Document:

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                                                                   EXHIBIT 10.18

                              EMPLOYMENT AGREEMENT

                  THIS AGREEMENT, dated and effective the 22th day of March,
1999 (the "Effective Date") is made by and between Global TeleSystems Group,
Inc, a Delaware corporation (the "Company") and Robert Amman (the "Executive").

                                    RECITALS:

                  A. It is the desire of the Company to employ Executive as its
President and Chief Operating Officer ; and

                  B. Executive desires to commit to serve the Company on the
terms herein provided;

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

                  1.       Certain Definitions.

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

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

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

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

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

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

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

                               (iv) willful or grossly negligent commission of
                  any other act or failure to act which causes or may reasonably
                  be expected (as of the time of such occurrence) to cause
                  substantial economic injury to or substantial injury to the
                  reputation of the Company or any subsidiary or affiliate of
                  the Company,

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                  including, without limitation, any material violation of the
                  Foreign Corrupt Practices Act, as described herein below.

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

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

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

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

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

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

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                           (f) "Closing Price" shall mean the closing price in
         United States Dollars ("$") of a share of Company Stock on the
         principal exchange on which such shares are traded on the day in
         question; if such exchange is in the United States, as reported in the
         Wall Street Journal or, if such exchange is in Europe, as reported in
         the Financial Times, with such price converted to $ utilizing the mean
         of the bid and offered prices for $ in the local currency for the day
         in question as reported in the Wall Street Journal.

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

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

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

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

                           (k) "Contract Year" shall mean each twelve month
         period beginning on the Effective Date or an annual anniversary
         thereof.

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

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

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

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

                           (p) "Good Reason" shall mean any of the following
         events which is not cured by the Company within 15 days after written
         notice thereof is given to the Company by Executive: (i) any failure to
         pay Executive's Base Salary or Bonus when

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         due to Executive; (ii) any other material breach by the Company of any
         material term of this Agreement; or (iii) any material adverse change
         in Executive's job titles, duties, responsibilities, status, reporting
         responsibilities or perquisites granted hereunder, without Executive's
         consent. "Good Reason" shall cease to exist for an event on the 30th
         day following the later of its occurrence or Executive's knowledge
         thereof, unless Executive has given the Company notice thereof prior to
         such date.

                           (q) "Grant Date" shall mean the date on which the
         Committee acts to grant to Executive the Options described herein.

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

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

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

                           (u) "Stock Option Plan" shall mean Fourth Amended and
         Restated 1992 Stock Option Plan of Global TeleSystems Group, Inc. or
         any successor plan.

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

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

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

                  4.       Place of Performance. In connection with Executive's
employment during the Term, Executive shall initially be based at the Company's
principal executive headquarters in McLean, Virginia, USA but, upon obtaining
all necessary and appropriate authorizations, shall be seconded to the Company's
subsidiary, Global TeleSystems (UK) Ltd. ("GTS UK"), and be based at the
Company's executive offices in London, England, except for necessary travel on
the Company's business. Executive may be reassigned during the Term hereof to
another location identified as the principal executive or operations
headquarters of the Company in the Company's discretion.

                  5.       Compensation and Related Matters.

                           (a) Annual Base Salary. During the Term Executive
         shall receive a base salary at a rate of four hundred thousand dollars
         ($400,000) per annum (the "Annual

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         Base Salary"), less standard deductions, paid in accordance with the
         Company's general payroll practices for executives, but no less
         frequently than monthly. The Annual Base Salary shall compensate
         Executive for any official position or directorship that Executive is
         asked to hold in the Company or its affiliates as a part of Executive's
         employment responsibilities. No less frequently than annually during
         the Term, the Committee on advice of the Company's Chief Executive
         Officer shall review the rate of Annual Base Salary payable to
         Executive, and may, in their discretion, increase the rate of Annual
         Base Salary payable hereunder; provided, however, that any increased
         rate shall thereafter be the rate of "Annual Base Salary" hereunder.

                           (b) Bonus. Except as otherwise provided for herein,
         for each fiscal quarterly compensation period (or other period
         consistent with the Company's then-applicable normal employment
         practices) during which Executive is employed hereunder on the last
         day, Executive shall be eligible to receive a Bonus in an amount up to
         one-quarter (or other pro-rata portion as appropriate) of 100% of
         Executive's Base Salary pursuant to, and as set forth in, the terms of
         the GTS Senior Executive Bonus Plan as such Plan may be amended from
         time to time, plus such other bonus payments, if any, as shall be
         determined by the Compensation Committee in its sole discretion.

