Document:

Exhibit 10.16

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement
(the “Agreement”), dated as of March 26, 2004 is by and between Teleglobe
Bermuda Holdings Ltd (the “Company”) and Gerald Porter Strong (the
“Executive”).

 

WHEREAS, prior to the
consummation of the merger contemplated pursuant to the Agreement and Plan of
Merger among Teleglobe International Holdings, Ltd (“TIHL”), VEX Merger
Subsidiary Corp. (“VEX”) and ITXC Corp. (“ITXC”), dated as of November 4, 2003
(the “Merger Agreement”), all of TIHL’s assets will be transferred to and held
by the Company;

 

WHEREAS, the Executive is entering into an amended
and restated employment agreement with Teleglobe Canada ULC (“Teleglobe
Canada”), an affiliate of the Company, to provide services to Teleglobe Canada;

 

WHEREAS, in connection with consummation of the
merger of VEX and ITXC, the Executive is being appointed as Chief Executive
Officer of the Company; and

 

WHEREAS, the Company and the Executive desire to enter into this Agreement with
respect to the services to be provided by the Executive to the Company.

 

NOW, THEREFORE, in consideration of the
promises in this Agreement, the mutuality and sufficiency of which are hereby
acknowledged, the parties agree as follows:

 

1)     Term.  Unless terminated earlier in accordance with
Section 6 hereof, the term of the Agreement and the employment relationship
hereunder shall commence as of the Effective Time (as defined under the Merger
Agreement) and will continue until December 31, 2005 (the “Initial Term”);
provided, however, that the Initial Term shall be extended automatically for
additional one (1) year periods commencing at the end of the Initial Term and
on each anniversary date thereafter (each an “Extended Term”), unless and until
either party provides a non-renewal notice to the other party not less than
thirty (30) days before the expiration date of the Initial Term or Extended
Term, such that termination of the Agreement shall be effective as of the end
of the Initial Term or Extended Term, as the case may be.  For purposes of this Agreement, “Term” shall
include the Initial Term and any Extended Terms.

 

2)     Duties.  The Company shall employ the Executive
effective as of the Effective Time to render, subject to the last sentence of
this Section 2, services to the Company. 
The Executive will serve in the capacity of Chief Executive Officer of
the Company and shall report to the Board of Directors of the Company (the
“Board”), of which he shall be a member as of the Effective Time.  The Executive will perform such executive
duties related to the Company as may be assigned to him from time to time by
the Board consistent with the Executive’s position as Chief Executive Officer
of the Company, including, but not limited to, the following, subject, in each
case to the determinations of the Board in the exercise of its fiduciary
duties:

 

(i)            Approval
of the Company’s medium and long-term business plans;

 

(ii)           Approval
of the Company’s financial statements and filings submitted to the United
States Securities and Exchange Commission;

 

 

(iii)          Approval
of the Company’s budget;

 

(iv)          Annual
review of the Company’s dividend policy;

 

(v)           Review
and approval of the Company’s employment agreements, compensation plans,
performance criteria and equity compensation provided to senior management;

 

(vi)          Review
of performance of the Company’s senior management;

 

(vii)         Approval
of major capital expenditure plans;

 

(viii)        Approval
of material contracts involving Teleglobe International Holdings Ltd or
Teleglobe Bermuda Holdings Ltd;

 

(ix)           Ensuring
the execution of resolutions adopted at Company shareholder meetings;

 

(x)            Approval
of significant corporate matters, including, but not limited to, acquisitions;

 

(xi)           Approval
of major financing arrangements;

 

(xii)          Management
of Company shareholder meetings and similar meetings and assist in the
preparation of documentation of such meetings (with related reports); and

 

(xiii)         Communicate
with the Company’s Audit Committee on matters including:

 

a.             Selection,
compensation and oversight of external auditor;

 

b.             Reviewing material
written correspondence between auditors and management;

 

c.             Retaining and
supervising independent counsel and other advisors;

 

d.             Pre-approving all
audit and non-audit services by external auditor;

 

e.             Quarterly certification
of financial statement by Chief Executive Officer and Chief Financial Officer
of the Company;

 

f.              Reviewing
management’s annual assessment of internal controls; and

 

g.             Discussing critical
accounting policies and practices with external auditor.

 

The Executive will devote all his full
working-time and attention to the performance of such duties and to the
promotion of the business and interests of the Company and its affiliates.  This provision, however, will not prevent
the Executive from investing his

 

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funds or assets in any form or manner, or
from acting as an advisor to or a member of, the board of directors of any
companies, businesses, or charitable organizations, so long as such actions do
not violate the provisions of Section 5 of this Agreement or interfere with the
Executive’s performance of his duties hereunder.

 

3)     Salary.  During the Term, the Executive shall receive
an annual base salary of Seventy-Seven Thousand Eight Hundred Fifteen Dollars
(CDN$77,815) with respect to his services for the Company (“Base Salary”)
payable in accordance with the payroll practices of the Company.

