VIATEL INC
PRENETTA EMPLOYMENT AGREEMENT
<DOCUMENT>
<TYPE>EX-10.45
<SEQUENCE>12
<FILENAME>0012.txt
<DESCRIPTION>PRENETTA EMPLOYMENT AGREEMENT
<TEXT>




                                                                   EXHIBIT 10.45
                              EMPLOYMENT AGREEMENT

         This EMPLOYMENT AGREEMENT  ("Agreement") is made and entered into as of
June 1, 2000 by and between Viatel,  Inc., a Delaware corporation with an office
at 685 Third  Avenue,  New York,  New York 10017 (the  "Company"),  and JAMES P.
PRENETTA, an individual currently residing at 190 Canterbury Lane, Fairfield, CT
06432 (the "Executive").

                              W I T N E S S E T H:

         WHEREAS,  the Company desires to employ Executive and Executive desires
to be employed by the Company.

         NOW THEREFORE,  each of the Company and the Executive,  intending to be
legally bound, hereby mutually covenant and agree as follows:


                                    ARTICLE I

                                   DEFINITIONS

         The following  terms used in this Agreement shall have the meanings set
forth below.

         1.1 "Accrued  Obligations"  shall mean, as of the Date of  Termination,
the sum of Executive's  aggregate accrued but unpaid (A) Base Salary,  (B) Bonus
Award, (C) other cash compensation and (D) vacation pay, expense  reimbursements
and other cash entitlements, all determined through the Date of Termination.

         1.2 "Base  Salary"  shall  mean the  amount  set forth in  Section  3.1
hereof.

         1.3 "Bonus  Award" shall mean a cash bonus equal to fifty percent (50%)
of the  Executive's  Base  Salary  multiplied  by the  Bonus  Multiple  for  the
applicable Performance Year.

         1.4 "Bonus  Multiple" shall mean the amount  determined by reference to
Section 3.2 hereof.

         1.5 "Cause" shall mean  Executive's  (i) material  violation of Section
2.3 hereof,  which  violation has not been cured within 15 days of the date that
written  notice  thereof is received by Executive from the Board of Directors of
the Company (the "Board"); (ii) material violation of Section 4.1 or 4.2 hereof;
(iii)  violation of Section 4.3 hereof;  (iv) gross  negligence or dishonesty in
the  performance  of  Executive's  duties  hereunder or habitual  neglect in the
performance of Executive's duties; provided,  however, that the Board undertakes
a comprehensive  review and determines that such conduct is materially injurious
or materially  damaging to the Company or its  reputation;  or (v) conviction of
any felony or a misdemeanor involving fraud, misrepresentation or dishonesty.

         1.6  "Change of Control" is defined to mean such time as (i) a "person"
or "group"  (within the meaning of Sections  13(d) and  14(d)(2) of the Exchange
Act),  becomes the ultimate  "beneficial  owner" (as defined in Rule 13d-3 under
the  Exchange  Act) of more  than  50% of the  total  voting  power  of the then
outstanding  Voting  Stock  of the  Company  on a fully  diluted  basis  or (ii)



<PAGE>

individuals who at the beginning of any period of two consecutive calendar years
constituted  the Board  (together  with any new directors  whose election by the
Board or  whose  nomination  for  election  by the  Company's  stockholders  was
approved by a vote of at least two-thirds of the members of the Board then still
in office who either were  members of the Board at the  beginning of such period
or whose election or nomination  for election was previously so approved)  cease
for any  reason to  constitute  a majority  of the  members of the Board then in
office.

         1.7 "Code" shall mean the Internal Revenue Code of 1986, as amended.

         1.8 "Common Stock" shall mean the common stock, par value $.01 a share,
of the Company.

         1.9  "Competitive  Activities"  shall  have the  meaning  set  forth in
Section 4.3 hereof.

         1.10  "Confidential  Material"  shall  have the  meaning  set  forth in
Section 4.2 hereof.

         1.11  "Control"  (including,   with  correlative  meanings,  the  terms
"controlling,"  "controlled by," and "under common control with"),  as used with
respect to any Person, shall mean the possession, directly or indirectly, of the
power to direct or cause the  direction  of the  management  or policies of such
Person,  whether  through  ownership  of  voting  securities,   by  contract  or
otherwise.

         1.12 "Date of  Termination"  shall mean (i) if employment is terminated
for Disability,  thirty (30) days after Notice of Termination is given (provided
that  Executive  shall  not  have  returned  to  the  full-time  performance  of
Executive's  duties  during such thirty (30) day period),  and (ii) in all other
cases, the date specified in the Notice of Termination  (which shall not be less
than thirty (30) nor more than sixty (60) days, respectively, from the date such
Notice of Termination is given).