                           (c) Stock Options. The Company has granted to
         Executive options to purchase 350,000 shares of the Company's common
         stock pursuant to the terms of the Stock Option Plan and an associated
         Stock Option Agreement (such grant to be referred to herein as the
         "Initial Option Grant" and such options to be referred to herein as the
         "Initial Options"). The Company may grant Executive additional stock
         options (when aggregated with the Initial Options, the "Options"), in
         an amount, and on terms, to be determined by the Committee in its sole
         discretion (after consultation with Executive). All Options shall

                               (i) have an exercise price equal to the Closing
                  Price on the Grant Date;

                               (ii) be granted pursuant to and subject to the
                  terms of the Stock Option Plan; and

                               (iii) be subject to the terms of an option
                  agreement containing the above terms, and other terms
                  substantially similar to the terms generally provided in the
                  option agreements of the Company's other senior managers
                  (except as otherwise modified herein).

                           (d) Benefits. Executive shall be entitled to receive
         such benefits and to participate in such employee group benefit plans,
         including life, health and disability insurance policies, financial
         planning services and other benefits as are generally provided by the
         Company to its executives of comparable level and responsibility in
         accordance with the plans, practices and programs of the Company.
         Executive shall be provided with financial planning services as per
         Company practice for senior executives.

                           (e) Expenses. The Company shall reimburse Executive
         for all

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         reasonable and necessary expenses incurred by Executive in connection
         with the performance of Executive's duties as an employee of the
         Company. Such reimbursement is subject to the submission to the Company
         by Executive of appropriate documentation and/or vouchers in accordance
         with the customary procedures of the Company for expense reimbursement,
         as such procedures may be revised by the Company from time to time
         hereafter.

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

                           (g) Benefits Upon Secondment. If and when Executive
         is seconded to GTS UK, he shall be entitled to receive the additional
         housing, travel, car allowance and other benefits set forth and
         described in Attachment A hereto.

                  6.       Termination.

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

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

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

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

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

                               (v) Without Cause. The Company may terminate
                  Executive's employment hereunder without Cause after giving
                  Executive at least ninety (90) days written notice (the
                  "Company Notice Period").

                               (vi) Resignation without Good Reason. Executive
                  may resign Executive's employment without Good Reason after
                  giving the Company at least 180 days written notice
                  ("Executive's Notice Period").

                           (b) Notice of Termination. Any termination of
         Executive's

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

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

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

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

                               (i) pay to Executive (A) all base Salary due for
                  the period prior to termination and the prorated portion of
                  the unpaid Bonus to which Executive would otherwise be
                  entitled for the compensation period during which the
                  Termination occurred, plus (B) either a lump sum cash payment
                  as soon as practicable following the Date of Termination, or,
                  in the Company's discretion, in installments in accordance
                  with the Company's normal payroll practices an amount equal to
                  two (2) times Executive's then-current rate of Annual Base
                  Salary;

                               (ii) to the extent permitted by law and the
                  provisions of the applicable plans, the Company shall also
                  continue to provide Executive with all employee benefits and
                  perquisites which Executive was participating in or receiving
                  at the time of the termination of employment until the earlier
                  of two years from the Date of Termination or Executive's
                  receipt of comparable benefits from a successor employer; and

                               (iii) accelerate the vesting of that number of
                  the Initial Options sufficient to result, when aggregated with
                  all Initial Options that were vested prior to the time of
                  termination, in Executive's having vested Initial Options to
                  acquire

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                  (A) 50,000 shares of the Company's common stock; plus (B)
                  8,333 shares of the company's common stock or each full month
                  that Executive was employed by the Company (other than solely
                  as a director) after the effective date of this Agreement
                  prior to termination.

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

                           (c) Resignation by Executive Without Good Reason. If
         Executive resigns from the Company at any time without Good Reason,
         that Company shall pay to Executive all base Salary due for the period
         prior to termination, and at the time of Termination shall accelerate
         the vesting of unvested Initial Options in an amount sufficient to
         result, when aggregated with all Initial Options that were vested prior
         to the time of Termination, in Executive's having vested Initial
         Options to acquire 50,000 shares of the Company's common stock plus
         8,333 shares of the Company's common stock for each full month (i) that
         Executive was employed by the Company (other than solely as a director)
         after the effective date of this Agreement prior to termination, and
         (ii) during Executive's Notice Period to the degree Executive is not
         employed by the Company during such Executive Notice Period.

