GLOBAL TELESYSTEMS INC
EMPLOYMENT AGREEMENT - ROBERT A. SCHRIESHEIM
<DOCUMENT>
<TYPE>EX-10.18
<SEQUENCE>5
<FILENAME>h85519ex10-18.txt
<DESCRIPTION>EMPLOYMENT AGREEMENT - ROBERT A. SCHRIESHEIM
<TEXT>

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                                                                   EXHIBIT 10.18
                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT



                  THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT, dated and
effective the 1st day of November, 2000 (the "Effective Date") is made by and
between Global TeleSystems, Inc., a Delaware corporation (the "Company") and
ROBERT A. SCHRIESHEIM, an adult resident of Winnetka, Illinois (the
"Executive").

RECITALS:

                  A. The Executive has heretofore been employed by the Company
pursuant to that certain Employment Agreement between the Executive and the
Company dated as of February 22, 1999 (the "Prior Agreement");

                  B. It is the desire of the Company to assure itself of the
continued services of Executive by engaging Executive as its Executive
Vice-President, Corporate Development, and Chief Financial Officer; and

                  C. Executive desires to continue 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 involving moral turpitude 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 in connection with the Executive's
               duties as an executive of the



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               Company 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, 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.

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

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

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

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

                    (j) "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.

                    (k) "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 twelve-month period 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.

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

                    (m) "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 reduction in
     Executive Base Salary or Target Bonus as established from time to time, or
     failure to pay Executive's Base Salary or Bonus when due to Executive; (ii)
     any other material breach by the Company of any material term of this
     Agreement; (iii) any material adverse change in Executive's job titles,
     duties, responsibilities, status, reporting responsibilities or perquisites
     granted hereunder, without Executive's consent; or (iv) and change in the
     principal location of Executive's employed more than 50 miles from its
     then-current location without the Executive's consent. Except as set forth
     in Section 4 hereof or as otherwise agreed in writing by the Company, "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.

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

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

                    (p) "Prior Agreement" shall have the meaning set forth in
     the preamble hereto.

                    (q) "Restricted Shares" shall have the meaning set forth in
     Section 5(d).

                    (r) "Restructuring Actions" shall mean all of the following
     events: (i) the sale of some or all of the company's interest in Golden
     Telecom, Inc. (GTI) and/or some or all of the Company's interest in the
     company's Central European subsidiaries (GTS Hungaro, Inc., GTS Hungary
     Holding, Inc., GTS Poland, Inc., GTS Czech, Inc., GTS Romania, Inc. and GTS
     Slovakia s.r.o.), or their assets, for at least $150 million


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     in total; (ii) the refinancing of Ebone with at least $550 million from one
     or a combination of (1) bank financing, (2) other external debt or equity
     financing, or (3) the proceeds of asset sales, including the sale of GTI or
     the Central Europe Subsidiaries to the extent those proceeds exceed $150
     million; and (iii) the sale (to some or all of the holders of the
     publicly-traded bonds issued by Global TeleSystems (Europe) Ltd., or, with
     such bondholder's' consent, to members of the Company's management or to a
     third party) or wind-down of substantially all of the companies and
     businesses currently constituting the Company's "Business Services"
     Division.

                    (s) "Stock Option Plan" shall mean, as applicable to the
     relevant Options, the Fifth Amended and Restated 1992 Stock Option Plan of
     Global TeleSystems Group, Inc., the 2000 Stock Option Plan of Global
     TeleSystems, Inc., or any successor plans.

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

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

                  3. Position and Duties. Executive shall serve as Executive
Vice-President, Corporate Development and Chief Financial 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 be based at the Company's offices or
at the Executive's home office in or near Chicago, Illinois, except for
necessary travel on the Company's business. Executive may be reassigned to
another location by mutual agreement.

                  5. Compensation and Related Matters.

                    (a) Annual Base Salary. During the Term, Executive shall
     receive a base salary at a rate not less than $400,000 per annum (the
     "Annual 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 its
     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 75% of Executive's Base Salary (the
     "Target Bonus") pursuant to, and as set forth in, the terms of the GTS
     Senior



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     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 previously granted to
     Executive options to purchase 1,075,000 shares of Company Stock and, in
     connection herewith, will grant to Executive options to purchase a further
     450,000 shares of Common Stock (all of such options, collectively, the
     "Options") pursuant to the terms of a Stock Option Plan and an associated
     Stock Option Agreement.

                    (d) Restricted Shares. The Company has granted to Executive
     60,000 Restricted Shares and, in connection herewith, will grant to
     Executive 225,000 further Restricted Shares (collectively, the "Restricted
     Shares"), which shall be subject to restrictions on their sale as set forth
     in the Company Equity Compensation Plan and an associated Restricted Shares
     Grant Letter.

