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Exhibit 10.9
EMPLOYMENT AGREEMENT
DATED AS OF APRIL 1, 1998
BETWEEN GLOBAL CROSSING LTD.
AND
XXXX X. XXXXXXX
XXXX X. XXXXXXX ("Executive") and GLOBAL CROSSING LTD., a Cayman Island
("Company") hereby agree as follows:
1. Term. The term of Executive's employment by Company under this
Agreement (the "Term") shall commence on and as of April 1, 1998, for a
two-year term ending March 31, 2000, and continue thereafter for successive
two-year terms, unless either Company or Executive gives notice to the other
at least three (3) months in advance of the expiration of the current two-year
term that it wishes to terminate this Agreement, in which event this Agreement
shall terminate as of the end of such current two-year term, unless earlier
terminated as hereinafter provided.
2. Title and Duties. During the Term, Executive shall be employed by
Company as its Chief Executive Officer ("CEO") reporting to Xxxxxxxx Xxxx and
Xxxx Xxxxxxx, Co-Chairmen of the Board of Directors of the Company. Executive
shall devote his full-time attention and energies to the business of the
Company; provided, however, that the foregoing shall not preclude Executive
from engaging in charitable and community affairs, managing his personal
passive investments. Executive shall perform such duties, which shall not be
inconsistent with his position as CEO of Company, as are assigned to him from
time to time by the Co-Chairman of the Board of Directors of Company, and any
other duties undertaken or accepted by Executive. Company agrees to use its
best efforts to cause Executive to be elected to the Board of Directors of
Company (or its successor in interest), when a seat on the Board becomes
available, and to nominate Executive as a member of the
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management slate at such annual meeting of stockholders during his employment
hereunder at which Executive's director class comes up for election. Executive
agrees to serve on the Board if elected.
3. Salary. Executive shall receive a salary of $600,000 per annum during
the first two (2) years of the Term. Salary payments shall be made in equal
installments in accordance with Company's then prevailing payoff policy. No
later than three (3) months prior to the expiration of any two-year term.
Company shall notify Executive of the proposed annual salary and minimum bonus
for the next ensuing two-year term, which shall in no event be less than
Executive's then current annual salary and minimum bonus, and which shall become
the salary for such, ensuing two-year term, unless the Agreement is terminated
by Executive as provided in Section 1.
4. Bonus. For each year of the Term, Executive will be eligible for an
annual bonus which will be determined by the Board of Directors, but which
shall not be less than $400,000 for any year during the Term.
5. Stock Options. Executive shall be granted stock options ("Options") to
purchase an aggregate of One Million Two Hundred Thousand (1,200,000) shares of
common stock of Company. The Options shall be granted in accordance with, and
subject to, the following:
(a) The exercise price of Options shall be equal to Two Dollars and Fifty
Cents ($2.50) per share, such option price representing the current
fair market of the Company's common stock.
(b) Executive's right to purchase 1,200,000 shares of the Company's common
stock shall vest in such shares according to the following schedule:
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Tranche No. of Shares Vesting
------- ------------- -------
1 300,000 Immediately upon execution of this
Agreement
2 300,000 March 31, 1999
3 300,000 March 31, 2000
4 300,000 March 31, 2001
provided, however, that, notwithstanding the foregoing, any portion of
Options scheduled to vest on a scheduled vesting date shall not vest on
such scheduled vesting date (or or any time thereafter) if Executive's
employment by Company pursuant to this Agreement shall have terminated
other than as a result of a Change of Control (as defined in the Company's
Stock Option Plan ([the "Plan"]).
(c) In the event there is a Change of Control at any time during the Term, then
the acceleration of the vesting schedule of Options and the exercise
ability of the Options shall be governed by Company policy upon such Change
of Control.
(d) The Options shall expire on the earlier of ten years from the date of grant
or the termination date set forth in the Plan after termination of
Executive's employment with Company.