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

                           (e) Mitigation of Damages. In the event of any
         termination of Executive's employment by the Company, Executive shall
         not be required to seek other employment to mitigate damages, and any
         income earned by Executive from other employment or self-employment
         shall not be offset against any obligations of the Company to Executive
         under this Agreement.

                  8.       Competition.

                           (c) Executive shall not, at any time during the Term,
         or for one year thereafter,

                           (d) without the prior written consent of the Board,
         directly or indirectly through any other person or entity:

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

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

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

                           (e) Executive shall not at any time:

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

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

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

                           (g) In the event any agreement in this Section 8
         shall be determined by any court of competent jurisdiction to be
         unenforceable by reason of its extending for too great a period of time
         or over too great a geographical area or by reason of its being too
         extensive in any other respect, it will be interpreted to extend only
         over the maximum period of time for which it may be enforceable, and/or
         over the maximum geographical area as to which it may be enforceable
         and/or to the maximum extent in all other respects as to which it may
         be enforceable, all as determined by such court in such action.

                  9.       Injunctive Relief. It is recognized and acknowledged
by Executive that a breach of the covenants contained in Section 8 hereof will
cause irreparable damage to the Company and its goodwill, the exact amount of
which will be difficult or impossible to ascertain, and that the remedies at law
for any such breach will be inadequate. Accordingly, Executive agrees that in
the event of a breach of any of the covenants contained in Section 8 hereof, in
addition to any other remedy which may be available at law or in equity, the
Company will be entitled to specific performance and injunctive relief.

                  10.      Non-Disparagement of Executive. The Company shall not
make any oral or written statement about Executive which is intended or
reasonably likely to disparage Executive or otherwise degrade Executive's
reputation in the business or legal community or in the telecommunications
industry.

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

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

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

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

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

         If to the Company:      GTS Group, Inc.
                                 C/o Global TeleSystems Group, Inc.
                                 Attn.: Senior Vice President, Human Resources
                                 1751 Pinnacle Drive
                                 North Tower 12th Floor
                                 McLean, VA  22102  USA

         If to Executive:        to Executive at the address set forth below
                                 under Executive's signature.

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

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

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

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

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

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

                                       12
<PAGE>   13

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

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

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

                                   GLOBAL TELESYSTEMS GROUP, INC.

                                   By: /s/ H. Brian Thimpson
                                      -------------------------------------
                                   Name: H. Brian Thompson
                                   Title: Chairman and Chief Executive Officer

                                   EXECUTIVE

                                       /s/ Robert Amman
                                   -------------------------------------
                                   Robert Amman
                                   309 Blackland Road, N.W.
                                   Atlanta, GA 30342

                                       13
<PAGE>   14

                                  ATTACHMENT A

         Upon transfer to the U.K., the Executive is eligible for the following
expatriate benefits:

[X]      Relocation of Executive and spouse to the U.K.

[X]      Use of a furnished corporate apartment in the Greater London area

[X]      Car allowance in line with local UK practice (presently UK PD 20,000
         gross per annum, paid in monthly installments)

[X]      A cost differential to base salary in consideration of the London
         market

[X]      A net relocation payment equal to three months' base salary

[X]      Tax return preparation for the U.S. and U.K. for the years relevant to
         foreign assignment(s)

[X]      Repatriation of Executive and spouse to Atlanta, Georgia upon
         completion of assignment in U.K.

               NOTE:

               Executive has elected to forego the cost differential and the net
               relocation payment in consideration of receiving the use of a
               central London corporate apartment.+

                                       14<PAGE>   1
                                                                   EXHIBIT 10.19

                              EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT, is made and entered into as of the third day of
January, 1995, by and between SFMT, Inc., a Delaware corporation (the
"Corporation"), and Gerard J. Caccappolo (the "Employer").