 

4)     Tax
Matters.  During the Term, the
Company shall cause its accountants or other designated agent to prepare and
file, at the Company’s expense, any federal, provincial, state and local income
tax returns (each, a “Tax Return”) required to be filed by the Executive for
taxable periods that include the Term (or a portion thereof).  To the extent that the amount of income tax
due and payable for any taxable period on the Executive’s compensation set
forth in Sections 3 and 6 hereof (and, as applicable, any taxable amounts
relating to payments under this Section 4) exceeds the amount of income tax
that would have been due and payable for such taxable period on such
compensation if such compensation were paid to the Executive as a citizen and
resident of the United Kingdom for services performed in the United Kingdom,
the Executive shall receive an additional cash payment from the Company in an
amount equal to such excess amount of income tax that is due and payable.  At the beginning of each year during the
Term, an estimate of the tax equalization described in this Section 4 on a
monthly basis shall be made on the Base Salary to be received by the Executive
during such year and such tax equalization amount shall be paid to the
Executive on a monthly basis.  At the
end of the year, a final tax equalization calculation shall be made with
respect to all taxable income earned or paid to the Executive during such year.  To the extent that any amount of tax
equalization for the Executive is needed in addition to the total monthly
payments already made to the Executive, such payment shall be made to the
Executive no later than five (5) days prior to the date that the relevant
income tax payment is due to the appropriate taxing authority.

 

5)     Non-Competition;
Confidentiality; Remedies.

 

a)             Non-Competition.  During the Term, for any period in which the
Executive is receiving payments pursuant to Section 6 and for six (6) months
after the expiration of the Term, the Executive agrees that the Executive will
not, without the prior written consent of the Company, directly or indirectly,
whether individually, as a director, stockholder, partner, owner, employee,
consultant, or agent of any business, or in any other capacity, other than on
behalf of the Company, or any of subsidiaries or affiliates:  own, manage, control, be employed by,
participate in, or be connected in any manner with the ownership, management,
operation or control of any business conducted by the Company or any of
subsidiaries or affiliates in the international wholesale voice, IP transit,
voice over internet protocol or global roaming markets (“Competitive
Businesses”).  Nothing in this paragraph
shall prevent the Executive from (i) owning for passive investment purposes not
intended to circumvent this paragraph, less than one percent (1%) of the
publicly traded equity securities of any competing enterprise (so long as the
Executive has no power to manage, operate, advise, consult with or control the
competing enterprise and no power, alone or in conjunction with other
affiliated parties, to select a director, general partner, or similar governing
official of the competing enterprise other than in connection

 

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with
the normal and customary voting powers afforded the Executive in connection
with any permissible equity ownership), or (ii) serving chairman of the UK
Telecom Advisory Board.  The Executive
acknowledges that the foregoing restrictions placed upon him are necessary and
reasonable in scope and duration to adequately protect the Company’s and any of
its affiliates’ or subsidiaries’ interests and the goodwill of the Company and
any of its affiliates or subsidiaries and are a material inducement for the Company
to retain the Executive’s services.

 

b)            Non-Solicitation.  The Executive agrees that the Executive will
not, without the prior written consent of the Company, directly or indirectly,
whether for the Executive’s own account or the account of any other person (i)
at any time during the Term, for any period in which the Executive is receiving
payments pursuant to Section 6 and for six (6) months after the expiration of
the Term: solicit, employ, or otherwise engage as an employee, independent
contractor, or otherwise, any person who is or was an employee of the Company,
or any of their affiliates or subsidiaries, at any time during the twelve (12)
month period preceding such solicitation or employment or any manner induce or
attempt to induce any such employee to terminate his employment with the
Company or any of its affiliates or subsidiaries and become associated with
Competitive Businesses; or (ii) at any time during the Term, for any period in
which the Executive is receiving payments pursuant to Section 6 and for six (6)
months after the expiration of the Term, interfere with the relationship of any
person who is a contractor, supplier, or customer of the Company, or any of its
affiliates or subsidiaries in Competitive Businesses.

 

c)             Confidentiality.  The Executive acknowledges that prior to the
Term he has acquired, and during the Term the Executive will acquire,
Confidential Information (as defined herein) regarding the business of the
Company and its affiliates and subsidiaries. 
Accordingly, the Executive agrees that, without the prior written
consent of the Company, he will not, at any time, either during or after the
Term, disclose to any unauthorized person or otherwise use any such
Confidential Information for any reason other than the Company’s or any of its
affiliates’ or subsidiaries’ business. 
For this purpose, Confidential Information means non-public information
concerning the financial data, business strategies, product development (and
proprietary product data), customer lists, marketing plans, and other
proprietary information concerning the Company and its subsidiaries and
affiliates, except for specific items that have become publicly available other
than as a result of the Executive’s breach of this Agreement.  The Executive further agrees that he will
abide by any confidentiality provisions applicable to affiliates of the Company
under the Purchase Agreement and the confidentiality provisions applicable to
TLGB and its Executives contained in the letter agreement between Cerberus and
Teleglobe Inc., dated July 24, 2002.

