IMPSAT FIBER NETWORKS INC
MANAGEMENT INCENTIVE PLAN
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>2
<FILENAME>exhibit10_1.txt
<DESCRIPTION>MANAGEMENT INCENTIVE PLAN
<TEXT>
                                                               Exhibit 10.1


                        IMPSAT FIBER NETWORKS, INC.
                         MANAGEMENT INCENTIVE PLAN


1.   Establishment and Purpose of Plan. IMPSAT Fiber Networks, Inc. (the
     "Company") hereby establishes the Management Incentive Plan (the
     "Plan"). The purpose of the Plan is to help retain the valuable
     services of the Company's key employees by providing an incentive to
     Eligible Employees to remain employed by the Company.

2.   Term. The Plan shall continue in effect until January 31, 2009, or, if
     earlier, the Payment Date (as defined in Section 4.5 hereof).

3.   Definitions. The capitalized terms used in this Plan shall have the
     following meanings:

     3.1.   "Affiliate" means a corporation, partnership, business trust,
            limited liability company or other form of business
            organization at least a majority of the total combined voting
            power of all classes of stock or other equity interests of
            which is owned by the Company, either directly or indirectly,
            and any other entity designated by the Committee in which the
            Company has a significant interest.

     3.2.   "Cause" means, with respect to any Eligible Employee, any of
            the following events or contingencies: the Eligible Employee's
            (i) grossly negligent conduct or willful misconduct in
            connection with the execution of the Eligible Employee's duties
            to the Company that causes material and demonstrable injury to
            the Company or the Company's reputation, continuing thirty (30)
            days after written notice by the Chairman of the Board (or a
            majority of the members of the Board then holding office) to
            the Eligible Employee of the need to cure; (ii) willful failure
            or refusal to perform in any material respect the Eligible
            Employee's duties to the Company, provided the nonperformance
            continues uncorrected for a period of thirty (30) days after
            written notice thereof by the Chairman of the Board (or a
            majority of the members of the Board then holding office) to
            the Eligible Employee; (iii) theft, embezzlement, or dishonest
            conduct in connection with the Eligible Employee's employment;
            (iv) habitual alcohol or drug use that adversely affects the
            Eligible Employee's ability to perform his or her duties; or
            (v) conviction of a felony or other crime involving moral
            turpitude.

     3.3.   "Change of Control" means the occurrence after the Effective
            Date of either of the following events: (i) a "person" or
            "group" (within the meaning of Sections 13(d) and 14(d)(2) of
            the Exchange Act), other than any Existing Stockholder or its
            Affiliates, becomes the ultimate "beneficial owner" (as defined
            in Rule 13d-3 under the Exchange Act) of Voting Stock
            representing more than 30% of the total voting power of the
            Voting Stock of the Company on a fully-diluted basis and such
            ownership represents a greater percentage of the total voting
            power of the Voting Stock of the Company, on a fully-diluted
            basis, than is held in the aggregate by the Existing
            Stockholders and their Affiliates on such date; or (ii)
            individuals who on the Effective Date constitute 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 in office who either were members of the Board on
            the Effective Date 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.

     3.4.   "Closing Date" means the closing date of a single transaction
            or a series of related transactions constituting a Change of
            Control.

     3.5.   "Common Stock" means the Company's common stock, par value
            $0.01 per share.

     3.6.   "Compensation Committee" means the Compensation Committee of
            the Board of Directors of the Company.

     3.7.   "Disability" means, with respect to any Eligible Employee, the
            inability due to a medical reason (other than a medical reason
            arising out of, or relating to, alcoholism or illegal drug
            abuse) of the Eligible Employee to fulfill his duties at the
            Company on a full-time basis for a period of either (i) 180
            consecutive days, or (ii) 210 days in any 12-month period. Any
            question as to the existence of the Disability of the Eligible
            Employee as to which the Eligible Employee and the Company
            cannot agree shall be determined in writing by a qualified
            independent physician who is mutually acceptable to both the
            Eligible Employee and the Company. If the Eligible Employee and
            the Company cannot agree as to a qualified independent
            physician, each shall appoint a qualified physician and those
            two physicians shall select a third physician who shall make
            such determination in writing. The determination of Disability
            made in writing to the Company and the Eligible Employee shall
            be final and conclusive for purposes of this Plan.

