FLAG TELECOM GROUP LTD
EXHIBIT_10.8
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<TYPE>EX-10.8
<SEQUENCE>7
<FILENAME>a2110395zex-10_8.txt
<DESCRIPTION>EXHIBIT_10.8
<TEXT>
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                                                                   EXHIBIT 10.8

                                [FLAG LETTERHEAD]


                                  CONFIDENTIAL

October ___, 2002


Andres Bande
55 Park Lane
London W1A 3HJ
United Kingdom

       AMENDMENT TO EMPLOYMENT AGREEMENT FOR ANDRES BANDE PURSUANT TO THE
     THIRD AMENDED AND RESTATED JOINT PLAN OF REORGANIZATION OF THE COMPANY

Dear Andres:

Pursuant to the Third Amended and Restated Joint Plan of Reorganization of
Debtors under Chapter 11 of the Bankruptcy Code (such debtors referred to
collectively herein as the "COMPANY"), as may be amended from time to time (the
"PLAN"), your Employment Agreement dated 11 December 1997 (your "AGREEMENT"), as
amended by the Addendum to your Agreement dated 9 April 2002 (your "ADDENDUM"),
is hereby, effective as of the Effective Date (as defined in the Plan), assumed
by FLAG Telecom Group Limited ("FTGL") as further amended below.

1.   RETENTION PAYMENT AMOUNT. You shall vest in your Retention Payment Amount
     on the Effective Date. Notwithstanding anything to the contrary in your
     Agreement or Addendum, you shall be obligated to repay your Retention
     Payment Amount if, prior to the Effective Date, you terminate your
     Agreement without Good Reason or your employment under your Agreement is
     terminated for Cause.

2.   ENTERPRISE VALUE BONUS. You shall not be entitled to payment of the
     percentage of the Enterprise Value of the Company as contemplated under
     your Addendum.

3.   2002 BONUS. Your Annual Incentive Bonus for 2002 shall be paid in
     accordance with the following:

     (a)  You shall be eligible to earn your target Annual Incentive Bonus as in
          effect prior to the Commencement Date (as defined in the Plan) if (i)
          you are employed on 31 December 2002 by FTGL or (ii) your employment
          with FTGL terminates prior to 31 December 2002 for any reason other
          than (A)

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          termination for Cause or (B) voluntary resignation for other than Good
          Reason; provided that the conditions of Section 3(c) below are met.

     (b)  Your Annual Incentive Bonus shall be payable in a cash lump sum as
          soon as practicable following 31 December 2002, but in no event later
          than 20 January 2003; provided that, if fourth quarter financial
          results are not available on 15 January 2003, the portion of the
          Annual Incentive Bonus based upon such results shall be payable within
          five days of such results becoming available, but in no event later
          than March 31, 2003.

     (c)  Fifty percent of your target Annual Incentive Bonus shall be payable
          if available cash plus working capital of FTGL and its subsidiaries as
          of the Effective Date is equal to or greater than projected or if the
          available cash plus working capital of FTGL and its subsidiaries as of
          the Effective Date is within 2.5 percent of such projection. The
          remaining fifty percent of the target Annual Incentive Bonus shall be
          payable if each of cash revenue and cash flow in fourth quarter 2002
          is equal to or greater than projected or if each of cash revenue and
          cash flow in fourth quarter 2002 is within 2.5 percent of each such
          projection.

     (d)  For purposes hereof, the projections referenced in Section 3(c) above
          and the meaning of "available cash plus working capital", "cash
          revenue" and "cash flow" shall be determined consistent with Section
          6.7.4 of the Plan.

4.   TERMINATION OF EMPLOYMENT.

     (a)  The lump-sum payment in Section 5(b)(i) of your Agreement shall equal
          one times Base Salary plus target Annual Incentive Bonus.

     (b)  The phrase "on or after 1 October 2004" shall be substituted for
          "after 31 December 2003" in Section 5(c) of your Agreement, as amended
          by your Addendum.

     (c)  The phrase "or (F) failure of FLAG to create the SOP and make the
          grants referred to in Sections 3(f)(i) within ninety (90) days of the
          Effective Date except to the extent the delay is directly and
          primarily the result of Executive's action or inactions" shall be
          deleted from Section 5(d)(i) of your Agreement.

     (d)  The phrase "or your (F) being removed as Chairman of the FTGL Board at
          any time prior to the end of the thirty-day period following the
          Effective Date or (G) at any time ceasing to be the chief executive
          officer of FTGL reporting directly and exclusively to the full Board
          of Directors of FTGL" shall be inserted after Section 5(d)(i)(E) of
          your Agreement.