 

d)            Remedy for Breach.  The Executive hereby acknowledges that the
provisions of this paragraph are reasonable and necessary for the protection of
the Company, the and its subsidiaries and affiliates.  The Executive further acknowledges that the Company and its
subsidiaries and affiliates will be irreparably harmed if such covenants are
not specifically enforced.  Accordingly,
the Executive agrees that, in addition to any other relief to which the Company
may be entitled, including claims for damages, the Company will be entitled to
seek and obtain injunctive relief (without the requirement of any bond) from a
court of competent jurisdiction for the purposes of restraining the Executive
from an actual or threatened breach of such covenants.  In addition, without limiting the Company’s
remedies for any breach of any

 

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restriction
on the Executive set forth in this paragraph, except as required by law, if the
Executive breaches any of the covenants applicable to the Executive in this
paragraph, as reasonably determined by the Company in good faith, the Company
will have no obligation to pay any amounts that remain payable by the Company
to the Executive, including, but not limited to, the amounts under Section 6
hereof.  If any of the rights or
restrictions contained in this paragraph shall be deemed to be unenforceable by
reason of the extent, duration or geographical scope of such rights or
restrictions, the parties hereby agree that a court of competent jurisdiction
shall reduce such extent, duration and geographical scope and enforce such
right or restriction in its reduced form for all purposes in the manner
contemplated hereby; provided  that such extent, duration and
geographical scope shall only be reduced to the extent necessary in order to
make such right or restriction enforceable.

 

6)     Termination.

 

a)             Death or
Disability.  The Agreement shall
terminate immediately upon the Executive’s death or Disability.  For the purposes of this Agreement,
“Disability” means a determination by the Company, in accordance with
applicable law that, as a result of a physical or mental injury or illness, the
Executive is unable to perform the essential functions of his duties with or
without reasonable accommodation.  If
the Executive’s services are terminated as a result of a death or Disability,
the Executive (or his legal representatives) shall receive (i) any unpaid Base
Salary to the date of termination and (ii) any tax equalization amount
calculated under Section 4 hereof.

 

b)            Termination for
Cause.  Upon delivery of written
notice of termination for “Cause” (as defined below) from the Company to the
Executive, the Agreement shall terminate immediately.  For the purposes of this Agreement, “Cause” means (i) commission
of a felony by the Executive, (ii) acts of
dishonesty by the Executive resulting or intending to result in personal gain
or enrichment at the expense of the Company or any of its affiliates or
subsidiaries, (iii) the Executive’s material breach of this
Agreement, including, but not limited to, a breach of his representations set
forth in Section 8 of this Agreement, (iv) the Executive’s contravention of
specific written lawful directions from the Board, (v) conduct by the Executive
in connection with his duties hereunder that is fraudulent, unlawful, or
negligent, or (vi) misconduct by the Executive which seriously discredits or
damages the Company or any of its affiliates
or subsidiaries.  If the
Executive is terminated for Cause during the Term, the Executive shall receive
(i) any unpaid Base Salary to the date of termination and (ii) any tax
equalization amount calculated under Section 4 hereof on compensation paid to
the date of termination.

 

c)             Termination
Without Cause or for Good Reason. 
The Company may terminate Executive’s employment without Cause at any
time without notice and the Executive may terminate his employment with Good
Reason upon thirty (30) days prior written notice to the Company.  If during the Term the Company terminates
the Executive without Cause or the Executive terminates his employment with
Good Reason (as defined below), the Executive shall receive (i) monthly
installments of Base Salary for the lesser of (a) the remaining Term had the
Executive remain employed or (b) twelve (12) months from the date of
termination (subject to compliance with the provisions of Section 5 hereof) and
(ii) any tax equalization amount calculated under Section 4 hereof.

 

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For the purposes of this Agreement, “Good
Reason” means the occurrence of any of the following without the Executive’s
written consent:  (i) action by the
Company that results in a material diminution in the Executive’s position,
authority, duties or responsibilities; (ii) the Company’s failure to make any
payment or provide any award or benefit to the Executive under this Agreement
pursuant to the terms hereof; or (iii) the Company’s breach of any material
term of this Agreement; provided that the Company shall have failed to cure the
deficiency that results in “Good Reason” within fifteen (15) business days
after receipt of written notice from the Executive specifying the nature of the
deficiency in reasonable detail; and provided further that a change in the
Executive’s position, authority, duties or responsibilities in connection with
a management succession plan approved by the Board shall not constitute “Good
Reason.”

 

d)            Voluntary
Termination Without Good Reason. 
The Executive may terminate his employment during the Term upon thirty
(30) days prior written notice to the Company without Good Reason.  If during the Term the Executive terminates
his employment without Good Reason, the Executive shall receive (i) any unpaid
Base Salary to the date of termination and (ii) any tax equalization amount
calculated under Section 4 hereof.

 

e)             Expiration of
Term.  Upon the expiration of the
Term specified in Section 1 without an earlier termination pursuant to this
Section 6, this Agreement shall terminate without further action by the
Executive or the Company.  Upon such
expiration, the Executive shall receive (i) any unpaid Base Salary to the date
of expiration and (ii) any tax equalization amount calculated under Section 4
hereof.

 

7)     Disclosure.  The Executive shall disclose immediately to
the Company the existence of any relationship between the Executive and any
other entity that creates or may create a conflict of interest that may affect
the independent professional judgment of the Executive in carrying out his or
its duties under this Agreement.

