end of the Employment Period, the
Executive shall be entitled to receive payments under the SERP beginning on
August 1, 2003,  the first day of the month  after the end of such  period,
calculated  in  accordance  with the  provisions  of the plan  based on the
Executive's  retirement on that date,  PROVIDED that the Board reserves the
discretion to waive the applicable  early  retirement  reduction  under the
plan in such event.  If the  Executive's  employment with COMSAT under this
Agreement  is  terminated  either by the  Executive  for Good  Reason or by
COMSAT without "cause," the Executive shall be entitled to receive payments
under the SERP  beginning on June 1, 2003, the first day of the month after
the Executive's 55th birthday, calculated in accordance with the provisions
of the plan as if the  Executive  retired on that date,  PROVIDED  that the
Board  reserves the  discretion to waive the  applicable  early  retirement
reduction under the plan in such event.

     6.   CHANGE OF CONTROL.

          (a) In the event that the Board in its sole discretion determines
that repeal of the ownership  restrictions  on COMSAT  capital stock in the

                                    -8-


Communications  Satellite Act of 1962 is reasonably  imminent,  the parties
shall  negotiate  in good  faith to adopt a "change of  control"  provision
applicable  to this  Agreement  which  shall set forth (i) the events  that
shall  constitute  a  "change  of  control"  for  this  purpose,  (ii)  the
consequences  under this Agreement if such a "change of control" occurs and
(iii) such other terms and  conditions as the parties shall  mutually agree
to.

          (b)  Any  "change  of  control"   provisions  adopted  by  COMSAT
applicable to any COMSAT  benefits plans which provide for the  accelerated
vesting  and/or  payment of any  benefits for its senior  executives  shall
apply to the Executive to the same extent as other COMSAT senior executives
on a most favored  nations  basis with respect to the benefits  affected by
such COMSAT provisions.

          (c) If a change of control (as  defined for  purposes of COMSAT's
benefit plans) occurs during the Employment  Period,  the change of control
shall  not  adversely  affect  any of the  Executive's  rights  under  this
Agreement,  and this Agreement  shall  continue in effect  according to its
terms. In the event of a change of control, the Executive shall be entitled
to vesting and payment of benefits according to the terms of this Agreement
or COMSAT's applicable plans, whichever is more favorable.

     7.   CERTAIN ADDITIONAL PAYMENTS.
          ---------------------------

          (a)  Notwithstanding  anything in this Agreement to the contrary,
in the event that it shall be determined that any payment or benefit to the
Executive,  whether pursuant to the terms of this Agreement or otherwise (a
"Payment"),  would  constitute  an "excess  parachute  payment"  within the
meaning of Section  280G of the Internal  Revenue Code of 1986,  as amended
(the "Code"), the Executive shall be paid an additional amount (a "Gross-Up
Payment")  such  that  the  net  amount  retained  by the  Executive  after
deduction of any excise tax imposed under Section 4999 of the Code, and any
federal,  state and local  income  and  employment  taxes and  excise  tax,
including any interest and penalties with respect thereto, imposed upon the
Gross-Up Payment shall be equal to the Payment. For purposes of determining
the amount of the Gross-Up  Payment,  the Executive  shall be deemed to pay
federal  income tax and  employment  taxes at the highest  marginal rate of
federal  income and  employment  taxation in the calendar year in which the
Gross-Up  Payment  is to be made and state and  local  income  taxes at the
highest  marginal  rate  of  taxation  in the  state  and  locality  of the
Executive's residence on the date the Payment is made, net of the reduction
in federal income taxes that the Executive may obtain from the deduction of
such state and local income taxes.

          (b) All  determinations  to be made under this Section 7 shall be
made by COMSAT's  independent  public  accountant  immediately prior to the
date the Payment is made (the "Accounting Firm"),  which firm shall provide
its determinations  and any supporting  calculations and workpapers both to

                                    -9-

<PAGE>


COMSAT  and  the  Executive   within  10  days  of  such  date.   Any  such
determination  by the Accounting  Firm shall be binding upon COMSAT and the
Executive.  Within  five  days  after  receipt  of  the  Accounting  Fir  s
determination,  COMSAT  shall pay to the  Executive  the  Gross-Up  Payment
determined by the Accounting Firm.

