Exhibit 10.4
March 2, 2000
Xxxxxx Xxxxxxxxxx
Global Crossing Ltd.
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Dear Xxxxxx:
This letter agreement (this "Agreement") confirms our
understanding and agreement with respect to the termination of the Employment
Agreement (the "Employment Agreement") entered into by and between you and
Global Crossing Ltd. (the "Company") on February 19, 1999, and the termination
of your employment with the Company, and sets forth the rights and obligations
of you and the Company in respect of the termination of your employment, as
follows:
1. Termination Of Employment. Effective as of March 2, 2000 (the
"Termination Date"), your employment with the Company and its affiliates shall
be terminated. You also hereby resign, effective as of the Termination Date,
from all positions that you hold with the Company and any of its affiliates,
except that you (a) shall remain on the Board of Directors as an independent
director until such time as the Chairman of the Board of Directors requests your
resignation and, unless otherwise requested by the Chairman of the Board of
Directors, you shall not resign from the Board of Directors prior to the
Company's next scheduled annual meeting (which is currently scheduled for June,
2000) and (b) shall perform consulting services to the Company on a mutually
agreeable basis when requested to do so (consistent with your other obligations)
for a period that shall continue from month to month until terminated by either
party upon thirty days prior written notice.
2. Severance Payments and Other Benefits. In consideration for
your entering into this Agreement, specifically including the General Release
and covenants contained herein, the Company will pay you a lump sum cash payment
equal to $4.4 million (the "Severance Payment"). The Severance Payment will be
paid to you by wire transfer promptly after the date hereof, but in no event
later than 5 business days after the date hereof. In addition, until March 3,
2001, the Company shall provide you, at its expense, with your current office
(or other comparable office space in the Morristown, New Jersey area) and a
secretary and driver, reasonably satisfactory to you.
3. Effect of Termination of Employment on Your Equity.
(a) The Company and you hereby acknowledge and agree that,
in accordance with the Non-Qualified Stock Option Agreement, dated as of
February 22, 1999, by and between you and the Company (i) you were awarded an
option to purchase 2,000,000 ordinary
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shares of the Company ("Shares") at an exercise price of $39.625 per share and,
as a result of a 2-for-1 stock split which occurred on March 9, 1999 (the
"Stock Split"), said option was adjusted to an option to acquire 4,000,000
Shares at an exercise price of $19.813 per share, (ii) on June 18, 1999, you
exercised your right to purchase 81,576 Shares, (iii) as a result, you now have
an option to acquire 3,918,424 Shares, (iv) said option shall, subject to
paragraph (d) below, be fully exercisable immediately upon the Termination Date
and (v) said option will expire on February 22, 2009, ten years from the date of
grant.
(b) The Company and you hereby acknowledge and agree that,
in accordance with another Non-Qualified Stock Option Agreement, dated as of
February 22, 1999, by and between you and the Company (i) you were awarded an
option to purchase 250,000 Shares at an exercise price of $49.625 per share and,
as a result of the Stock Split, said option was adjusted to an option to acquire
500,000 Shares at an exercise price of $24.813 per share, (ii) no portion of
said option has been exercised by you, (iii) said option shall, subject to
paragraph (d) below, be fully exercisable immediately upon the Termination Date
and (iv) said option will expire on February 22, 2009, ten years from the date
of grant.
(c) The Company and you hereby acknowledge and agree that,
in accordance with another Non-Qualified Stock Option Agreement, dated as of
December 3, 1999, by and between you and the Company (i) you were awarded an
option to purchase 3,000,000 Shares at an exercise price of $45.00 per share,
(ii) no portion of said option has been exercised by you, (iii) your option to
acquire 1,020,000 of said 3,000,000 Shares shall, subject to paragraph (d)
below, be fully exercisable immediately upon the Termination Date, (iv) your
option to acquire 1,980,000 of said 3,000,000 Shares shall automatically
terminate upon the Termination Date and (iv) said option to acquire 1,020,000
Shares will expire on December 3, 2009, ten years from the date of grant. The
Non-Qualified Option Agreements referred to in paragraph (a), (b) and (c) of
this section are referred to herein as the "Option Agreements."