 

8)     Representation.  The Executive expressly represents and
warrants to the Company that as of the date of his signing this Agreement that
he is not a party to any contract or agreement which will or may restrict in
any way his or its ability to fully perform his or its duties and
responsibilities under this Agreement.

 

9)     Governing
Law.  This Agreement will be
governed by and construed in accordance with the laws of Bermuda, without
giving effect to the principles of conflicts of laws.

 

10)   Ownership
of  Property.  All written materials, records and documents
made by the Executive or coming into his possession before or during the Term
concerning the Company or any of its
affiliates or subsidiaries and all tangible items provided to the
Executive by Teleglobe, the Company or any
of its affiliates or subsidiaries before or during the Term shall be the
sole property of the Company or any of its
affiliates or subsidiaries, as applicable, and, upon the termination of
the Agreement or upon the request of the Company during the Term, the Executive
shall promptly deliver the same to the Company.

 

11)   Notices.  All notices and other communications that
are required or may be given under this Agreement must be in writing and will
be deemed to have been duly given when

 

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delivered in person, upon delivery by a nationally recognized overnight
courier service, or by facsimile to the party to whom the notice is being
given, as follows:

 

If to the Company:

 

Teleglobe Bermuda Holdings
Ltd.

P.O. Box HM 1154

10 Queen Street

Hamilton HM EX, Bermuda

Attention:  Board of Directors

(441) 296-4856 telephone

(441) 292-6900 facsimile

 

with a copy to:

 

Cerberus Capital Management,
L.P.

299 Park Avenue

New York, New York 10171

Attention:  Lenard Tessler

(212) 909-1464 telephone

(212) 755-3009 facsimile

 

and

 

Attention:  Seth Plattus

(212) 891-2120

(212) 891-1541

 

with a copy to:

 

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York  10022

Attention:  Stuart D. Freedman, Esq.

(212) 756-2000 telephone

(212) 593-5955 facsimile

 

If to the Executive:

 

Mr. Gerald Porter Strong

c/o Teleglobe Bermuda Holdings Ltd.

P.O. Box HM 1154

10 Queen Street

Hamilton HM EX, Bermuda

(441) 296-4856 telephone

(441) 292-6900 facsimile

 

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Either party may change the address provided
above by delivering written notice of such change of address to the other
party.

 

12)   Assignability;
Successors.  This Agreement shall
inure to the benefit of and be binding upon the successors of the Company.  Neither the Executive nor the Company may
assign this Agreement without the express written consent of the other party;
provided, however, that the Company’s obligations under this Agreement shall be
the binding legal obligations of any successor of the Company, and, provided
further that, the Executive hereby agrees that the Company may assign this Agreement
to any of its affiliates or subsidiaries at any time without the consent of the
Executive.

 

13)   Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.

 

14)   Entire
Agreement.  The Agreement contains
the entire agreement between the parties with respect to the subject matter of
this Agreement and supersedes all prior agreements and understandings, oral or
written, between the parties with respect to the subject matter of this
Agreement.

 

15)   Waiver
and Amendments.  This Agreement may
be amended, modified, superseded, canceled, renewed or extended, and the terms
and conditions hereof may be waived, only by a written instrument signed by the
parties or, in the case of a waiver, by the party waiving compliance.  No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any right, power or privilege hereunder,
nor any single or partial exercise of any right, power or privilege hereunder,
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder.

 

16)   Severability.  In the event that any one or more of the
terms, conditions or provisions of this Agreement is held invalid, illegal or
unenforceable, that term, condition or provision shall be severed and the
remaining terms, conditions and provisions shall remain binding and effective.

 

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

 

	
   

  	
  TELEGLOBE BERMUDA HOLDINGS
  LTD.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lenard Tessler

  	 

	
   

  	
  Name:

  	
  Lenard Tessler

  
	
   

  	
  Title: 

  	
  Chairman

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Gerald Porter Strong

  	 

	
   

  	
  GERALD PORTER STRONG

  
					

 

9Exhibit 10.17

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

This Amended and Restated
Employment Agreement (the “Agreement”), dated as of March 26, 2004, is by and
between Teleglobe Canada ULC  (the
“Company”) and Richard Willett (the “Executive”).

 

WHEREAS, pursuant to the Purchase Agreement dated as
of September 18, 2002 among TLBG Acquisition LLC and Teleglobe Inc. (“Old
Teleglobe”), Teleglobe USA Inc., and all the other parties listed as Key
Sellers on the signature pages thereto, as “Key Sellers” (the “Purchase
Agreement”), TLGB Acquisition LLC (“TLGB”) agreed to purchase the “Core
Business” (as defined under the Purchase Agreement) from Old Teleglobe and its
subsidiaries.  Such transaction was
consummated on May 31, 2003 (the “Closing Date”);

 

WHEREAS, in connection with such transaction, TLGB
and the Executive entered into an employment agreement, dated April 14, 2003
(the “Original Employment Agreement”);

 

WHEREAS, Section 19 of the Original Employment
Agreement provides that neither the Executive nor TLGB may assign the Original
Employment Agreement without the express written consent of the other party;
provided that the Executive agrees that TLGB may assign the Original Employment
Agreement to the “Owner Entity” or any of their affiliates or subsidiaries at
any time without the consent of the Executive; and