         1.13 "Disability"  shall mean Executive's death or inability to perform
his material duties to the Company by reason of a physical or mental disability,
which inability has existed for at least six consecutive months. Any question as
to the existence of a Disability  shall be  determined by a qualified  physician
not  employed  by  the  Company  and  selected  by  Executive  (or a  member  of
Executive's   immediate  family)  and  approved  by  the  Company.  The  written
determination of such physician shall be conclusive for all purposes relating to
this Agreement.

         1.14  "Disability  Payment"  shall mean, for purposes of Section 5.3(d)
hereof,  an amount  equal to the greater of (i) 60% of the Base Salary in effect
for the  calendar  year in which such  Disability  occurred (or the average Base
Salary if such  Disability  occurred over more than one calendar  year) and (ii)
the amount  payable to  Executive  under any  disability  plan as adopted by the
Company from time to time (the "Disability Plan").

         1.15 "EBITDA" shall mean, with respect to the Company on a consolidated
basis for any  Performance  Year,  the Company's  consolidated  earnings  before
interest,  taxes, preferred stock dividends,  depreciation and amortization,  as
such is reported in the Company's financial statements.

         1.16 "Exchange Act" shall mean the Securities  Exchange Act of 1934, as
amended.



                                       2
<PAGE>

         1.17 "Good  Reason" shall mean any (i)  reduction in  Executive's  Base
Salary,  (ii)  failure  by the  Company  to  continue  any  material  benefit or
compensation  plan,  life insurance plan,  health and accident plan,  disability
plan (or plan providing Executive with substantially  similar benefits) in which
Executive  is  participating  or  the  material  reduction  by  the  Company  of
Executive's benefits under any such plan, (iii) failure by the Company to obtain
an assumption of this Agreement by any successor of the Company (as contemplated
in Section 6.2 hereof),  (iv)  material  diminution  in  Executive's  authority,
function or position with the Company which  continues after 15 days of the date
that  written  notice  thereof  is  given  to the  Board  by  Executive,  or (v)
relocation of  Executive's  office by more than fifteen miles from the Company's
midtown Manhattan office.

         1.18 "Intellectual  Property" shall mean any idea, process,  trademark,
service mark, trade or business secret, invention,  technology, computer program
or hardware, original work of authorship,  design, formula, discovery, patent or
copyright,  application,  record,  design, plan or specification and any related
improvement, right or claim.

         1.19 "Notice of  Termination"  shall mean a written  notice as provided
herein.

         1.20  "Participation,"  including with correlative  meanings,  the term
"participate,"   shall  mean  the  direct  or  indirect   participation  in  any
Competitive Activity, whether as an operator,  manager,  consultant, and whether
individually or jointly.

         1.21 "Payment" shall mean any payment or distribution  (or acceleration
of  benefits)  by the Company to or for  Executive's  benefit  (whether  paid or
payable or distributed or distributable  (or accelerated)  pursuant to the terms
of this Agreement or otherwise,  but determined without regard to any additional
payments required under Section  5.3(e)(iv)  hereof. In addition,  Payment shall
include the amount of income  deemed to be received by  Executive as a result of
the acceleration of the exercisability of any of Executive's options to purchase
stock of the  Company,  the  acceleration  of the lapse of any  restrictions  on
performance  stock or  restricted  stock of the Company held by Executive or the
acceleration of payment from any deferral plan.

         1.22 "Performance Year" shall mean each calendar year.

         1.23  "Person"  shall  mean  any   individual  or  entity,   whether  a
governmental or other agency or political subdivision thereof or otherwise.

         1.24  "Retirement"  shall  mean  (1)  voluntary  Retirement  (excluding
Termination  for Good Reason) before  mandatory  retirement age, if any, with an
immediate,  nonactuarially-reduced  pension under any  Retirement  Program,  (2)
termination in accordance with any Retirement  arrangement  other than under the
Company's  Retirement Program,  which is established with Executive's consent or
(3) mandatory  Retirement as set forth under any Retirement  Program  adopted by
the  Company  as it  existed  before  the  Change of  Control or as agreed to by
Executive following a Change of Control.

         1.25  "Retirement  Program" shall mean any retirement  program plan for
the employees of the Company and  participating  subsidiaries plus any excess or
supplemental pension plans maintained by the Company.

         1.26  "Revenue"   shall  mean,   with  respect  to  the  Company  on  a
consolidated  basis for any  Performance  Year, the Company's  consolidated  net
revenue for such  Performance  Year as determined in accordance  with  generally
accepted accounting principles  consistently  applied,  including revenue earned


                                       3
<PAGE>

during such  Performance  Year and less credits and discounts issued and accrued
during such Performance Year.