                    (e) 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, and other perquisites
     plans, including the Company's 1999 Senior Executive Perquisite Plan, as
     are generally provided by the Company to its senior executives of
     comparable level and responsibility in accordance with the plans, practices
     and programs of the Company.

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

                    (g) Vacations. Executive shall be entitled to paid vacation
     in accordance with the Company's vacation policy as in effect from time to
     time provided that, 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.

         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.



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                         (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 upon 90 days written
          notice to the Executive. The Executive may resign and such resignation
          shall be treated as "Termination without Cause" hereunder at the
          earlier of:

                                a.      Upon 30 days' written notice to the
                                        Company, following the completion of the
                                        Restructuring Actions; or

                                b.      Upon 90 days' written notice delivered
                                        to the Company on or after October 1,
                                        2001.

                         (vi) Resignation without Good Reason. Executive may
          resign Executive's employment without Good Reason upon 90 days written
          notice to the Company.

                    (b) Notice of Termination. Any termination of Executive's
     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 the Company may pay to Executive all Salary,
     benefits and other rights due to Executive during such Notice Period
     instead of employing Executive during such Notice Period.

                    (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 without Cause or for Good Reason or at
     Death. 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)) or in the event of Death, and subject to the
     Company's receipt of a general release in its customary form, the Company
     shall

                         (i) pay to the Executive (A) all Annual Base Salary due
          for the period prior to the Date of 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) an amount equal to two


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          (2) times the sum of (i) the Executive's then-current rate of Annual
          Base Salary and (ii) the Executive's Target Bonus for the entire year
          in which the Date of Termination occurs, as set forth in the GTS
          Senior Executive Bonus Plan, which sum shall be payable in 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, provided that,
          upon a Change in Control during such 24-month period, the amounts
          payable to Executive under this Section 7(a)(i), to the extent not yet
          paid as of such Change in Control, shall be paid to him in a single
          lump sum cash payment at the time of such Change of Control;

                         (ii) accelerate to 100% the vesting of the Options
          referred to in Paragraph 5(c) hereof;

                         (iii) accelerate to 100% the removal of restrictions on
          the Restricted Shares referred to in Paragraph 5(d) hereof;

                         (iv) continue to provide Executive with all employee
          benefits and perquisites (including the Executive Perquisite Program,
          which program shall be paid to Executive in a lump sum at its
          remaining cash value in the event of Change of Control) which
          Executive was participating in or receiving at the time of 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

                         (v) pay the cost to the earlier of 24 months or the
          date Executive commences employment with another company (other than
          self-employment) of executive-level outplacement services (including
          the use of an office and secretarial support in or near Executive's
          residence) to a maximum of $25,000 per annum;

                         (vi) allow Executive to retain possession and use, of
          all mobile phones, pagers and home computer equipment which have been
          allocated to him during his employment.

                         (vii) should Executive have relocated to London, then
          relocation of family and household goods to the U.S. shall be provided
          consistent with Company practice and shall take place within six
          months from Date of Termination.

                    (b) Termination by Reason of Disability. If Executive's
     employment shall terminate by reason of Executive's Disability (pursuant to
     Section 6(a)(ii) and subject to the Company's receipt of a general release
     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 Target 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.



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                    (c) 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.

                  8. Parachute Payments.

                    (a) If it is determined (as hereafter provided) that by
     reason of any payment or Option vesting occurring pursuant to the terms of
     this Agreement (or otherwise under any other agreement, plan or program)
     upon a Change in Control (collectively a "Payment") the Executive would be
     subject to the excise tax imposed by Code Section 4999 or successor
     provision (the "Parachute Tax"), then the Executive shall be entitled to
     receive an additional payment or payments (a "Gross-Up Payment") in an
     amount such that, after payment by the Executive of all taxes (including
     any Parachute Tax) imposed upon the Gross-Up Payment, the Executive retains
     an amount of the Gross-Up Payment equal to the Parachute Tax imposed upon
     the Payment.