 

WHEREAS, TLGB has assigned the Original Employment
Agreement to the Company, an affiliate of TLGB;

 

WHEREAS, the Company and the
Executive desire to enter into this Agreement which shall amend and restate the
Original Employment Agreement; and

 

WHEREAS, prior to the
consummation of the merger contemplated pursuant to the Agreement and Plan of
Merger among Teleglobe International Holdings, Ltd. (“TIHL”), VEX Merger
Subsidiary Corp. and ITXC Corp., dated as of November 4, 2003, all of TIHL’s
assets (including the Company) will be transferred to and held by Teleglobe
Bermuda Holdings Ltd., a newly formed direct wholly owned subsidiary of TIHL
(“New Teleglobe”).

 

NOW, THEREFORE, in consideration of the promises
in this Agreement, the mutuality and sufficiency of which are hereby
acknowledged, the parties agree as follows:

 

1)             Term.  Unless terminated earlier in accordance with
Section 10 hereof, the term of the Agreement and the employment relationship
hereunder will be continued by the Company until February 2, 2006 (the “Initial
Term”); provided, however, the Term shall be automatically extended for
additional one (1) year periods commencing at the end of the Initial Term and
on each anniversary date thereafter (each, an “Extended Term”), unless and
until either party provides a non-renewal notice to the other party not less
than thirty (30) days before the expiration of the Initial Term or Extended
Term, such that such termination of the Agreement shall be effective as of the
end of the Initial Term or Extended Term, as the case may be.  For the purposes of this Agreement, “Term”
shall include the Initial Term and the Extended Term.

 

 

2)             Duties.  The Company shall employ the Executive to
render, subject to the last sentence of this Section 2, services to the
Company.  The Executive will serve in
the capacity of Chief Financial Officer of the Company and shall report to the
Chief Executive Officer of the Company (the “CEO”).  The Executive will perform such executive duties related to the
businesses of the Company as may be assigned to him from time to time by the
CEO consistent with the Executive’s position as Chief Financial Officer of the
Company.  The Executive will devote all
his full working-time and attention to the performance of such duties and to
the promotion of the business and interests of the Company and its
affiliates.  This provision, however,
will not prevent the Executive from investing his funds or assets in any form
or manner, or from acting as an advisor to or a member of, the board of
directors of any companies, businesses, or charitable organizations, so long as
such actions do not violate the provisions of Section 9 of this Agreement or
interfere with the Executive’s performance of his duties hereunder.

 

3)             Salary.  During the Term, the Executive shall receive
an annual base salary of Three Hundred Fifty Thousand One Hundred Sixty-Seven
Dollars and Fifty Cents (CDN$350,167.50) (“Base Salary”) payable in accordance
with the payroll practices of the Company.

 

4)             Annual Bonus.  The Executive shall be eligible to receive
an annual bonus during the Term under a bonus plan or program (the “Bonus
Program”) established by the Board of Directors of the Company (the “Board) or
the Board of Directors of one of the Company’s affiliates, subject to the
achievement of appropriate performance targets determined by the Board of
Directors (or, in each case, any committee thereof) of the Company or its
affiliate, in its sole discretion, upon consultation with the Executive;
provided that such annual bonus shall not exceed 300% of annualized Base
Salary.

 

5)             Tax Matters.  During the Term, the Company shall cause its
accountants or other designated agent to prepare and file, at the Company’s
expense, any federal, state and local income tax returns (each, a “Tax Return”)
required to be filed by the Executive for taxable periods that include the Term
(or a portion thereof).  To the extent
that the amount of income tax due and payable for any taxable period on the
Executive’s compensation set forth in Sections 3, 4 and 10 hereof (and, as
applicable, any taxable amounts relating to payments under this Section 5 and
reimbursements under Section 6) exceeds the amount of income tax that would
have been due and payable for such taxable period on such compensation if such
compensation were paid to the Executive as a resident of Ohio, the Executive
shall receive an additional cash payment from the Company in an amount equal to
such excess amount of income tax that is due and payable.  At the beginning of each year during the
Term, an estimate of the tax equalization described in this Section 5 on a
monthly basis shall be made on the Base Salary to be received by the Executive
during such year and such tax equalization amount shall be paid to the
Executive on a monthly basis.  At the
end of the year, a final tax equalization calculation shall be made with
respect to all taxable income earned or paid to the Executive during such year.  To the extent that any amount of tax equalization
for the Executive is needed in addition to the total monthly payments already
made to the Executive, such payment shall be made to the Executive no later
than five (5) days prior to the date that the relevant income tax payment is
due to the appropriate taxing authority.

 

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6)             Expenses.  During the Term, the Executive shall be
entitled to receive prompt reimbursement of all reasonable out-of-pocket
expenses properly incurred by him in connection with his duties under this
Agreement, including reasonable expenses of entertainment and travel, provided
that such expenses are documented and reported in accordance with the policies
and procedures of the Company, at the time the expenses are incurred and
provided further that (a) any such expense in excess of CDN$3,112.60 and (b)
the engagement of any outside agents or consultants, shall require the prior
approval of the Company

 

7)             Participation in
Employee Benefit Plans.  The
Executive shall be permitted, during the Term, if and to the extent eligible,
to participate in any group life, hospitalization or disability insurance plan,
health program, pension plan or similar benefit plan of the Company, which may
be available to senior executives of the Company generally, on the same terms
as such senior executives.