         1.27  "Severance  Payment"  shall mean an amount  equal to (i) absent a
Change of Control  (A) the sum of (1) the Base Salary for the  calendar  year in
which the  Termination  occurs plus (2) the prior  year's Bonus Award (not to be
less than $100,000)  multiplied by (B) the Severance Period  Multiple;  and (ii)
within twenty four (24) months following a Change of Control, one hundred eighty
five  percent  (185%) of the sum of (A) the greater of  Executive's  Base Salary
payable to Executive by the Company  immediately  before the Date of Termination
and  Executive's  Base  Salary  which was  payable to  Executive  by the Company
immediately  before a Change of  Control,  whether  or not such Base  Salary was
includible in Executive's gross income for Federal income tax purposes; plus (B)
the average  Bonus Award (not to be less than  $100,000)  for the two (2) fiscal
years  prior to the  Change of  Control,  whether  or not such  Bonus  Award was
includible in Executive's gross income for Federal income tax purposes.

         1.28 "Severance  Period Multiple" shall mean, the quotient  obtained by
dividing  (i) the  Severance  Period  by (ii) 12;  provided,  however,  that the
Severance Period Multiple shall not be less than one.

         1.29  "Severance  Period" shall mean the number of full calendar months
remaining in the Term on the date of any Termination.

         1.30 "Term"  shall have the meaning set forth in Section 2.2 hereof and
shall include any renewal or extension as set forth herein.

         1.31  "Termination"  shall mean  termination of Executive's  employment
with the Company for any reason.

         1.32 "Voting  Stock"  shall mean with  respect to any share,  interest,
participation  or  other  equivalent  (however  designated,  whether  voting  or
non-voting)  in equity of the Company,  whether now  outstanding or issued after
the date hereof, including,  without limitation, any Common Stock, any preferred
stock and any class or kind ordinarily having the power to vote for the election
of directors, managers or other voting members of the Board.


                                   ARTICLE II

                               EMPLOYMENT AND TERM

         2.1 EMPLOYMENT.  The  Executive  shall be  employed as the Senior Vice
President,  General Counsel and Secretary of the Company,  and Executive  hereby
accepts such employment. In addition, Executive agrees that he will serve in any
similar  capacity on behalf of any existing or future  subsidiary of the Company
as reasonably requested by the Board.

         2.2 TERM. Subject to the provisions of Article V hereof, the Term shall
commence  on the date  hereof  and shall end on the  earlier  of (i) the  second
anniversary of the date hereof and (ii) the Date of Termination. If at least six
(6) months' advance written notice terminating this Agreement is not received by
either party from the other party before the end of the initial  two-year  Term,
then  this  Agreement  shall  be   automatically   renewed  for  successive  one
year-periods.



                                       4
<PAGE>

         2.3 DUTIES.  The Executive shall be directly  responsible for all legal
matters  of  the  Company  and  shall  have  such  other   powers,   duties  and
responsibilities  as  are  normally  performed  by  the  General  Counsel  of  a
corporation  of a similar  size and in a similar  industry as the Company and as
shall be assigned to him from time to time by the Chief Executive  Officer,  the
President and/or the Board; provided,  however, that any such powers, duties and
responsibilities  assigned by the Chief Executive Officer,  the President or the
Board are commensurate  with his position  specified in Section 2.1 hereof.  The
Executive  shall use his best  efforts  and  devote  all of his  business  time,
attention and energy in performing  his duties.  Notwithstanding  the foregoing,
nothing in this Agreement  shall  restrict  Executive from managing his personal
investments, personal business affairs and other personal matters, or serving on
civic or charitable  boards or committees,  if such  activities do not interfere
with the  performance  of his duties  hereunder or conflict  with the  Company's
interests.


                                   ARTICLE III

                            COMPENSATION AND BENEFITS

         3.1 BASE SALARY. For services performed by Executive, the Company shall
pay Executive an annual Base Salary of at least $231,000 in accordance  with the
Company's regular payroll  practices.  On each December 31, the Executive's Base
Salary shall be increased as determined in the discretion of the Chief Executive
Officer or Compensation  Committee of the Board (the "Compensation  Committee");
provided,  however,  that such annual increase shall not be less than the amount
equal to the product of the Base Salary  multiplied by the percentage  increase,
if any, in the Consumer Price Index for all Urban Consumers,  All Items, for the
most recent  twelve-month  period for which such figures are then available from
the Department of Labor Bureau of Statistics or similar report.