                              W I T N E S S E T H:

         WHEREAS, the Employee has substantial experience in the
telecommunications industry in soles and marketing; and

         WHEREAS, the Corporation desires to employ the Employee, and the
Employee desires to be employed by the Corporation, in accordance with the terms
and provisions herein contained;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein set forth, the parties hereto, intending to be legally bound,
hereby agree as follows:

1.       Employment

         (a)      The Corporation hereby employs the Employee, and the Employee
                  hereby accepts such employment, on the terms, and subject to
                  the conditions herein contained.

         (b)      The Employee shall be secondment agreement be assigned to work
                  at SFMT-Hermes ("SFMT-Hermes"), a subsidiary of the
                  Corporation, or Hermes Europe Railtel B.V. ("Hermes Europe"),
                  a subsidiary of SFMT-Hermes, as the Vice President and
                  Director of Sales and Marketing of Hermes Europe. In his
                  capacity as Vice President and Director of Sales and Marketing
                  of Hermes Europe, the Employee shall report to and shall
                  perform such duties and exercise such power and authority as
                  may from time to time be delegated to him by Managing Director
                  of Hermes Europe.

         (c)      The Employee shall devote all of his business time and
                  attention and his best efforts to the performance of his
                  duties pursuant to this Employment Agreement.

         (d)      Initially, the Employee shall be required to reside in
                  Brussels and work from the Corporation's or Hermes' offices in
                  Brussels. The Corporation reserves the right to require that
                  the Employee will move to and reside in and operate from the
                  offices of the Corporation's or Hermes Europe in another city
                  within the region in which Hermes Europe operates.

<PAGE>   2

2.       Term. The initial term of the employment of the Employee under this
         Employment Agreement shall be two (2) years, commencing on January 3,
         1995, and continuing, unless sooner terminated pursuant to Section 9 to
         and including January 2, 1997. Thereafter this Agreement shall be
         automatically renewed annually for successive one year periods, unless
         either party hereto shall deliver written notice in accordance with
         Section 9 to the other party at least three (3) months prior to the
         date of termination of the initial term or any extension or renewal
         thereof (the "Term") of its desire to terminate such employment (a
         "Notice of Termination").

3.       Compensation.

         (a)      During the initial Term, the Employee shall be paid a salary
                  at the rate of One Hundred Sixty Thousand Dollars ($160,000)
                  per annum, payable in accordance with the Corporation's
                  customary payroll practices for employees.

         (b)      Thereafter, at the end of each year Chief Executive Officer of
                  the Corporation shall review the salary of the Employee, and
                  shall make such adjustments to such salary as the Chief
                  Executive Officer shall, in its sole and absolute discretion,
                  deem appropriate.

         (c)      For the purposes of this Agreement, "Salary" shall mean any
                  payment by the corporation to the Employee pursuant to this
                  Section 3.

4.       Bonus.

         (a)      After the Employee has been employed by the Corporation for a
                  period of eighteen (18) months, and as additional compensation
                  to the Employee hereunder, the Employee will be assessed for
                  eligibility to receive a discretionary bonus (the "Bonus) in
                  respect of the initial employment period. Subject to the
                  provisions of Section 4(b), the initial target for such Bonus,
                  based on the achievement by Hermes Europe of the objectives
                  shall be thirty percent (30%) of the Salary of the Employee
                  earned during the initial employment period. The first bonus
                  shall be in respect of two years (the "Initial Bonus"),
                  payable in accordance with Section 4(c). The potential Initial
                  Bonus shall be subject to the achievement of the performance
                  objectives set forth in the approved Hermes Europe Business
                  Plan.

         (b)      The formula or other method for determining the Bonus for the
                  Employee in each subsequent fiscal year shall be determined by
                  the Corporation and shall be based upon the performance of
                  Hermes Europe in such fiscal year

<PAGE>   3

                  as compared with the Hermes Europe approved business plan for
                  such fiscal years. The amount of the Bonus paid to the
                  Employee in respect of any fiscal year of the Corporation
                  shall be subject to the sole and absolute discretion of Chief
                  Executive Officer of the Corporation. The objectives for each
                  fiscal year and the amount of bonus for successful completion
                  of objectives (as a percentage of base salary or other formula
                  declared for the period) shall be established during the
                  period between twelve (12) and fifteen (15) months period to
                  the fiscal year for which such objectives apply (e.g., October
                  1 - December 31, 1994 for fiscal year 1996).