(d) You hereby agree that, prior to December 31, 2000, you
will not exercise any of the options referred to above with respect to more than
1.5 million Shares in the aggregate except in connection with an offering made
to all shareholders of the Company.
4. Full Satisfaction. You hereby acknowledge and agree that,
except as provided for herein or as required by law, you will not be entitled to
any other compensation or benefits from the Company or its affiliates,
including, without limitation, any other severance or termination benefits under
the Employment Agreement or otherwise, and you hereby agree that you will have
no further interest, rights or benefits arising out of or in connection with the
Employment Agreement (except as otherwise specifically provided for herein).
5. Confidentiality of this Agreement and Nondisparagement;
Confidentiality and Covenant Not to Solicit; Return of Property to the Company.
(a) You will keep secret and retain in strictest confidence
and will not release or divulge either orally or in writing to any person, firm
or entity except as may be required by law or regulation or by order of any
court, and will not use for the benefit of yourself
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or others, each and every term of this Agreement (or any information with
respect thereto) or any confidential or proprietary information concerning the
Company, its subsidiaries, affiliates, employees, officers or directors. In
addition, you will not issue or make any public or private comment, statement or
remark which would reasonably be construed or intended to disparage, criticize
or denigrate the Company, its subsidiaries, affiliates or any of their
employees, officers or directors. The Company shall not issue any press release
or make any public statement that would reasonably be construed or intended to
disparage, criticize or denigrate you. Except with respect to the press release
substantially in the form attached hereto, no press release will be issued by
either party about the other party without the consent of such other party
(which consent will not be unreasonably withheld).
(b) You hereby acknowledge and agree that you are bound by
the confidentiality covenants and the covenant not to solicit (as set forth in
Sections 9(b) and 16, respectively, of the Employment Agreement) for two years
following the Termination Date.
(c) You also hereby acknowledge and agree that you are bound
by the covenant to return all Company property, in accordance with Section 9 of
the Employment Agreement.
6. General Release.
(a) For and in consideration of the Severance Payment and
the other benefits and consideration provided hereby, you hereby agree on behalf
of yourself, your agents, assignees, attorneys, successors, assigns, heirs and
executors, to, and you do hereby, fully and completely forever release the
Company and its affiliates, predecessors and successors and all of their
respective past and/or present officers, directors, partners, members, managing
members, managers, employees, agents, representatives, administrators,
attorneys, insurers and fiduciaries in their individual and/or representative
capacities (hereinafter collectively referred to as the "Releasees"), from any
and all causes of action, suits, agreements, promises, damages, disputes,
controversies, contentions, differences, judgments, claims, debts, dues, sums of
money, accounts, reckonings, bonds, bills, specialities, covenants, contracts,
variances, trespasses, extents, executions and demands of any kind whatsoever,
which you or your heirs, executors, administrators, successors and assigns ever
had, now have or may have against the Releasees or any of them, in law,
admiralty or equity, whether known or unknown to you, for, upon, or by reason
of, any matter, action, omission, course or thing whatsoever occurring up to the
date this Agreement is signed by you, including, without limitation, in
connection with or in relationship to your employment or other service
relationship with the Company or its affiliates, the termination of any such
employment or service relationship and any applicable employment, compensatory
or equity arrangement with the Company or its respective affiliates; provided
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that such released claims shall not include any claims to enforce your rights
under, or with respect to, this Agreement or any of the Option Agreements (such
released claims are collectively referred to herein as the "Released Claims").