 

8)             Vacation.  During the Term, the Executive shall be
entitled to twenty (20) days of vacation per year.

 

9)             Non-Competition;
Confidentiality; Remedies.

 

a)             Non-Competition.  During the Term, for any period in which the
Executive is receiving payments pursuant to Section 10 and for six (6) months
after the expiration of the Term, the Executive agrees that the Executive will
not, without the prior written consent of the Company, directly or indirectly,
whether individually, as a director, stockholder, partner, owner, employee,
consultant, or agent of any business, or in any other capacity, other than on
behalf of the Company or any of its subsidiaries or affiliates:  own, manage, control, be employed by, participate
in, or be connected in any manner with the ownership, management, operation or
control of any business conducted by the Company or any of its subsidiaries or
affiliates in the international wholesale voice, IP transit, voice over
internet protocol or global roaming markets (“Competitive Businesses”).  Nothing in this paragraph shall prevent the
Executive from owning for passive investment purposes not intended to
circumvent this paragraph, less than one percent (1%) of the publicly traded
equity securities of any competing enterprise (so long as the Executive has no
power to manage, operate, advise, consult with or control the competing
enterprise and no power, alone or in conjunction with other affiliated parties,
to select a director, general partner, or similar governing official of the
competing enterprise other than in connection with the normal and customary
voting powers afforded the Executive in connection with any permissible equity
ownership).  The Executive acknowledges
that the foregoing restrictions placed upon him are necessary and reasonable in
scope and duration to adequately protect the Company’s and any of its
affiliates’ or subsidiaries’ interests and the goodwill of the Company and any
of its affiliates or subsidiaries and are a material inducement for the Company
to retain the Executive’s services.

 

b)            Non-Solicitation.  The Executive agrees that the Executive will
not, without the prior written consent of the Company, directly or indirectly,
whether for the Executive’s own account or the account of any other person (i)
at any time during the Term, for any period in which the Executive is receiving
payments pursuant to Section 10 and for six (6) months after the expiration of
the Term: solicit, employ, or otherwise engage as an employee, independent
contractor, or otherwise, any person who is or was an employee of the Company
or

 

3

 

any
of its subsidiaries or affiliates, at any time during the twelve (12) month
period preceding such solicitation or employment or any manner induce or
attempt to induce any such employee to terminate his employment with the
Company or any of its subsidiaries or affiliates and become associated with
Competitive Businesses; or (ii) at any time during the Term, for any period in
which the Executive is receiving payments pursuant to Section 10 and for six
(6) months after the expiration of the Term, interfere with the relationship of
any person who is a contractor, supplier, or customer of the Company or any of
its subsidiaries or affiliates.

 

c)             Confidentiality.  The Executive acknowledges that prior to the
Term he has acquired, and during the Term the Executive will acquire,
Confidential Information (as defined herein) the business of the Company and
its affiliates and subsidiaries. 
Accordingly, the Executive agrees that, without the prior written
consent of the Company, he will not, at any time, either during or after the
Term, disclose to any unauthorized person or otherwise use any such
Confidential Information for any reason other than the Company’s or any of its
affiliates’ or subsidiaries’ business. 
For this purpose, Confidential Information means non-public information
concerning the financial data, business strategies, product development (and
proprietary product data), customer lists, marketing plans, and other
proprietary information concerning the Company and its subsidiaries and
affiliates, except for specific items that have become publicly available other
than as a result of the Executive’s breach of this Agreement.  The Executive further agrees that he will
abide by any confidentiality provisions applicable to affiliates of the Company
under the Purchase Agreement and the confidentiality provisions applicable to
TLGB and its Executives contained in the letter agreement between Cerberus and
Old Teleglobe, dated July 24, 2002.

 

d)            Remedy for Breach.  The Executive hereby acknowledges that the
provisions of this paragraph are reasonable and necessary for the protection of
the Company, the and its subsidiaries and affiliates.  The Executive further acknowledges that the Company and its
subsidiaries and affiliates will be irreparably harmed if such covenants are
not specifically enforced.  Accordingly,
the Executive agrees that, in addition to any other relief to which the Company
may be entitled, including claims for damages, the Company will be entitled to
seek and obtain injunctive relief (without the requirement of any bond) from a
court of competent jurisdiction for the purposes of restraining the Executive
from an actual or threatened breach of such covenants.  In addition, without limiting the Company’s
remedies for any breach of any restriction on the Executive set forth in this
paragraph, except as required by law, if the Executive breaches any of the
covenants applicable to the Executive in this paragraph, as reasonably determined
by the Company in good faith, the Company will have no obligation to pay any
amounts that remain payable by the Company to the Executive, including, but not
limited to, the amounts under Section 10 hereof; provided that the Executive
shall receive any expenses under Section 6 hereof incurred but not yet
reimbursed to the Executive.  If any of
the rights or restrictions contained in this paragraph shall be deemed to be
unenforceable by reason of the extent, duration or geographical scope of such
rights or restrictions, the parties hereby agree that a court of competent
jurisdiction shall reduce such extent, duration and geographical scope and
enforce such right or restriction in its reduced form for all purposes in the
manner contemplated hereby; provided  that such extent, duration
and geographical scope shall only be reduced to the extent necessary in order
to make such right or restriction enforceable.