         3.2 BONUSES.  (a) No later than January 15 of each calendar  year,  the
Company  shall pay to  Executive  an annual Bonus in respect of the prior fiscal
year in an amount equal to the Bonus Award multiplied by the Bonus Multiple. For
purposes of this Agreement,  the term "Bonus  Multiple" shall mean the multiple,
if any,  determined  by reference  to the matrix set forth  below,  based on the
Company's overall  financial  performance for the relevant year by providing the
percentage  variance between  "Revenue" and "EBITDA"  actually  reported for the
fiscal year and "Revenue" and "EBITDA" as set forth in the annual budget adopted
by the Board.

                               EBITDA Variance (Actual vs. Budget)
                               -15% to -5%   -5% to 5%     +5.1% to 15%    + 15%
--------------------------------------------------------------------------------
 Revenue     -15% to -5%           0.6          0.7            0.8          1.0

Variance     -4.99% to 5%          0.8          1.0            1.1          1.2

 (Actual      +5% to 15%           1.0          1.1            1.2          1.4

   vs.      +15.1% to 25%          1.2          1.5            1.7          1.8

 Budget)        + 25%              1.4          1.7            1.8          2.0




                                       5
<PAGE>

              (b)  The  final  determination  of  EBITDA  with  respect  to  any
Performance Year shall be subject to the approval of the Compensation Committee.
If such  approval  is not  obtained  within  15  days  after  completion  of the
Company's  audited  financial  statements for the related  Performance Year, the
Compensation  Committee  shall appoint a nationally  recognized  accounting firm
(which may be the  Company's  auditors) to  determine  EBITDA in respect of such
Performance Year.

              (c) If Executive is employed for a part of a Performance  Year, he
shall  receive a pro rated Bonus Award,  determined by computing the Bonus Award
as if Executive were employed for the entire  Performance  Year and  multiplying
such Award by a fraction,  of which (i) the  numerator  is the number of days he
was  employed  by  the  Company  during  such  Performance  Year  and  (ii)  the
denominator is 365.  Notwithstanding the foregoing, no Bonus Award shall be paid
if Executive's  employment  was terminated  either (x) by the Board for Cause or
(y) by the Executive without Good Reason.

              (d) Any compensation  which may be otherwise  authorized from time
to time by the Board (or any appropriate committee thereof), the Chief Executive
Officer or the  President  shall be in addition to the Base Salary and any Bonus
Award.

         3.3 STOCK OPTIONS. Executive shall be entitled to receive annual grants
of stock options or restricted  stock in amounts  determined by the Compensation
Committee in its sole and absolute discretion.

         3.4 OTHER BENEFITS. In addition to the Base Salary and the Bonus Award,
Executive shall also be entitled to the following:

              (a) Participation in Benefit Plans. Executive shall be entitled to
participate in and receive benefits under all present and future life, accident,
disability,  medical,  pension,  and savings plan and all similar  benefits made
available to senior executive  officers of the Company.  Executive shall also be
entitled to participate in all other welfare and benefit plans maintained by the
Company  and/or  its  subsidiaries,  as the case may be,  for  their  respective
employees generally.

              (b)  VACATION.  Executive  shall be entitled to vacation  and paid
holidays  consistent with the Company's  practices as adopted from time to time;
provided, however, that such vacation shall not be less than 20 days each year

              (c) EXPENSES. The Company shall reimburse Executive for reasonable
travel expenses and out of pocket business expenses incurred by Executive in the
performance  of  his  duties  hereunder,   provided  appropriate   documentation
supporting such expenses is submitted in accordance with the Company's governing
policies.

              (d) VESTING UPON A CHANGE OF CONTROL.  Notwithstanding anything to
the contrary  contained in any other agreement,  upon the occurrence of a Change
of Control,  any outstanding option,  restricted stock, stock appreciation right
or similar right,  entitlement or payment shall become fully vested and shall no
longer be subject to any condition for ownership.




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<PAGE>

                                   ARTICLE IV

                                    COVENANTS

         4.1  NON-LNTERFERENCE.  During  the  Term  and a  period  of two  years
thereafter,  Executive  agrees not to solicit or  encourage  any employee of the
Company  who  is  employed  in  an  executive,  managerial,   administrative  or
professional  capacity  or who  possesses  Confidential  Material  to leave  the
employment of the Company.

         4.2 NONDISCLOSURE OF CONFIDENTIAL MATERIAL.  (a) In the performance of
his duties  hereunder,  Executive shall have access to confidential  records and
information,  including,  but  not  limited  to,  information  relating  to  (i)
Intellectual  Property  or (ii)  the  Company's  business  practices,  finances,
developments,  customers,  affairs,  marketing or  purchasing  strategy or other
secret  information  (collectively,  clauses (i) and (ii) of this Section 4.2(a)
are referred to as the "Confidential Material").