          (c) In the  event  that upon any  audit by the  Internal  Revenue
Service, or by a state or local taxing authority,  of a Payment or Gross-Up
Payment,  a change is finally  determined  to be  required in the amount of
taxes paid by the Executive,  appropriate  adjustments  shall be made under
this  Section  such that the net amount  which is payable to the  Executive
after  taking into account the  provisions  of Section 4999 of the Code and
any  interest  and  penalties  shall  reflect  the intent of the parties as
expressed  in  paragraph  (a)  above,  in  the  manner  determined  by  the
Accounting  Firm. The Executive shall notify COMSAT in writing of any claim
by the Internal  Revenue  Service  that, if  successful,  would require the
payment by COMSAT of a Gross-Up Payment.  Such notification  shall be given
as soon as  practicable  but no later  than ten  business  days  after  the
Executive is informed in writing of such claim and shall apprise  COMSAT 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 it gives  such  notice to
COMSAT (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due).  If COMSAT  notifies  the  Executive in
writing  prior to the  expiration of such period that it desires to contest
such claim, the Executive shall: (i) give COMSAT any information reasonably
requested  by COMSAT  relating  to such  claim;  (ii)  take such  action in
connection with contesting such claim as COMSAT 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 COMSAT;  (iii)  cooperate  with  COMSAT in good faith in order
effectively to contest such claim; and (iv) permit COMSAT to participate in
any  proceedings  relating to such claim;  PROVIDED,  HOWEVER,  that COMSAT
shall bear and pay directly all costs and  expenses  (including  additional
interest and penalties)  incurred in connection with such contest and shall
indemnify and hold the Executive  harmless,  on an after-tax basis, for any
excise tax or income tax  (including  interest and  penalties  with respect
thereto)  imposed as a result of such  representation  and payment of costs
and  expenses.  Without  limitation  on the  foregoing  provisions  of this
Section 7, COMSAT 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 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  COMSAT  shall

                                   -10-

<PAGE>

determine.  COMSAT's control of the contest shall be limited to issues with
respect to which a Gross-Up  Payment  would be  payable  hereunder  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.

          (d)  All of the  fees  and  expenses  of the  Accounting  Firm in
performing the  determinations  referred to in paragraphs (b) and (c) above
shall be borne  solely  by  COMSAT.  COMSAT  agrees to  indemnify  and hold
harmless the Accounting Firm from any and all claims,  damages and expenses
resulting from or relating to its determinations pursuant to paragraphs (b)
and (c) above,  except for claims,  damages or expenses  resulting from the
gross negligence or willful misconduct of the Accounting Firm.

     8.   NON-COMPETITION.

          (a) As an inducement for COMSAT to enter into this Agreement, the
Executive agrees that for a period  commencing as of the Effective Date and
running through the earlier of (i) the end of the Employment  Period if the
Executive  remains employed by COMSAT for the entire  Employment  Period or
(ii) one year following termination of the Executive's employment by COMSAT
for "cause" as defined in Section 5(b) hereof,  or by the Executive for any
reason  (other  than Good  Reason,  in which  case the  provisions  of this
paragraph  (a)  shall  not  apply)  (the  "Non-Competition   Period"),  the
Executive shall not, without the prior written consent of the Board, engage
or  participate,  directly or indirectly,  as principal,  agent,  employee,
employer,  consultant,  stockholder,  partner  or in any  other  individual
capacity  whatsoever,  in the conduct or management of, or own any stock or
any  other  equity  investment  in  or  debt  of,  any  business  which  is
competitive with any business conducted by COMSAT.