         (c)      All Bonuses in respect of any fiscal year of the Hermes Europe
                  shall be paid within thirty (30) days after the issuance of
                  the audited financial statements of Hermes Europe for such
                  fiscal year.

5.       Equity Participation.

         (a)      SFMT-Hermes has adopted a Stock Option Plan (the "Option
                  Plan") for its senior executives. Subject to the provisions of
                  the Plan, SFMT-Hermes shall grant to the Employee options to
                  purchase shares of Capital Stock of SFMT-Hermes ("Capital
                  Stock"). The number of shares of Capital Stock which shall be
                  subject to the option shall be an amount equal to one and
                  one-half percent (1.5%) of the outstanding shares of
                  SFMT-Hermes to be determined at January 2, 1996. The options
                  granted to the Employee shall be granted and vest as follows:

                  (i)      options to purchase 33.33% (one-third) of the shares
                           of Capital Stock shall be granted on January 3, 1996
                           and vest as at the close of business on January 2,
                           1997;

                  (ii)     options to purchase 33.33% (one-third) of the shares
                           of Capital Stock shall be granted on January 3, 1997
                           and vest as at the close of business of January 2,
                           1998; and

                  (iii)    options to purchase 33.33% (one-third) of the shares
                           of Capital Stock shall be granted on January 3, 1998
                           and vest as at the close of business on January 2,
                           1999.

6.       Benefits.

         (a)      During the Term, the Employee shall be entitled to receive
                  such benefits and to participate in such employee group
                  benefit plans as are generally provided by the Corporation, or
                  made available by the Corporation, to its executive officers,
                  including without limitation, but subject to the

<PAGE>   4

                  conditions imposed by the carriers, any medical, health,
                  disability and life insurance policies.

         (b)      During the Term, the Corporation or Hermes Europe shall
                  provide to the Employee, at the Corporation's expense, use of
                  a late model automobile appropriate in the geographic location
                  of Employee's residence, and acceptable to the Corporation.

         (c)      During the Term, the Corporation or Hermes Europe shall
                  provide business class transportation to and from the United
                  States for one trip per annum for Employee and Employee's
                  immediate family living with Employee in Brussels.

         (d)      During the initial first two (2) years of the Term, the
                  Corporation or Hermes Europe shall provide to the Employee a
                  furnished residence in Brussels. The Corporation or Hermes
                  Europe shall provide for the relocation of Employee's
                  household goods to Brussels from their location in either
                  Paris or New Jersey; provided, Employee notifies the
                  Corporation in writing prior to January 2, 1996 of Employee's
                  election to have such household goods moved; provided,
                  further, that neither the Corporation nor Hermes Europe shall
                  provide for the relocation of Employee's household goods if
                  either the Corporation or Employee provides a Notice of
                  Termination in accordance with Section 2 of this Agreement on
                  or before July 2, 1996, or the employment of the Employee is
                  otherwise terminated. In the event that Employee elects to
                  have his household goods moved, the Corporation or Hermes
                  Europe shall provide an unfurnished apartment in the city in
                  which Employee is required to reside. Any relocation costs and
                  expenses shall be in accordance with the Corporation's
                  policies for relocation expenses; provided, however, that such
                  costs and expenses shall not exceed Employee's Salary for one
                  month.

         (e)      The Corporation or Hermes Europe shall pay to the Employee
                  during the Term an amount per annum as shall compensate the
                  Employee for tax equalization in connection with the
                  requirement that the Employee reside outside the United States
                  for so long as the Employee is required to live outside the
                  United States. Such tax equalization shall apply to Salary and
                  Bonus and any other payments made to Employee deemed taxable
                  in the foreign jurisdiction where Employee is required to
                  reside. SFMT will also be responsible for the preparation and
                  filing of your domestic and international income taxes.

         (f)      The Employee shall be paid an amount equal to Seven percent
                  (7%) of the Employee's Salary as a cost of living adjustment
                  in connection with

<PAGE>   5

                  requirement that the Employee reside in Brussels for so long
                  as the Employee is required to live in Brussels.

7.       Expense Reimbursement.

         (a)      During the Term, the Corporation shall reimburse the Employee
                  for all reasonable expenditures actually and necessarily paid
                  or incurred by the Employee in the course of and pursuant to
                  the business of the Corporation. Such reimbursement shall be
                  subject to the submission to the Corporation by the Employee
                  of appropriate documentation and/or vouchers, and shall be
                  made in accordance with the customary procedures of the
                  Corporation for expense reimbursement, as may from time to
                  time be established.