              (b) All  Confidential  Material shall be disclosed to Executive in
confidence.  Except in performing  his duties  hereunder,  Executive  shall not,
during the Term and at all times  thereafter,  disclose or use any  Confidential
Material other than for Company purposes.

              (c) All records, files, drawings, documents,  equipment and other
tangible items containing Confidential Material shall be the Company's exclusive
property,  and, upon termination of this Agreement, or whenever requested by the
Company, Executive shall promptly deliver to the Company all of the Confidential
Material (and copies thereof) that may be in Executive's  possession or control.
The Company  hereby  represents  and warrants that it shall give custody of such
Confidential  Material  to a escrow  agent,  with terms  acceptable  to both the
Company  and the  Executive,  for a  three-year  period at an annual cost not to
exceed $3,000.

              (d)  The  foregoing  restrictions  shall  not  apply  if (i)  such
Confidential  Material  has been  publicly  disclosed  (not  due to a breach  by
Executive  of his  obligations  hereunder  or by breach of any other person of a
fiduciary  or  confidential  obligation  to the  Company) or (ii)  Executive  is
required  to  disclose  Confidential  Material  by or to any court of  competent
jurisdiction or any  governmental  or  quasi-governmental  agency,  authority or
instrumentality of competent  jurisdiction;  provided,  however,  that Executive
shall,  prior to any such  disclosure,  immediately  notify the  Company of such
requirement;  provided,  further,  that the Company shall have the right, at its
expense, to object to such disclosures and to seek confidential treatment of any
Confidential Material to be so disclosed on such terms as it shall determine.

         4.3 NON-COMPETITION.  The Executive shall not, during the Term, Control
any Person  which is engaged,  directly or  indirectly,  or  Participate  in any
business  that  is  competitive  with  the  Company's  business  of  developing,
operating  or  expanding  a  facilities-based  telecommunications  voice or data
network  within any country in any European  Union member state,  Switzerland or
any country in which the Company currently has a switch or point of presence for
either origination or termination of voice or data transmissions or in which the
Company is so engaged in business (including the solicitation of any customer of
the  Company  on  behalf of any  competitor  or any  other  business,  directly,
indirectly on behalf of himself or any other Person) (collectively, "Competitive
Activities");  provided,  however, that nothing in this Agreement shall preclude


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<PAGE>

Executive from owning less than 5% of any class of publicly traded equity of any
Person engaged in any Competitive Activity.

         4.4 EXECUTIVE INVENTIONS AND IDEAS.

              (a)  Executive  hereby  agrees to assign to the Company,  without
further  consideration,  his entire right, title and interest (within the United
States and all foreign  jurisdictions),  to any Intellectual  Property  created,
conceived, developed or reduced to practice by Executive (alone or with others),
free and clear of any lien or encumbrance. If any Intellectual Property shall be
deemed patentable or otherwise  registrable,  Executive shall assist the Company
(at its expense) in obtaining  letters patent or other  applicable  registration
therein and shall execute all documents and do all things (including  testifying
at the Company's  expense)  necessary or appropriate to obtain letters patent or
other  applicable  registration  therein  and to  vest  in the  Company,  or any
affiliate specified by the Board.

              (b) Should the Company be unable to secure  Executive's  signature
on any document necessary to apply for, prosecute, obtain or enforce any patent,
copyright or other right or protection  relating to any  Intellectual  Property,
whether  due  to  Executive's  Disability  or  other  reason,  Executive  hereby
irrevocably  designates and appoints the Company and each of its duly authorized
officers and agents as Executive's agent and  attorney-in-fact to act for and on
Executive's behalf and stead and to execute and file any such document and to do
all other lawfully permitted acts to further the prosecution, issuance and other
enforcement of patents,  copyrights or other rights or protections with the same
effect as if executed and delivered by Executive.

         4.5 ENFORCEMENT.

              (a)  Executive  acknowledges  that  violation  of any  covenant or
agreement  set forth in this  Article  IV would  cause the  Company  irreparable
damage for which the Company  cannot be reasonably  compensated in damages in an
action at law, and, therefore,  upon any breach by Executive of this Article IV,
the  Company  shall be  entitled  to make  application  to a court of  competent
jurisdiction  for equitable  relief by way of  injunction or otherwise  (without
being required to post a bond). This provision shall not, however,  be construed
as a waiver of any of the rights which the Company may have for damages, and all
of the Company's rights and remedies shall be unrestricted.