                    (b) Subject to the provisions of Section 8(a) hereof, all
     determinations required to be made under this Section 8, including whether
     a Parachute Tax is payable by the Executive and the amount of such
     Parachute Tax and whether a Gross-Up Payment is required and the amount of
     such Gross-Up Payment, shall be made by the nationally recognized firm of
     certified public accountants (the "Accounting Firm") used by the Company
     prior to the Change in Control (or, if such Accounting Firm declines to
     serve, the Accounting Firm shall be a nationally recognized firm of
     certified public accountants selected by the Executive). The Accounting
     Firm shall be directed by the Company or the Executive to submit its
     preliminary determination and detailed supporting calculations to both the
     Company and the Executive within 15 calendar days after the determination
     date, if applicable, and any other such time or times as may be requested
     by the Company or the Executive. If the Accounting Firm determines that any
     Parachute Tax is payable by the Executive, the Company shall pay the
     required Gross-Up Payment to, or for the benefit of, the Executive within
     five business days after receipt of such determination and calculations. If
     the Accounting Firm determines that no Parachute Tax is payable by the
     Executive, it shall, at the same time as it makes such determination,
     furnish the Executive with an opinion that he has substantial authority not
     to report any Parachute Tax on his federal tax return. Any good faith
     determination by the Accounting Firm as to the amount of the Gross-Up
     Payment shall be binding upon the Company and the Executive absent a
     contrary determination by the Internal Revenue Service or a court of
     competent jurisdiction; provided, however, that no such determination shall
     eliminate or reduce the Company's obligation to provide any Gross-Up
     Payments that shall be due as a result of such contrary determination. As a
     result of the uncertainty in the application of Code Section 4999 at the
     time of any determination by the Accounting Firm hereunder, it is possible
     that Gross-Up Payments that will not have been made by the Company should
     have been made (an "Underpayment"), consistent with the calculations
     required to be made hereunder. In the event that the Company exhausts or
     fails to pursue its remedies pursuant to Section 8(f) hereof and the
     Executive thereafter is required to make a payment of any Parachute Tax,
     the Executive shall direct the Accounting Firm to determine the amount of
     the Underpayment that has occurred and to submit its determination and
     detailed supporting calculations to both the Company and the Executive as
     promptly as possible. Any such Underpayment shall be promptly paid by the
     Company to, or for the benefit of, the Executive within five business days
     after receipt of such determination and calculations.



<PAGE>   9

                    (c) The Company and the Executive shall each provide the
     Accounting Firm access to and copies of any books, records and documents in
     the possession of the Company or the Executive, as the case may be,
     reasonably requested by the Accounting Firm, and otherwise cooperate with
     the Accounting Firm in connection with the preparation and issuance of the
     determination contemplated by Section 8(b) hereof.

                    (d) The federal tax returns filed by the Executive (or any
     filing made by a consolidated tax group which includes the Company) shall
     be prepared and filed on a basis consistent with the determination of the
     Accounting Firm with respect to the Parachute Tax payable by the Executive.
     The Executive shall make proper payment of the amount of any Parachute Tax,
     and at the request of the Company, provide to the Company true and correct
     copies (with any amendments) of his federal income tax return as filed with
     the Internal Revenue Service, and such other documents reasonably requested
     by the Company, evidencing such payment. If prior to the filing of the
     Executive's federal income tax return, the Accounting Firm determines in
     good faith that the amount of the Gross-Up Payment should be reduced, the
     Executive shall within five business days pay to the Company the amount of
     such reduction.

                    (e) The fees and expenses of the Accounting Firm for its
     services in connection with the determinations and calculations
     contemplated by Sections 8(b) and (d) hereof shall be borne by the Company.
     If such fees and expenses are initially advanced by the Executive, the
     Company shall reimburse the Executive the full amount of such fees and
     expenses within five business days after receipt from the Executive of a
     statement therefor and reasonable evidence of his payment thereof.

                    (f) In the event that the Internal Revenue Service claims
     that any payment or benefit received under this Agreement constitutes an
     "excess parachute payment" within the meaning of Code Section 280G(b)(1),
     or successor provision, the Executive shall notify the Company in writing
     of such claim. Such notification shall be given as soon as practicable but
     not later than 10 business days after the Executive is informed in writing
     of such claim and shall apprise the Company of the nature of such claim and
     the date on which such claim is requested to be paid. The Executive shall
     not pay such claim prior to the expiration of the 30 day period following
     the date on which the Executive gives such notice to the Company (or such
     shorter period ending on the date that any payment of taxes with respect to
     such claim is due). If the Company notifies the Executive in writing prior
     to the expiration of such period that it desires to contest such claim, the
     Executive shall (i) give the Company any information reasonably requested
     by the Company relating to such claim; (ii) take such action in connection
     with contesting such claim as the Company shall reasonably request in
     writing from time to time, including without limitation, accepting legal
     representation with respect to such claim by an attorney reasonably
     selected by the Company and reasonably satisfactory to the Executive; (iii)
     cooperate with the Company in good faith in order to effectively contest
     such claim; and (iv) permit the Company to participate in any proceedings
     relating to such claim; provided, however, that the Company shall bear and
     pay directly all costs and expenses (including, but not limited to,
     additional interest and penalties and related legal, consulting or other
     similar fees) incurred in connection with such contest and shall indemnify
     and hold the Executive harmless, on an after-tax basis, for and against for
     any Parachute Tax or income tax or other tax (including interest and
     penalties with respect thereto) imposed as a result of such representation
     and payment of costs and expenses.