     (e)  You shall not be entitled to terminate your Agreement for Good Reason
          solely as a result of a change in composition of the Board of
          Directors of FTGL or a change in ownership of FTGL, in each case
          pursuant to the Plan.

     (f)  Except as expressly modified above, "Cause" and "Good Reason" shall be
          defined in the manner set forth in your Agreement.

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5.   LEGAL EXPENSES.

     (a)  FTGL shall pay your actual documented litigation-related costs and
          expenses (including attorneys fees) to the extent that (i) such costs
          and expenses are pending reimbursement or not actually reimbursed by
          the insurers under the directors and officers liability insurance
          policies of the Company in existence prior to the Effective Date (the
          "POLICIES"), regardless of whether such costs and expenses were
          incurred pre- or post-petition, and (ii) the aggregate amount of the
          payments described in this sentence, together with all other payments
          made pursuant to Section 6.4.1(b) of the Plan, shall not exceed $3.25
          million and the aggregate amount of such payments for the period
          through the first anniversary of the Effective Date shall not exceed
          $1.625 million. Notwithstanding the foregoing, FTGL shall not be
          required to advance costs and expenses that are pending reimbursement
          by the insurers under the Policies if such advancement would result in
          the contravention of the Sarbanes-Oxley Act of 2002 (as defined
          below). "Sarbanes-Oxley Act of 2002" means that certain U.S. federal
          legislation adopted on July 30, 2002, as amended or supplemented from
          time to time, or any U.S. federal statute or regulation adopted by the
          U.S. Securities and Exchange Commission in effect that has replaced,
          amended or supplemented or will replace, amend or supplement such
          statute.

     (b)  You shall take all reasonably necessary action to collect from the
          directors and officers liability insurers of the Company the costs and
          expenses described in Section 5(a) above and fully cooperate with FTGL
          in connection with any coverage disputes under Section 5(f) below. In
          the event of a material violation of your obligation to cooperate with
          FTGL pursuant to the preceding sentence, FTGL's obligation to make
          payments under Section 5(a) above shall terminate.

     (c)  You hereby represent and certify that you have not knowingly made any
          fraudulent statements or material misrepresentations to the directors
          and officers liability insurers of the Company or persons acting on
          their behalf in connection with the Company's directors and officers
          insurance application process. In the event that you are found by a
          judgment or other final adjudication to have knowingly made such a
          fraudulent statement or material misrepresentation, FTGL's obligation
          to make the payments in Section 5(a) above shall immediately terminate
          and you shall be required to refund your pro rata share of any
          payments made by FTGL pursuant to Section 6.4.1(b) of the Plan. Such
          pro rata share shall be determined by dividing the total amount of
          such payments by the total number of defendants in the relevant
          litigation.

     (d)  All payments made pursuant to Section 5(a) above, to the extent
          actually paid by FTGL, shall be immediately reimbursable upon
          collection by you to the extent of and out of any indemnified fees,
          costs and expenses actually reimbursed by the insurers under the
          Policies.

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     (e)  FTGL shall reimburse you for attorneys fees and expenses incurred in
          connection with the Chapter 11 Cases (as defined in the Plan), in an
          amount not to exceed, together with all other reimbursements pursuant
          to Section 6.4.2 of the Plan, $180,000 in the aggregate. Any such
          reimbursement shall reduce the maximum amount payable under Section
          5(a) above.

     (f)  FTGL shall pay its own attorneys fees and costs in connection with
          disputes as to coverage under the Policies and take all reasonably
          necessary action to resolve any such disputes; provided, however, that
          FTGL shall not be responsible, either directly or through
          reimbursement, for costs associated with any legal or other
          professionals retained by you in connection with such disputes.

6.   INDEMNIFICATION. You shall be indemnified by FTGL with respect to acts and
     omissions occurring on or after the Effective Date to the same extent as
     the other directors and officers of FTGL.

7.   DEFERRED COMPENSATION. Except with respect to your Annual Incentive Bonus
     for 2002, you shall not be entitled to receive any deferred compensation
     earned or incurred prior to the Effective Date. For the avoidance of doubt,
     it is understood that the foregoing sentence shall not prevent you from
     receiving the Retention Payment Amount referred to in Section 1 above, to
     the extent eligible.

8.   NO DEFAULTS/CURE OBLIGATIONS. You hereby acknowledge that no default exists
     under your Agreement or Addendum that is required to be cured upon
     assumption.

9.   OTHER TERMS IN EFFECT. Except as specifically modified herein, the
     employment period and other terms of your Agreement and Addendum remain in
     force.

Please indicate your acceptance of the above by signing and dating below.

Sincerely,


FLAG Telecom Group Limited

By:
   -------------------------------
Name:
Title:


--------------------------------
Andres Bande

Date
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