              (b) If any provision of this Agreement,  or application thereof to
any  person,  place  or  circumstance,  shall  be held by a court  of  competent
jurisdiction   or  be  found  in  an  arbitration   proceeding  to  be  invalid,
unenforceable  or void, the remainder of this  Agreement and such  provisions as
applied to any other person,  place and circumstance  shall remain in full force
and  effect.  It is the  intention  of the  parties  hereto  that the  covenants
contained herein shall be enforced to the maximum extent (but no greater extent)
in time,  area,  and degree of  participation  as is permitted by the law of the
jurisdiction whose law is found to be applicable to the acts allegedly in breach
of this  agreement,  and the parties hereby agree that the court making any such
determination shall have the power to so reform the Agreement.

              (c) Each of the covenants of this Article IV is given by Executive
as part of the  consideration  for this  Agreement  and as an  inducement to the
Company to enter into this Agreement and accept the obligations hereunder.




                                       8
<PAGE>

                                    ARTICLE V

                                   TERMINATION

         5.1  TERMINATION  OF  AGREEMENT.  Except as  otherwise  provided,  this
Agreement shall become invalid upon any Termination of employment.

         5.2  PROCEDURES APPLICABLE TO TERMINATION.

              (a)  TERMINATION  FOR CAUSE.  The Executive may be terminated  for
Cause, upon prior written notice from the Board to Executive for termination for
Cause provided that Executive,  with his counsel, shall have had the opportunity
during  such  period  to be heard at a  meeting  of the  Board  concerning  such
determination.   The  Executive's  right  to  be  heard  in  connection  with  a
Termination shall not otherwise effect the rights and obligations hereunder.

              (b) RESIGNATION  FOR GOOD REASON.  The Executive may terminate his
employment  for Good Reason,  upon prior  written  notice from  Executive to the
Board of his intent to resign for Good Reason provided that Executive,  with his
counsel,  shall have met with the Board, if requested by the Board,  during such
period with respect to his intent to resign.  The  Executive's  obligation to be
heard in connection with a Termination shall not otherwise effect the rights and
obligations hereunder.

              (c)  TERMINATION  WITHOUT  CAUSE.  The Executive may be terminated
without Cause, upon prior written notice from the Board to Executive,  by a vote
of the Board,  provided  that  Executive,  with his counsel,  shall have had the
opportunity  during  such  period  to be heard at a meeting  of the  Board  with
respect to such  determination.  The Executive's right to be heard in connection
with a  Termination  shall not  otherwise  effect  the  rights  and  obligations
hereunder.

              (d) TERMINATION  FOR  DISABILITY.  The Executive may be terminated
for Disability, upon prior written notice from the Board to Executive, by a vote
of the Board,  provided  that  Executive,  with his counsel,  shall have had the
opportunity  during  such  period  to be heard at a meeting  of the  Board  with
respect to such  determination.  The Executive's right to be heard in connection
with a  Termination  shall not  otherwise  effect  the  rights  and  obligations
hereunder.

         5.3  OBLIGATIONS OF THE COMPANY UPON TERMINATION.

              (a) ALL TERMINATIONS.  Upon any Termination, the Company shall pay
to Executive,  or, upon Executive's  Disability,  to his heirs,  estate or legal
representatives, as the case may be, the following:

                   (i) all  Accrued  Obligations  in a lump sum  within  10 days
after the date of Termination; and

                   (ii) all  benefits  accrued  by  Executive  as of the date of
Termination  under all qualified and nonqualified  retirement,  pension,  profit
sharing and similar  plans of the Company to such extent,  in such manner and at
such time as are provided under the terms of such plans and arrangements.

              (b) TERMINATION  WITHOUT CAUSE OR RESIGNATION FOR GOOD REASON.  If
Executive's  employment  is  terminated  without  Cause  (excluding  Termination


                                       9
<PAGE>

because of Disability),  or if Executive resigns for Good Reason, in addition to
the amounts payable under Section 5.3(a) hereof:

                   (i) The Company shall pay Executive the Severance  Payment in
a lump sum within 10 days after the date of Termination;

                   (ii) The Company  shall  continue  all  benefits  coverage of
Executive and any  dependents  then provided under its benefit plans or policies
for the  unexpired  portion of the Term (or such  longer term as may be provided
herein); and

                   (iii) All stock  options  not then vested  shall  immediately
vest and become  exercisable by Executive and any  restrictions on any shares of
restricted  Common Stock which have not lapsed shall immediately lapse and be of
no further effect.

              (c) TERMINATION FOR CAUSE OR RESIGNATION  WITHOUT GOOD REASON.  If
the Board terminates  Executive's  employment for Cause, or if Executive resigns
without Good  Reason,  Executive  shall only be entitled to the amounts  payable
under Section 5.3(a) hereof.