(b) Notwithstanding the generality of clause (a) above, the
Released Claims include, without limitation, (i) any and all claims under Title
VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of
1967, the Civil Rights Act of 1971, the Civil
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Rights Act of 1991, the Fair Labor Standards Act, the Employee Retirement Income
Security Act of 1974, the Americans with Disabilities Act, the Family and
Medical Leave Act of 1993, and any and all other federal, state or local laws,
statutes, rules and regulations pertaining to employment or otherwise, and (ii)
any claims for wrongful discharge, breach of contract, fraud, misrepresentation
or any compensation claims, or any other claims under any statute, rule or
regulation or under the common law, including compensatory damages, punitive
damages, attorney's fees, costs, expenses and all claims for any other type of
damage or relief.
(c) THIS MEANS THAT, BY SIGNING THIS AGREEMENT, YOU WILL
HAVE WAIVED ANY RIGHT YOU MAY HAVE HAD TO BRING A LAWSUIT OR MAKE ANY CLAIM
AGAINST THE RELEASEES BASED ON ANY ACTS OR OMISSIONS OF THE RELEASEES UP TO THE
DATE OF THE SIGNING OF THIS AGREEMENT.
(d) You represent that you have read carefully and fully
understand the terms of this Agreement, and that you have been advised to
consult with an attorney and have had the opportunity to consult with an
attorney prior to signing this Agreement. You acknowledge that you are executing
this Agreement voluntarily and knowingly and that you have not relied on any
representations, promises or agreements of any kind made to you in connection
with your decision to accept the terms of this Agreement, other than those set
forth in this Agreement. To the extent you have executed this Agreement within
less than twenty-one (21) days after its delivery to you, you hereby acknowledge
that your decision to execute this Agreement prior to the expiration of such
twenty-one (21) day period was entirely voluntary.
(e) For and in consideration of you entering into this
Agreement, the Company hereby agrees on behalf of itself, its agents, assignees,
attorneys, successors and assigns, to, and the Company does hereby, fully and
completely forever release you, from any and all causes of action, suits,
agreements, promises, damages, disputes, controversies, contentions,
differences, judgments, claims, debts, dues, sums of money, accounts,
reckonings, bonds, bills, specialities, covenants, contracts, variances,
trespasses, extents, executions and demands of any kind whatsoever, which the
Company, successors and assigns ever had, now have or may have against you, in
law, admiralty or equity, whether known or unknown to the Company, for, upon, or
by reason of, any matter, action, omission, course or thing whatsoever occurring
up to the date this Agreement is signed by the Company, including, without
limitation, in connection with or in relationship to your employment or other
service relationship with the Company or its affiliates, the termination of any
such employment or service relationship and any applicable employment,
compensatory or equity arrangement with the Company or its respective
affiliates; provided, however, that such released claims shall not include any
claims to enforce our rights under, or with respect to, this Agreement or any of
the Option Agreements.
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7. Governing Law; Arbitration. This Agreement will be governed,
construed and interpreted under the laws of the State of California. Any dispute
arising out of this Agreement shall be determined by arbitration in Los Angeles,
California, under the rules of the American Arbitration Association then in
effect and judgment upon any award pursuant to such arbitration may be enforced
in any court having jurisdiction thereof, provided each of the parties to this
Agreement will appoint one person as an arbitrator to hear and determine the
dispute, and if they are unable to agree, than the two arbitrators so chosen
will select a third impartial arbitrator whose decision will be final and
conclusive upon the parties to this Agreement.
8. Entire Agreement/Counterparts. This constitutes the entire
agreement between the parties with respect to the subject matter contained
herein, except to the extent that this Agreement refers to the Employment
Agreement. It may not be modified or changed except by written instrument
executed by all parties. This Agreement may be executed in counterparts, each of
which shall constitute an original and which together shall constitute a single
instrument.
If this letter correctly sets forth your understanding of our
agreement with respect to the foregoing matters, please so indicate by signing
below on the line provided for your signature.
Very truly yours,
GLOBAL CROSSINGS LTD.
By: /S/ Xxxxxxxx Xxxx
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Name: Xxxxxxxx Xxxx
Title: Co-Chairman
Reviewed, approved and agreed:
/s/ Xxxxxx Xxxxxxxxxx
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Xxxxxx Xxxxxxxxxx