     3.8.   "Effective Date" means the date the Plan is adopted and
            approved by the Compensation Committee.

     3.9.   "Eligible Employee" means an individual employed by the
            Company.

     3.10.  "Exchange Act" means the Securities Exchange Act of 1934, as
            amended.

     3.11.  "Existing Stockholders" means each holder of Common Stock, or
            of securities of the Company convertible into or exchangeable
            for Common Stock representing in the aggregate five percent
            (5%) or more of the Company's total Common Stock on a
            fully-diluted basis as of the Effective Date.

     3.12.  "Incentive-Eligible Employee" means an Eligible Employee who
            has been designated by the Compensation Committee as being
            eligible to receive an Incentive Payment and who is a party to
            a Retention Agreement.

     3.13.  "Retention Agreement" means the written agreement entered into
            between the Company and an Eligible Employee that sets forth
            the amounts of any incentive payments to which such employee
            may become entitled pursuant to the terms of this Plan.

     3.14.  "Termination Without Cause" means a termination of the Eligible
            Employee's employment by the Company or its successors other
            than for Cause.

     3.15.  "Vesting Date" means December 31, 2008, or, if earlier, the
            Closing Date.

     3.16.  "Voting Stock" means with respect to any entity, capital stock
            of any class or kind ordinarily having the power to vote for
            the election of directors, managers or other voting members of
            the governing body of such entity.

4.   Incentive Payments.

     4.1.   Upon the Payment Date (as defined in Section 4.5 hereof), the
            Company shall pay to each Incentive-Eligible Employee who is
            actively employed by the Company on the Vesting Date, or whose
            employment has been terminated prior to the Vesting Date by
            reason of the employee's death, Disability, or a Termination
            Without Cause, a lump sum cash bonus (the "Incentive Payment").

     4.2.   If the Vesting Date is December 31, 2008, the Compensation
            Committee will have the sole and absolute discretion to
            determine the amount, if any, of any Incentive Payment;
            provided, however, that the aggregate value of all bonuses
            awarded under this Plan may not exceed the aggregate amount
            described in Section 4.3 (the "Retention Bonus Pool"). If the
            Vesting Date is the Closing Date, the amount of an Incentive
            Payment shall be equal to the Incentive-Eligible Employee's
            "Allocated Percentage" (as defined in Section 4.4 hereof) of
            the Retention Bonus Pool.

     4.3.   Determination of Retention Bonus Pool. The value of the
            Retention Bonus Pool shall be determined on the Vesting Date.
            The value of the Retention Bonus Pool will be equal to
            $1,650,000 multiplied by each dollar (or fraction thereof) by
            which the per-share price of the Company's Common Stock exceeds
            $7.00 (based on (i) if the Vesting Date is December 31, 2008,
            the average closing price during the thirty-day period ending
            on the Vesting Date, or (ii) if the Vesting Date is the Closing
            Date of a Change of Control, the price per share paid for the
            Company's Common Stock in the transaction (including the fair
            market value of any noncash consideration, as determined by the
            Compensation Committee in its sole discretion)). In the event
            of any recapitalization, stock split, reorganization, merger,
            consolidation, spin-off, combination, repurchase, or share
            exchange, or other similar corporate transaction or event that
            affects the outstanding Common Stock of the Company such that
            an adjustment is appropriate in order to prevent dilution or
            enlargement of the rights of the Incentive-Eligible Employees,
            then the Compensation Committee shall make equitable changes or
            adjustments to the formula described above as determined in its
            sole discretion to be necessary or appropriate to prevent the
            dilution or enlargement of the Incentive-Eligible Employees'
            rights relating to the value of the Retention Bonus Pool.

     4.4.   Upon the Effective Date, the Incentive-Eligible Employees shall
            be granted the right to receive the percentage (the "Allocated
            Percentage") of the Retention Bonus Pool as determined by the
            Compensation Committee (each such grant, an "Award"). An
            Incentive-Eligible Employee who is terminated for Cause or who
            terminates his or her employment for any reason prior to the
            Vesting Date shall forfeit his or her Award. The Allocated
            Percentage subject to any forfeited Award may be reallocated to
            any Eligible Employee by the Compensation Committee in its sole
            discretion.