              (d)  TERMINATION  FOR  DISABILITY.  Upon  Termination of Executive
because of a Disability, in addition to the amounts payable under Section 5.3(a)
hereof,  the Company shall pay the aggregate  Disability Payment for the greater
of (i) three years (in accordance with the Company's  regular payroll  practices
then in existence) and (ii) the period covered by any Disability Plan.

              (e)  TERMINATION  FOLLOWING  A CHANGE  OF  CONTROL.  If  Executive
provides  Notice of  Termination  of employment for Good Reason or is Terminated
without Cause within  eighteen  (18) months  following the date that a Change of
Control  occurs,  in addition to the amounts  payable under  Section  5.3(a) and
5.3(b) hereof,  Executive shall also be entitled to the benefits provided below,
without regard to any contrary provision of any plan:

                   (i) INSURANCE COVERAGE.  The Company shall arrange to provide
Executive (and dependents,  if applicable) with life,  disability (to the extent
available at standard commercial rates),  accident,  dental and medical benefits
substantially  equivalent to those which Executive receives,  or was entitled to
receive, from the Company immediately before a Change of Control of the Company.
Such  benefits  shall be  provided  for the longer of (x) thirty six (36) months
after such Date of  Termination  or (y) the period  during  which such  benefits
would have been  provided to  Executive,  as a  terminated  employee,  under the
applicable  life,  disability,  accident,  dental  and  medical  plans in effect
immediately  before a Change of  Control  of the  Company  (except  that after a
period of thirty six (36)  months  such  benefits  shall be provided on the same
financial terms and conditions as provided for under the respective plans).

                   Should it be determined  that any of the medical  benefits to
be provided to Executive (and dependents, if applicable) under this subparagraph
could be included in  Executive's  gross income for federal,  state or local tax
purposes, then the following shall apply:

                        (A) If Executive is Retirement  eligible on  Executive's
Date of Termination,  then Executive shall  participate in the Company's medical
benefit plans as if Executive  retired from the Company on  Executive's  Date of
Termination,  except that the Company shall provide such medical  coverage at no
cost to Executive for three (3) years following Executive's Date of Termination.
Thereafter,  Executive  shall  participate  therein  on the same  terms as other
retired employees; and



                                       10
<PAGE>

                        (B) If Executive is not  eligible  for  Retirement  upon
Executive's   Date  of  Termination,   Executive  will  no  longer  continue  to
participate  in the  Company's  medical  benefit plans and (i) the Company shall
provide  Executive with a cash payment in an amount equal to the amount required
by Executive to pay for coverage  under COBRA for the first eighteen (18) months
following Executive's loss of medical coverage, and thereafter, (ii) the Company
shall, for the subsequent eighteen (18) months,  purchase for Executive,  at its
cost, a policy of medical insurance providing benefits  substantially similar to
the benefits  Executive would have received under the Company's  medical benefit
plans.

                   (ii)  COUNSELING.  The Company  shall,  within 60 days of the
Date of  Termination,  make  available to Executive  financial  counseling,  tax
counseling and tax preparation  services.  Executive may select the organization
that will provide such services.  However,  the Company's  obligation to provide
Executive benefits under this subparagraph (ii) shall be limited to $10,000. The
Company shall provide to Executive any information  Executive requests regarding
Executive's personal and financial situation that Executive wishes to provide to
the financial  counseling  firm in order for the firm to provide the  counseling
services required by this subparagraph (ii).

                   (iii)  NO  REDUCTION  IN  SEVERANCE  PAYMENT.  The  Severance
Payment  shall not be reduced  regardless  of whether the  Company can  properly
deduct amounts paid pursuant to Code section 280G.

                   (v)  VESTING. Upon a Change of Control, all stock options not
then vested shall  immediately vest and become  exercisable by Executive and any
restrictions  on any shares of  restricted  Common  Stock  which have not lapsed
shall immediately lapse and be of no further effect.

                   (vi) NO DUTY TO MITIGATE.  Executive shall not be required to
mitigate  the amount of any payment  provided  for  hereunder  by seeking  other
employment  or  otherwise,  nor  shall  the  amount of any  payment  or  benefit
hereunder  be reduced by any  compensation  earned by Executive as the result of
employment  by another  employer  or by  Retirement  benefits  after the Date of
Termination, or otherwise; provided, however, should Executive become reemployed
in a job which (a) offers  medical plan  benefits  which are equal to or greater
than the medical plan benefits provided to Executive under subparagraph  3.4(a),
and (b)  such  medical  plan  benefits  are  offered  to  Executive  at no cost,
Executive  shall no longer be eligible to receive  medical plan  benefits  under
this Agreement.