<PAGE>   10

                    (g) The Company shall control all proceedings taken in
     connection with such contest and, at its sole option, may pursue or forgo
     any and all administrative appeals, proceedings, hearings and conferences
     with the taxing authority in respect of such claim and may, at its sole
     option, either direct the Executive to pay the tax claimed and sue for a
     refund or contest the claim in any permissible manner and the Executive
     agrees to prosecute such contest to a determination before any
     administrative tribunal, in a court of initial jurisdiction and in one or
     more appellate courts, as the Company shall determine; provided, however,
     that if the Company directs the Executive to pay such claim and sue for a
     refund, the Company shall advance the amount of such payment to the
     Executive on an interest-free basis, and shall indemnify and hold the
     Executive harmless, on an after tax basis, from any Parachute Tax (or other
     tax including interest and penalties with respect thereto) imposed with
     respect to such advance or with respect to any imputed income with respect
     to such advance; and provided, further, that if the Executive is required
     to extend the statue of limitations to enable the Company to contest such
     claim, the Executive may limit this extension solely to such contested
     amount. The Company's control of the contest shall be limited to issues
     with respect to which a corporate deduction would be disallowed pursuant to
     Code Section 280G or successor provision, and the Executive shall be
     entitled to settle or contest, as the case may be, any other issue raised
     by the Internal Revenue Service or any other taxing authority. In addition,
     no position may be taken nor any final resolution be agreed to by the
     Company without the Executive's consent if such position or resolution
     could reasonably be expected to adversely affect the Executive unrelated to
     matters covered hereto.

                    (h) If, after the receipt by Executive of an amount advanced
     by the Company in connection with the contest of the Parachute Tax claim,
     the Executive receives any refund with respect to such claim, the Executive
     shall promptly pay to the Company the amount of such refund (together with
     any interest paid or credited thereon after taxes applicable thereto);
     provided, however, if the amount of that refund exceeds the amount advanced
     by the Company the Executive may retain such excess. If, after the receipt
     by the Executive of an amount advanced by the Company in connection with a
     Parachute Tax claim, a determination is made that the Executive shall not
     be entitled to any refund with respect to such claim and the Company does
     not notify the Executive in writing of its intent to contest the denial of
     such refund prior to the expiration of 30 days after such determination
     such advance shall be deemed to be in consideration for services rendered
     after the Date of Termination.

                  9. Competition.


                    (a) Executive shall not, at any time during the Term, or (i)
     for a period of twelve (12) months thereafter, without the prior written
     consent of the Board, directly or indirectly through any other person or
     entity:

                         (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 European
          geographic market in which the Company either (A) offers or provides
          broadband telecommunications (which term hereafter shall be deemed to
          include data or internet communications) services to customers; (B)
          operates or manages a

<PAGE>   11

          provider of telecommunications services; (C) has material 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.

                    (b) 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

                         (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;

          provided that nothing in this Section 9(b) shall be construed so as to
          prevent Executive from using, in connection with his employment for
          himself or an employer other than the Company, knowledge that was
          acquired by him during the course of his employment with the Company
          and which is generally known to persons of his experience in other
          companies in the same industry;


<PAGE>   12

                    (c) 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.

                    (d) In the event any agreement in Section 9 hereof 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.

                  10. Injunctive Relief. It is recognized and acknowledged by
Executive that a breach of the covenants contained in Section 9 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 9 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.

                  11. Mutual Non-Disparagement. Neither the Company nor
Executive shall make any oral or written statement about the other party which
is intended or reasonably likely to disparage the other party, or otherwise
degrade the other party's reputation in the business or legal community or in
the telecommunications industry.

                  12. 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 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 has executed 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 is 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.


<PAGE>   13

                  13. 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.

                  14. 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 all
protection of and coverage under 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).

15. 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:                 Global TeleSystems, Inc.
                                            Attn.: Chief Executive Officer
                                            151 Shaftesbury Avenue
                                            London, England  WC2H 8AL


         If to Executive:                   Robert A. Schriesheim


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.

                  16. 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.

                  17. Entire Agreement. This Agreement 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 including, but not limited to, the Prior Agreement. 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.


<PAGE>   14

                  18. 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.

                  19. 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
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.

                  20. 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.

                  21. 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.

                  22. 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, INC.


                                         By:
                                            ------------------------------------
                                         Name:  Robert J. Amman
                                         Title: Chairman, CEO and President

<PAGE>   15

                                         EXECUTIVE


                                         ---------------------------------------
                                         Robert A. Schriesheim



                                         Agreed and Acknowledged:


                                         ---------------------------------------
                                         Name:  Adam Solomon
                                         Title: Chairman, Senior Executive
                                                Compensation Committee of Board





</TEXT>
</DOCUMENT>