     4.5.   Payment Date. Any payment provided for in this Section 4 shall
            be payable by the Company in a lump sum in cash within thirty
            (30) days after the Vesting Date, or, in the event of a Change
            of Control, the Closing Date (the "Payment Date").

5.   Miscellaneous.

     5.1.   Successors and Assigns.

            (a)  The obligations and liabilities of the Company hereunder
                 and set forth in any Retention Agreement shall be binding
                 upon any corporation or other entity acquiring all or
                 substantially all the assets of the Company, whether by
                 operation of law or otherwise, and the rights of the
                 Company hereunder and set forth in any Retention Agreement
                 shall inure to the benefit of any such corporation or
                 other entity.

            (b)  An Eligible Employee's rights and interests hereunder and
                 under any Retention Agreement are not assignable or
                 transferable except by will or by the laws of descent and
                 distribution; provided, however, that the Eligible
                 Employee may assign this agreement to a corporation of
                 which the Eligible Employee is the sole beneficial owner,
                 and benefits provided hereunder may inure to an Eligible
                 Employee's legal personal representative(s).

     5.2.   Governing Law. This Plan and the rights of all persons claiming
            hereunder or under any Retention Agreement shall be construed
            and enforced in accordance with the laws of the State of
            Delaware without giving effect to the conflict of law
            principles thereof.

     5.3.   Validity and Severability. The invalidity or unenforceability
            of any provision of the Plan or a Retention Agreement shall not
            affect the validity or enforceability of any other provision in
            such documents, which each shall remain in full force and
            effect, and any prohibition or unenforceability in any
            jurisdiction shall not invalidate or render unenforceable such
            provision in any other jurisdiction.

     5.4.   Withholding. All benefits and payments made pursuant to this
            Plan shall be subject to all applicable taxes and other amounts
            required to be withheld pursuant to federal, state or local law
            or otherwise.

     5.5.   Non-Exclusivity of Rights. Except as otherwise provided in this
            Plan, nothing in this Plan shall prevent or limit an Eligible
            Employee's future participation in any benefit, bonus,
            incentive or other plan or program provided by the Company for
            which he or she may qualify, nor shall anything herein limit or
            reduce such rights (other than to assert an administrative
            expense claim for retention, incentive, bonus or severance
            awards or benefits) as he or she may have under any other
            agreements with the Company. Amounts which are vested benefits
            under any agreement, plan, program, policy or practice of the
            Company shall be payable in accordance with such agreement,
            plan, program, policy or practice. No additional compensation
            provided to an Eligible Employee under any agreement, benefit
            or compensation plans of the Company shall be deemed to modify
            or otherwise affect the terms or any of his or her entitlements
            hereunder. Notwithstanding the foregoing or any other Plan
            provision to the contrary, no Eligible Employee shall be
            entitled to any duplication of benefits by virtue of the
            adoption of this Plan.

     5.6.   Notice. For the purposes of this Plan, notices and all other
            communications provided for in this Plan shall be in writing
            and shall be deemed to have been duly given when personally
            delivered or sent by certified mail, return receipt requested,
            postage prepaid, addressed to the respective addresses last
            given by each party to the other, provided that all notices to
            IMPSAT Fiber Networks, Inc. shall be sent to IMPSAT Fiber
            Networks, Inc., Elvira Rawson de Dellepiane 150, 11th Floor,
            C1107BCA Buenos Aires, Argentina; Attention: President
            (Facsimile: 011-54115-170-3518). All notices and communications
            shall be deemed to have been received on the earlier of the
            date of delivery thereof or on the third business day after the
            mailing thereof, except that notice of change of address shall
            be effective only upon receipt.

     5.7.   Administration. The Compensation Committee has full power and
            authority, in its sole discretion, to construe, interpret and
            administer this Plan. Decisions of the Compensation Committee
            shall be final, conclusive and binding on all parties.

APPROVED BY THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS ON
DECEMBER 28, 2005


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