                                   ARTICLE VI

                                  MISCELLANEOUS

         6.1 EXECUTIVE  ACKNOWLEDGMENT.  The Executive  acknowledges that he has
consulted with or has had the opportunity to consult with independent counsel of
his own choice  concerning  this  Agreement and has been advised to do so by the
Company,  and that he has read and understands the Agreement,  is fully aware of
its legal effect, and has entered into it freely based on his own judgment.

         6.2 BINDING  EFFECT.  This Agreement shall be binding upon and inure to
the  benefit  of  Executive's  heirs  and   representatives  and  the  Company's
successors and assigns.  The Company shall require any successor (whether direct
or indirect, by purchase, merger, reorganization,  consolidation, acquisition of


                                       11
<PAGE>

assets or stock, liquidation,  or otherwise), by agreement in form and substance
reasonably satisfactory to Executive, to assume performance of this Agreement in
the same  manner  that the  Company  would have been  required  to perform  this
Agreement  if no such  succession  had taken place.  Regardless  of whether such
agreement is executed, this Agreement shall be binding upon any successor of the
Company in accordance with the operation of law.

         6.3 NOTICES.  All notices,  requests,  demands and other communications
hereunder  shall be in  writing  and shall be deemed to have been duly  given if
delivered by hand or mailed within the continental  United States by first class
certified mail, return receipt requested, postage prepaid, addressed as follows:

              (a) IF TO THE BOARD OR THE  COMPANY,  TO:
                  Viatel,  Inc.
                  685 Third Avenue, 24th Floor
                  New York, New York 10017
                  Attention: Chief Executive Officer

              (b) IF TO EXECUTIVE, TO:
                  190 Canterbury Lane
                  Fairfield, CT 06432

Any such address may be changed by written notice sent to the other party at the
last recorded address of that party.

         6.4 TAX  WITHHOLDING.  The Company shall provide for the withholding of
any taxes required to be withheld under federal, state and local law (other than
the employer's portion of such taxes) with respect to any payment in cash and/or
other  property  made by or on behalf of the  Company  to or for the  benefit of
Executive under this Agreement or otherwise. The Company may, at its option: (i)
withhold such taxes from any cash payments  owing from the Company to Executive,
(ii)  require  Executive  to pay to the  Company  in cash such  amount as may be
required  to  satisfy  such  withholding  obligations  and/or  (iii)  make other
satisfactory   arrangements   with   Executive  to  satisfy   such   withholding
obligations.

         6.5 NO ASSIGNMENT;  NO THIRD PARTY  BENEFICIARIES.  Except as otherwise
expressly  provided in Section 6.2 hereof,  this  Agreement is not assignable by
any party,  and no payment to be made hereunder  shall be subject to alienation,
sale, transfer,  assignment, pledge, encumbrance or other charge. Except for the
Company and its existing and future subsidiaries,  no Person shall be, or deemed
to be, a third party beneficiary of this Agreement.

         6.6 EXECUTION IN  COUNTERPARTS.  This  Agreement may be executed by the
parties hereto in one or more counterparts,  each of which shall be deemed to be
an  original,  but all  such  counterparts  shall  constitute  one and the  same
instrument, and all signatures need not appear on any one counterpart.

         6.7  JURISDICTION  AND GOVERNING LAW.  Jurisdiction  over disputes with
regard to this Agreement  shall be exclusively in the courts of the State of New
York, and this Agreement  shall be construed and  interpreted in accordance with
and  governed  by the  laws of the  State of New York as  applied  to  contracts
capable of being wholly performed in such State.



                                       12
<PAGE>

         6.8 ENTIRE  AGREEMENT;  AMENDMENT.  This Agreement  embodies the entire
understanding  of the parties  hereto,  and supersedes all prior  employment and
related agreements,  regarding the subject matter hereof. No change,  alteration
or  modification  hereof may be made except in a writing,  signed by both of the
parties hereto.

         6.9 HEADINGS.  The headings in this  Agreement are for convenience  of
reference  only and shall not be construed as part of this Agreement or to limit
or otherwise affect the meaning hereof.

         6.10 SURVIVAL. Notwithstanding anything to the contrary herein, Article
IV,  Section 5.3 and Article VI of this Agreement  shall survive  termination of
this Agreement or Termination for any reason whatsoever.

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

                                                      VIATEL, INC.



                                                      By: /s/ Michael J. Mahoney
                                                         -----------------------


                                                      EXECUTIVE


                                                      /s/ James P. Prenetta
                                                      --------------------------



















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</DOCUMENT>