         (b)      Should the Corporation provide Employee with a credit card,
                  Employee acknowledges complete personal responsibility for all
                  charges made on such credit card. Any charges received by the
                  Corporation for expenses not documented on a approved expense
                  report may be deducted by the Corporation from the Executives
                  payroll check. Upon termination of this Agreement, non
                  approved charges shall be deducted from the last payroll check
                  issued to the Employee.

8.       Vacation. In each fiscal year of the Corporation during the Term, the
         Employee shall be entitled to Four (4) weeks vacation time, which shall
         not be cumulative from year to year without the prior written consent
         of the Corporation or unless the Employee shall be unable to take such
         vacation due to Employee's duties under this Agreement; provided,
         however, that to the extent the Employee cannot take vacation time
         during the Term due to his responsibilities under this Agreement, upon
         termination, Employee shall be entitled to be compensated for accrued
         but unused vacation time.

9.       Termination.

         (a)      Notwithstanding anything to the contrary contained in this
                  Agreement, the Corporation shall at all time have the right to
                  terminate this Agreement and the employment of the Employee
                  hereunder for "Cause" by written notice to the Employee in
                  accordance with Section 15. For the purpose of this Agreement,
                  the term "Cause" shall mean any action of the Employee or any
                  failure to act by the Employee which constitutes:

                  (i)      fraud, embezzlement or any felony in connection with
                           the Employee's duties as an executive officer of the
                           Corporation or any subsidiary or affiliate of the
                           Corporation, or willful misconduct or the commission
                           of any other act which causes or may reasonably be
                           expected to cause substantial economic or

<PAGE>   6

                           reputational injury to the Corporation or any such
                           subsidiary or affiliate of the Corporation, including
                           any violation of the Foreign Corrupt Practices Act,
                           as described in Section 13 of this Agreement;

                  (ii)     continuing conflict of interest or continuing failure
                           to follow reasonable directions or instructions of
                           the Board of Directors or Chief Executive Officer of
                           the Corporation. A conflict of interest or a failure
                           to follow directions of the Board of Directors or the
                           Chief Employee Officer of the Corporation shall be
                           deemed to be continuing if the Employee shall have
                           received written notice thereof and shall have not
                           terminated the conflict of interest or failure to
                           follow directions within Thirty (30) days after
                           receipt of such notice; or

                  (iii)    an extended period of absence by the Employee from
                           the performance of the obligations of the Employee
                           provided hereunder; which absence shall be for a
                           reason other than a disability, and which has not
                           been approved in writing advance by the Board of
                           Directors or the Chief Employee Officer of the
                           Corporation.

         (b)      Notwithstanding anything to the contrary contained in this
                  Agreement, the Corporation, by written notice to the Employee,
                  shall at all times have the right to terminate this Agreement
                  and the employment of the Employee hereunder if the Employee
                  shall experience a "Total Disability." For the purpose of this
                  Agreement, the term "Total Disability" shall mean any mental
                  or physical illness, condition, disability or incapacity as
                  shall:

                  (i)      prevent the Employee form reasonably discharging his
                           services and employment duties hereunder;

                  (ii)     be attested to in writing by a physician acceptable
                           to the Corporation; and

                  (iii)    continue during any period of Three (3) consecutive
                           months or for periods aggregating three months in any
                           twelve-month period.

         A Total Disability shall be deemed to have occurred on the last day of
         such applicable three-month period.

         (c)      This Agreement shall terminate automatically upon the date of
                  the death of the Employee.

<PAGE>   7

10.      Payments upon Termination.

         (a)      If the Corporation shall terminate the employment of the
                  Employee under this Agreement pursuant to Section 9(a) hereof,
                  or if the employment of the Employee hereunder shall be
                  terminated by the Employee other than in accordance with
                  Section 2 hereof, then, in any such event, the Corporation
                  shall have no obligation to pay to the Employee his Salary or
                  any other compensation or benefits provided under this
                  Agreement for any period after the date of such termination
                  and the reimbursement of all expenses incurred by the Employee
                  prior to the date of such termination in accordance with
                  Section 7 hereof. Upon a termination pursuant to Section 9(a)
                  or by the Employee, all options and restricted shares granted
                  to Employee pursuant to Section 5 shall immediately be
                  canceled and no further options shall vest.