          For the purpose of this Agreement, a business shall be considered
to be  competitive  with any  business of COMSAT  only if such  business is
engaged in providing  services or products (i) comparable to or competitive
with (A) any service or product  currently  provided  by COMSAT  during the
Employment Period; (B) any service or product which evolves from or results
from enhancements in the ordinary course during the Non-Competition  Period
to the  services  or  products  provided by COMSAT as of the date hereof or
during  the  Employment  Period;  or (C) any  future  service or product of
COMSAT as to which the Executive materially and substantially  participated
in the development or enhancement,  and (ii) to customers,  distributors or
clients of the type served by COMSAT during the Non-Competition Period.

          (b)  NON-SOLICITATION  OF EMPLOYEES.  During the  Non-Competition
Period,  the Executive  will not (for her own benefit or for the benefit of
any person or entity  other than COMSAT)  solicit,  or assist any person or
entity other than COMSAT to solicit,  any officer,  director,  executive or

                                   -11-


employee (other than an administrative  or clerical  employee) of COMSAT to
leave his or her employment.

          (c) REASONABLENESS;  INTERPRETATION.  The Executive  acknowledges
and agrees,  solely for purposes of determining the  enforceability of this
Section 8 (and not for purposes of determining  the amount of money damages
or for any  other  reason),  that (i) the  markets  served  by  COMSAT  are
national and international and are not dependent on the geographic location
of executive  personnel or the businesses by which they are employed;  (ii)
the  length  of the  Non-Competition  Period  is  linked  to th term of the
Employment  Period and the severance  benefit provided for in Section 5(a);
and (iii) the above covenants are manifestly  reasonable on their face, and
the parties expressly agree that such restrictions have been designed to be
reasonable and no greater than is required for the protection of COMSAT. In
the event that the  covenants in this Section 8 shall be  determined by any
court of competent jurisdiction in any action to be unenforceable by reason
of  their  extending  for too  great a period  of time or over too  great a
geographical  area or by reason of their being too  extensive  in any other
respect,  they shall be  interpreted to extend only over the maximum period
of time  for  which  they  may be  enforceable,  and/or  over  the  maximum
geographical area as to which they may be enforceable and/or to the maximum
extent in all other  respects as to which they may be  enforceable,  all as
determined by such court in such action.

          (d)  INVESTMENT.  Nothing  in this  Agreement  shall be deemed to
prohibit  the  Executive  from  owning  equity or debt  investments  in any
corporation,  partnership or other entity which is competitive with COMSAT,
PROVIDED that such  investments (i) are passive  investments and constitute
five percent (5%) or less of the outstanding  equity  securities of such an
entity the equity  securities of which are traded on a national  securities
exchange or other public market, or (ii) are approved by the Board.

     9.   INDEMNIFICATION;  LIABILITY  INSURANCE.  The  Executive  shall be
entitled to indemnification and coverage under COMSAT's liability insurance
policy for directors and officers to the same extent as other directors and
officers of COMSAT. In addition,  the Executive shall be indemnified to the
maximum  extent  permitted  by law of the  jurisdiction  in which COMSAT is
incorporated, as it may be amended from time to time.


     10.  ENFORCEMENT.
          -----------

          (a) The Executive  acknowledges that a breach of the covenants or
provisions  contained in Sections 3, 4 and 8 of this  Agreement  will cause
irreparable  damage to COMSAT,  the exact amount of which will be difficult
to  ascertain,  and that the  remedies  at law for any such  breach will be
inadequate.  Accordingly,  the  Executive  agrees  that  if  the  Executive
breaches  or  threatens  to  breach  any of  the  covenants  or  provisions

                                   -12-

<PAGE>

contained  in  Sections  3, 4 and 8 of this  Agreement,  in addition to any
other remedy  which may be  available at law or in equity,  COMSAT shall be
entitled to seek specific  performance and injunctive  relief in a court of
competent jurisdiction after notice and a hearing.

          (b) The parties  expressly agree that any litigation  directly or
indirectly  arising  out of or  relating to this  Agreement,  including  an
action  brought by COMSAT  pursuant to  paragraph  (a) of this  Section 10,
shall be  brought  in a court of  competent  jurisdiction  in the  State of
Maryland.