 

4

 

10)           Termination.

 

a)             Death or
Disability.  The Agreement shall
terminate immediately upon the Executive’s death or Disability.  For the purposes of this Agreement,
“Disability” means a determination by the Company, in accordance with
applicable law that, as a result of a physical or mental injury or illness, the
Executive is unable to perform the essential functions of his duties with or
without reasonable accommodation.  If
the Executive’s services are terminated as a result of a death or Disability,
the Executive (or his legal representatives) shall receive (i) any unpaid Base
Salary to the date of termination, (ii) a pro rata portion of the bonus set
forth in Section 4 for the year of termination based on the period of the
fiscal year in which the Executive was employed prior to termination and the
Company’s or one of its affiliate’s achievement of any applicable annual
performance targets for the fiscal year in which the termination occurs (such
bonus, if any, shall be paid to the Executive (or his legal representatives)
within thirty (30) days after the determination of the achievement of the applicable
performance targets), (iii) expenses under Section 6 incurred to the date of
termination but not yet reimbursed to the Executive (or his legal
representatives) and (iv) any tax equalization amount calculated under Section
5 hereof.

 

b)            Termination for
Cause.  Upon delivery of written
notice of termination for “Cause” (as defined below) from the Company to the
Executive, the Agreement shall terminate immediately.  For the purposes of this Agreement, “Cause” means (i) commission
of a felony by the Executive, (ii) acts of dishonesty by the Executive
resulting or intending to result in personal gain or enrichment at the expense
of the Company or any of its affiliates or subsidiaries, (iii) the
Executive’s material breach of this Agreement, including, but not limited to, a
breach of his representations set forth in Section 13 of this Agreement, (iv)
the Executive’s contravention of specific written lawful directions from the
CEO or the Board, (v) conduct by the Executive in connection with his duties
hereunder that is fraudulent, unlawful, or negligent, or (vi) misconduct by the
Executive which seriously discredits or damages the Company or any of its
affiliates or subsidiaries.  If the
Executive is terminated for Cause during the Term, the Executive shall receive
(i) any unpaid Base Salary to the date of termination, (ii) expenses under
Section 6 incurred to the date of termination, but not yet reimbursed to the
Executive and (iii) any tax equalization amount calculated under Section 5
hereof.

 

c)             Termination Without
Cause or for Good Reason.  The
Company may terminate Executive’s employment without Cause at any time without
notice and the Executive may terminate his employment with Good Reason upon
thirty (30) days prior written notice to the Company.  If during the Term the Company terminates the Executive without
Cause or the Executive terminates his employment with Good Reason (as defined
below), the Executive shall receive (i) monthly installments of Base Salary for
the lesser of (a) the remaining Term had the Executive remain employed or (b)
twelve (12) months from the date of termination (subject to compliance with the
provisions of Section 9 hereof), (ii) a pro rata portion of the bonus set forth
in Section 4 for the year of termination based on the period of the fiscal year
in which the Executive was employed prior to termination and the achievement of
any applicable annual performance targets under the Bonus Program for the
fiscal year in which the termination occurs (such bonus, if any, shall be paid to
the Executive within thirty (30) days after the determination of the
achievement of the applicable performance targets),  (iii) expenses under Section 6 incurred to the date of
termination but not yet reimbursed to the Executive and (iv) any tax equalization
amount calculated under Section 5 hereof.

 

5

 

For the purposes of this
Agreement, “Good Reason” means the occurrence of any of the following without
the Executive’s written consent:  (i)
action by the Company that results in a material diminution in the Executive’s
position, authority, duties or responsibilities; (ii) the Company’s failure to
make any payment or provide any award or benefit to the Executive under this
Agreement pursuant to the terms hereof; or (iii) the Company’s breach of any
material term of this Agreement; provided that the Company shall have failed to
cure the deficiency that results in “Good Reason” within fifteen (15) business
days after receipt of written notice from the Executive specifying the nature
of the deficiency in  reasonable detail.

 

d)            Voluntary
Termination Without Good Reason.  The Executive may terminate his employment during the Term upon
thirty (30) days prior written notice to the Company without Good Reason.  If during the Term the Executive terminates
his employment without Good Reason, the Executive shall receive (i) any unpaid
Base Salary to the date of termination, (ii) expenses under Section 6 incurred
to the date of termination but not yet reimbursed to the Executive and (iii)
any tax equalization amount calculated under Section 5 hereof.

 

e)             Expiration of
Term.  Upon the expiration of the
Term specified in Section 1 (following delivery of a notice of non-renewal by
the Company or the Executive pursuant to Section 1) without an earlier
termination pursuant to this Section 10, this Agreement shall terminate without
further action by the Executive or the Company.  Upon such expiration, the Executive shall receive (i) any unpaid
Base Salary to the date of expiration, (ii) expenses under Section 6 incurred
to the date of expiration but not yet reimbursed to the Executive and (iii) any
tax equalization amount calculated under Section 5 hereof.