         (b)      If the employment of the Employee hereunder shall terminate
                  pursuant to Sections 9(b) or (c) hereof, if the employment of
                  the Employee shall be terminated by the Corporation in
                  accordance with Section 2 hereof, or if the Employee shall be
                  terminated by the Corporation other than in accordance with
                  the provisions of this agreement, the Corporation shall pay to
                  the Employee or his Estate, as the case may be, the Salary and
                  Bonus for the fiscal year in which such termination occurs,
                  prorated for the number of weeks during which the Employee was
                  employed by the Corporation during such fiscal year.

         (c)      In the event that the Corporation terminates the employment of
                  the Employee by delivering notice in accordance with Section
                  2, or for any reason other than those set forth in Section 9
                  above, the Employee shall receive as severance an amount equal
                  to the greater of (i) three (3) months salary, and (ii) the
                  amount of salary that would have been payable to the Employee
                  from the date of Notice of Termination until the end of the
                  Term, had the Corporation not delivered such Notice of
                  Termination. Such severance pay shall be paid in equal monthly
                  installments, commencing, the month following such
                  termination, and shall be payable in accordance with the
                  Corporation's customary practices for employees.

         (d)      In the event that the employment of the Employee is terminated
                  due to a Total Disability or the death of the Employee in
                  accordance with Section 9(b) or 9(c) hereof, then the Employee
                  or his designated beneficiary, as the case may be, shall be
                  entitled to receive such amounts as are provided for in any
                  disability policy of life insurance policy provided by the
                  Corporation for the benefit of the Employee.

<PAGE>   8

11.      Covenants of the Employee. In order to induce the Corporation to enter
         into this Agreement and employ and Employee hereunder, the Employee
         hereby covenants and agrees as follows:

         (a)      During the Term and for a period of twelve (12) months
                  thereafter, the Employee shall not, without the prior written
                  consent of the Corporation:

                  (i)      directly or indirectly acquire or own in any manner
                           any interest in any person, firm, partnership,
                           corporation, association or other entity which
                           competes with the Corporation or any of its
                           affiliates; or

                  (ii)     be employed by, or serve as an employee, agent,
                           officer, director of, any person, firm, partnership,
                           corporation association which competes with the
                           Corporation or any of its affiliates or subsidiaries.

         (b)      The Employee shall not at any time, other than in the ordinary
                  course of business of the Corporation, when and if required,
                  disclose, directly or indirectly, to any person, firm,
                  corporation, partnership, association or other entity, any
                  confidential information relating to the Corporation or any of
                  its affiliates or subsidiaries, or any information concerning
                  the financial condition, suppliers customers, lessors,
                  lessees, sources of leads for and methods of obtaining new
                  business or the methods generally of doing and operating the
                  respective businesses of the Corporation, its affiliates and
                  subsidiaries, except to the extent that such information is a
                  matter of public knowledge or is required to be disclosed by
                  law or judicial or administrative process.

         (c)      During the Term and for a period of twelve (12) months
                  thereafter, the Employment shall not, without the prior
                  written consent of the Corporation, directly or indirectly
                  through any other individual or entity:

                  (i)      solicit, entice, persuade or induce any individual
                           who currently is, or at any time during the Term
                           shall be, an employee of the Corporation, or any of
                           its affiliates, to terminate or refrain from renewing
                           or extending such person's employment with the
                           Corporation or such subsidiary or affiliate, or to
                           become employed by or enter into contractual
                           relations with any other individual or entity, and
                           the Employee shall not approach any such employee for
                           any such purpose or authorize or knowingly cooperate
                           with the taking of any such actions by any other
                           individual or entity; or

<PAGE>   9

                  (ii)     except in accordance with the Employee's duties
                           hereunder on behalf of the Corporation, solicit,
                           entice, persuade, or induce any individual or entity
                           which currently is, or at any time during the Term
                           shall be, a customer, supplier, lessor or lessee of
                           the corporation, or any of its subsidiaries of
                           affiliates, to terminate or refrain from renewing or
                           extending its contractual or other relationship with
                           the Corporation or such subsidiary or affiliate, and
                           the Employee shall not approach any such customer,
                           supplier, lessor or lessee for such purpose or
                           authorize or knowingly cooperate with the taking of
                           any such actions by any other individual or entity.