(e) In the event a Public Offering (as hereunder defined) or reasonably
equivalent opportunity to liquidate stock does not occur within three (3)
years of the date hereof, Executive shall have the right, for a period of
six (6) months thereafter exercisable on ten (10) days written notice to
Company ("Put Period"), to
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require the Company to purchase from him 300,000 shares of common stock of
the Company at a purchase price of Twenty Dollars ($20.00) per share. In
such event, the Company shall pay to Executive the purchase price for such
shares in cash within thirty (30) days of the effective date of such
notice. The foregoing shall survive the termination of this Agreement,
except if Executive is terminated under Section 9(a)(iii). If Executive is
terminated under Section 9(a)(iii) during the Put Period, Executive's
rights shall be subject to offset by any claim of Company for damages.
(f) If Company proposes to register any of its stock or other securities under
the Securities Act of 1933, as amended, in connection with the public
offering of such securities solely for cash (other than a registration
relating solely to the sale of securities to participants in a Company
stock plan, or a registration on any form which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of the Shares or a SEC Rule 145
Transaction), Company shall give prompt written notice to Executive of its
intention to offset such a registration, including without limitation, any
initial public offering ("Public Offering") and, provided that Company has
received a written request for inclusion therein within fifteen (15) days
after the date of reading of such notice, Company shall include in such
registration all shares owned by Executive or which Executive has a vested
option to purchase. Company shall pay all expenses incident to Company's
performance of or compliance with this section, other than underwriters'
discount and commissions, which are the sole responsibility of
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Executive, but including, without limitation, all registration and
filing fees, fees and expenses of compliance with securities or blue
sky laws, printing expenses, messenger and delivery expenses, and fees
and disbursements of counsel for Company.
(g) In the event the outstanding shares of common stock of Company are
changed into or exchanged for a different number or kind of shares or
other securities of Company or of another corporation by reason of
merger, consolidation, other reorganization, reclassification,
combination of shares, stock split-up or stock dividend, rights as to
Options granted hereunder, both as to the number of subject shares and
the exercise price shall be adjusted appropriately.
6. Benefits and Perquisites: Executive shall be entitled to receive the
following benefits and perquisites:
(a) Payment during each of the first two (2) years of the Term of an
account which shall be "grossed up" by the maximum Federal and State
individual income tax rate applicable to the year in which such
payments are received by Executive in order to yield to the Executive
a net after-tax amount of $138,000 per year payable in monthly
installments during the Term. Such amount shall be in lieu of any
other relocation allowance.
(b) Health care coverage equivalent to that provided to the Company's
other executive officers.
(c) Round trip first-class airfare between Los Angeles and Chicago during
the term, bi-weekly, for the first three years of his employment.
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(d) First-class airfare and limousine service to/from the residence and/or
office in connection with all company travel.
(e) Four (4) weeks paid vacation each year during the Term.
7. Reimbursement for Expenses. Executive shall be expected to incur
various business expenses customarily incurred by persons holding like
position, including but not limited to traveling, entertainment and similar
expenses, all of which are to be incurred by Executive for the benefit of
Company. Subject to Company's policy regarding the reimbursement and
non-reimbursement of such expenses, Company shall reimburse Executive for such
expenses from time to time, at Executive's request, and Executive shall account
to Company for such expenses.
8. Protection of Company's Interests.
(a) During the term of Executive's employment by Company, Executive will
not compete in any manner, directly or indirectly, whether as a
principal, employee, consultant, agent, owner or otherwise, with
Company or any affiliate thereof, except that the foregoing will not
prevent Executive from holding at any time less than 5% of the
outstanding capital stock of any company whose stock is publicly
traded.
(b) To the extent permitted by law, all rights worldwide with respect to
any and all intellectual or other property of any nature produced,
created or suggested by Executive during the term of his employment or
resulting from his services shall be deemed to be a work made for hire
and shall be the sole and exclusive property of Company. Executive
agrees to execute, acknowledge and deliver to Company, at Company's
request, such further documents as Company finds
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appropriate to evidence Company's rights in such property. Any
confidential and/or proprietary information of Company or any affiliate
thereof (including, without limitation, any information relating to the
identities, capabilities, compensatory and contractual arrangements and/or
general personnel data of employees of Company and its affiliates to which
Executive has access) shall not be used by Executive or disclosed or made
available by Executive to any person except as required in the course of
his employment, and upon expiration or earlier termination of the term of
this Agreement. Executive shall return to Company all such information that
exists in written or other physical form (and all copies thereof) under his
control. Executive agrees to sign the standard form of confidentiality
agreement as soon as it is approved by Company.