     11.  SEVERABILITY.   Should  any   provision  of  this   Agreement  be
determined to be  unenforceable  or prohibited by any applicable  law, such
provision  shall be ineffective to the extent,  and only to the extent,  of
such  unenforceability or prohibition  without  invalidating the balance of
such  provision  or any other  provision  of this  Agreement,  and any such
unenforceability or prohibition in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

     12.  ASSIGNMENT.  The Executive's  rights and  obligations  under this
Agreement  shall not be assignable by the  Executive.  COMSAT's  rights and
obligations  under this Agreement  shall not be assignable by COMSAT except
as  incident  to  the  transfer,   by  merger  or  otherwise,   of  all  or
substantially  all of the  business  of  COMSAT.  In the  event of any such
assignment  by COMSAT,  all rights of COMSAT  hereunder  shall inure to the
benefit of the  assignee,  PROVIDED  that all  references  herein to COMSAT
shall be deemed to refer with equal  force and effect to any  corporate  or
other successor of COMSAT.

     13.  NOTICES.  All notices and other communications which are required
or may be given  under  this  Agreement  shall be in  writing  and shall be
deemed to have been duly given when received if personally delivered;  when
transmitted if transmitted by telecopy,  electronic or digital transmission
method,  provided  that in such case it shall also be sent by  certified or
registered  mail,  return receipt  requested;  the day after it is sent, if
sent for next day  delivery to a domestic  address by  recognize  overnight
delivery  service (E.G.,  Federal  Express);  and upon receipt,  if sent by
certified or registered mail,  return receipt  requested.  Unless otherwise
changed by notice, in each case notice shall be sent to:

          If to Executive, addressed to:

               Betty C. Alewine
               1742 Creek Crossing Road
               Vienna, Virginia 22182

                                   -13-

<PAGE>

          With a copy (not constituting notice) to:

               Williams & Connolly
               725 Twelfth Street, N.W.
               Washington, DC  20005
               Attention:  Robert B. Barnett, Esq.
               Telecopier No.:  (202) 434-5029


          If to COMSAT, addressed to:

               COMSAT Corporation
               6560 Rock Spring Drive
               Bethesda, MD 20817
               Attention:  Vice President, Human Resources
                           and Organization Development
               Telecopier No.:  (301) 214-7134

          With a copy (not constituting notice) to:

               COMSAT Corporation
               6560 Rock Spring Drive
               Bethesda, MD 20817
               Attention:  Robert N. Davis, Jr.
               Telecopier No.:  (301) 214-7128

     14.  MISCELLANEOUS.  This Agreement  constitutes the entire agreement,
and supersedes all prior agreements,  of the parties hereto relating to the
subject  matter  hereof,  and  there  are  no  written  or  oral  terms  or
representations  made by either party other than those contained herein. No
amendment,  supplement,  modification  or waiver of this Agreement shall be
binding unless  executed in writing by the party to be bound  thereby.  The
validity,  interpretation,  performance  and  enforcement  of the Agreement
shall be  governed  by the laws of the  State of  Maryland  without  giving
effect to  conflicts of laws  principles  thereof.  The headings  contained
herein are for reference  purposes only and shall not in any way affect the
meaning or interpretation  of this Agreement.  The waiver by any party of a
breach of any term or condition of this  Agreement by the other party shall
not  operate  as nor be  construed  as a waiver  of any  subsequent  breach
thereof  or a waiver  of a breach  of any other  term or  condition  o this
Agreement.  This  Agreement may be signed in two (2) or more  counterparts,
each of which shall  constitute an original but all of which together shall
form only a single instrument.

                                   -14-


<PAGE>



     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of July 18, 1997.



                              /s/ Betty C. Alewine
                              -------------------------------
                              Betty C. Alewine, Executive




                              COMSAT Corporation



                              By:  /s/ Edwin I. Colodny
                                   --------------------------
                                   Edwin I. Colodny, Chairman


                                   -15-