12.      Specific Performance. The Employee acknowledges that a breach or
         violation by the Employee of the covenants or agreements contained in
         Section 11 of this Agreement would cause irreparable harm and damage
         tot he Corporation if such provisions are not specifically enforced,
         the monetary amount of which would be impossible to ascertain.
         Therefore, the performance and to obtain an injunction from any court
         of competent jurisdiction enjoining and restraining any breach or
         violation of any or all of the covenants and agreements contained in
         Section 11 of this Agreement by the Employee and/or his employees,
         associates, partners or agents, or entities controlled by one or more
         of them, either directly or indirectly. Such remedies shall be
         cumulative and not exclusive and shall be in addition to whatever other
         rights or remedies the Corporation shall have for damages for a breach
         by the Employee of the covenants or agreements contained in Section 11
         or elsewhere in this Agreement.

13.      Foreign Corrupt Practices Act. The Employee agrees to comply in all
         respects with the U.S. Foreign Corrupt Practices Act of 1977 (the
         "FCPA"), as amended, which provides generally that: under no
         circumstances will foreign officials, representatives, political
         parties or holders of public offices be offered, promised or paid any
         money, remuneration, things of value, or provided any other benefit,
         direct or indirect, in connection with obtaining or maintaining
         contracts or orders hereunder. The Executive's failure to comply in all
         respects with the provisions of the FCPA shall constitute a material
         breach by him of his obligations hereunder and shall entitle SFMT to
         terminate this Agreement immediately. A copy of the Corporation's FCPA
         policy is annexed hereto as Exhibit A.

14.      No Delegation. The Employee shall not delegate his employment
         obligations under this Agreement to any other person.

15.      Notices. Any notice required or permitted to be given under this
         Agreement shall be in writing and sent by facsimile, with appropriate
         confirmation of receipt, certified mail, return receipt requested, or
         overnight courier to the following addresses:

<PAGE>   10

                  If to the Corporation:    SFMT, Inc.
                                            477 Madison Avenue, 8th Floor
                                            New York, New York  10022
                                            Attention:  General Counsel
                                            Fax:  212-371-9552

                  If to the Employee        1 Highview Terrace
                                            Madison, New Jersey  07940

Either party may change the address to which notices, requests, demands and
other communications to such party shall be delivered personally or mailed by
giving notice thereof to the other party hereto in the manner herein provided.
Notices shall be deemed given at the time of receipt.

16.      Deductions and Withholding. The Employee acknowledges and agrees that
         the Company shall be entitled to withhold from the Employee's
         compensation hereunder, including Salary and Bonus and other payments
         made pursuant to the Agreement, all applicable taxes that are due to
         the appropriate jurisdictions, and pay this withholding to the
         appropriate tax authorities, consistent with the tax equalization
         treatment described in Section 6(e) herein. Tax equalization, applied
         in the context of monthly withholding, shall be reconciled at year end.

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

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

19.      Severability. In case any one or more of the provisions of this
         Agreement shall be held by any court of competent jurisdiction so be
         illegal, invalid or unenforceable in any respect such provision shall
         be of no force and effect, but the illegality, invalidity or
         unenforceability of such provision shall have no effect upon

<PAGE>   11

         and shall not impair the enforceability of any other provision of this
         Agreement, but this Agreement shall be construed as if such illegal,
         invalid or unenforceable provision had never been contained herein.

20.      Governing Law. This Agreement shall be governed by and construed in
         accordance with the laws of the State of New York applicable to
         contracts made and to be performed entirely within New York.

21.      Arbitration. Any and all disputes, controversies and claims arising out
         of or relating to this Agreement, shall be settled and determined by
         arbitration conducted before a panel of three arbitrators in New York
         in accordance with the rule of the American Arbitration Association
         then in effect. The arbitrators' award shall be final and binding upon
         the Corporation and the Employee, and judgment confirming such
         arbitration may be entered thereon in any court having jurisdiction
         over such proceedings.

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

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

         IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.

                                              SFMT, INC.

                                              by: /s/ Neil Molberger
                                                 -------------------------------

                                                  /s/ Gerard J. Caccappolo
                                                 -------------------------------
                                                 Gerard J. Caccappolo

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