 

f)             Notice of
Non-Renewal.  The
delivery by the Executive or the Company of a notice of non-renewal pursuant to
Section 1 shall not be deemed a termination by the Company or the
Executive of the Executive’s employment with or without Cause or Good Reason.

 

11)           Indemnification.  In the event that any claim is asserted
against the Executive arising out of the performance of his duties under and in
accordance with this Agreement, or during the period from September 10, 2002 to
February 2, 2003 in which the Executive provided advisory services with regard
to the due diligence done by Cerberus and/or TenX Capital Partners or its affiliates
on Teleglobe, the Company shall indemnify and hold harmless the Executive with
respect thereto (except to the extent of the Executive’s gross negligence, or
willful misconduct) and shall provide legal representation to the Executive
with respect thereto at the Company’s or an affiliate or subsidiary of the
Company’s sole cost and expense, such counsel to be selected at the discretion
of Company, subject to the approval of the Executive which shall not be
unreasonably withheld.

 

12)           Disclosure.  The Executive shall disclose immediately to
the Company the existence of any relationship between the Executive and any
other entity that creates or may create a conflict of interest that may affect
the independent professional judgment of the Executive in carrying out his or
its duties under this Agreement.

 

6

 

13)           Representation.  The Executive expressly represents and
warrants to the Company that as of the date of his signing this Agreement that
he is not a party to any contract or agreement which will or may restrict in
any way his or its ability to fully perform his or its duties and
responsibilities under this Agreement.

 

14)           Governing Law.  This Agreement will be governed by and
construed in accordance with the laws of the province of Quebec, without giving
effect to the principles of conflicts of laws.

 

15)           Ownership of
Property.  All written materials,
records and documents made by the Executive or coming into his possession
before or during the Term concerning the Company or any of its affiliates or subsidiaries
and all tangible items provided to the Executive by the Company or any of its
affiliates or subsidiaries before or during the Term shall be the sole property
of the Company or any of its affiliates or subsidiaries, as applicable, and,
upon the termination of the Agreement or upon the request of the Company during
the Term, the Executive shall promptly deliver the same to the Company.

 

16)           Notices.  All notices and other communications that
are required or may be given under this Agreement must be in writing and will
be deemed to have been duly given when delivered in person, upon delivery by a
nationally recognized overnight courier service, or by facsimile to the party
to whom the notice is being given, as follows:

 

If
to the Company:

 

Teleglobe Canada ULC

1000, rue de La Gauchetiere
Ouest

Montreal (Quebec)  H3B 4X5

Canada

Attention:  Nicole Lemay

(514) 868-7606 telephone

(514) 868-7234 facsimile

 

with a copy to:

 

Cerberus Capital Management,
L.P.

299 Park Avenue

New York, New York  10171

Attention:  Lenard Tessler

(212) 909-1464 telephone

(212) 755-3009 facsimile

 

and

 

Attention:  Seth Plattus

(212) 891-2120

(212) 891-1541

 

7

 

with a copy to:

 

Schulte Roth & Zabel LLP

919 Third Avenue

New York, New York  10022

Attention:  Stuart D. Freedman, Esq.

(212) 756-2000 telephone

(212) 593-5955 facsimile

 

If
to the Executive:

 

To the Executive’s home
address set forth in the records of the Company.

 

Either party may change the address provided
above by delivering written notice of such change of address to the other
party.

 

17)           Assignability;
Successors.  This Agreement shall
inure to the benefit of and be binding upon the successors of the Company.  Neither the Executive nor the Company may
assign this Agreement without the express written consent of the other party;
provided, however, that the Company’s obligations under this Agreement shall be
the binding legal obligations of any successor of the Company, and, provided
further that, the Executive hereby agrees that the Company may assign this
Agreement to any of its affiliates or subsidiaries at any time without the
consent of the Executive.

 

18)           Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.

 

19)           Entire Agreement.  The Agreement contains the entire agreement
between the parties with respect to the subject matter of this Agreement and
supersedes all prior agreements and understandings, oral or written, between
the parties with respect to the subject matter of this Agreement.

 

20)           Waiver and
Amendments.  This Agreement may be
amended, modified, superseded, canceled, renewed or extended, and the terms and
conditions hereof may be waived, only by a written instrument signed by the
parties or, in the case of a waiver, by the party waiving compliance.  No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any right, power or privilege hereunder,
nor any single or partial exercise of any right, power or privilege hereunder,
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder.

 

21)           Severability.  In the event that any one or more of the
terms, conditions or provisions of this Agreement is held invalid, illegal or
unenforceable, that term, condition or provision shall be severed and the
remaining terms, conditions and provisions shall remain binding and effective.

 

8

 

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

 

	
   

  	
  TELEGLOBE CANADA ULC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerald Porter Strong

  
	
   

  	
  Name:

  	
  Gerald Porter Strong

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Richard Willett

  
	
   

  	
  RICHARD WILLETT

  

 

9

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