9. Termination.
In addition to any right to terminate under Section 1 above,
(a) Company shall have the right to terminate Executive's employment with
Company under the following circumstances:
(i) Upon death of Executive.
(ii) Upon notice from Company to Executive in the event of an illness or
other disability which has totally and permanently incapacitated him
from performing his duties as Executive on a substantially full-time
basis as described in the Company's disability plan.
(iii) For good cause immediately upon notice from Company. Termination by
Company of Executive's employment for "good cause" as used in
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this Agreement shall mean actual fraud, embezzlement and
intentional misconduct which has caused demonstrable and serious
injury to the Company.
(b) If Executive's employment is terminated pursuant to Section 9(a)(iii)
above, Executive's rights and Company's obligations hereunder and
under all unvested stock options granted in accordance with this
Agreement which have not already vested shall forthwith terminate in
their entirety, except that, notwithstanding the foregoing, (i) the
expiration date of any Options which have already vested in accordance
with this Agreement shall be 30 days after the date of termination
pursuant to Section 9(a).
(c) If Executive's employment is terminated pursuant to Section 9 no
Termination Payment (as defined in Section 11) shall be payable.
10. Termination By Executive. Prior to the expiration of the Term,
Executive shall have the right to terminate his employment under this Agreement
upon 30 days' notice to Company given within 60 days following the occurrence of
any of the following events, provided that Company shall have 20 days after the
date such notice has been given to Company in which to cure the conduct or cause
specified in such notice:
(a) Executive is not elevated or retained in accordance with Section 2
hereof as CEO (reporting to Company's Co-Chairman) and a director of
Company.
(b) There is a significant change in the nature or scope of the
Executive's authority, powers, functions, duties or responsibilities.
(c) There is a substantial and confirmed reduction in the level of support
services, staff, secretarial and other assistance, office space and
accoutrements available
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to a level below that which is reasonably necessary for the
performance of Executive's duties.
(d) Company shall fail to issue stock pursuant to Executive's stock
options provided for herein or shall reduce his salary or shall deny
Executive eligibility for annual discretionary bonuses, or Company
shall fail to make any compensation payment required hereunder.
(e) A Change of Control shall occur.
(f) Any breach of this Agreement by the Company.
11. Termination Payment. If a Non-Fault Termination of Executive's
employment with Company shall occur other than by means of the death or
disability of Executive, Executive shall be entitled to receive a lump sum
payment equal to the sum of two times the sum of the Executive's then annual
base salary and bonus (provided, however, that in no event shall the bonus be
less than $400,000) ("Termination Payment"). The Termination Payment shall be
made to Executive not later than 30 days after the date that such Non-Fault
Termination. "Non-Fault Termination" shall mean Executive's employment with
Company shall be terminated, (i) without cause (i.e., in a manner which shall
constitute a breach of this Agreement by Company), (ii) by reason of Company
terminating this Agreement as provided in Section 1 hereof, (iii) by reason of
death or total and permanent disability pursuant to Section 9(g)(i) or (ii)
hereof, or (iv) Executive shall validly terminate his employment pursuant to
Section 10 hereof. Except for Executive's rights under Sections 5(d), 5(e),
5(f) and 7 hereof, which shall remain in full force and effect after any
Non-Fault Termination of this Agreement, the Termination Payment described in
this Section 11 shall
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be Executive's sole and exclusive remedy under this Agreement in the event of a
Non-Fault Termination.
12. Assignment. Company may assign this Agreement or all or any part of
its rights hereunder to any entity that succeeds to all or substantially all of
Company's assets or that holds, directly or indirectly, all or substantially
all of the capital stock of Company or that is otherwise a successor in
interest to Company generally, and this Agreement shall inure to the benefit
of, and be binding upon, such assignee or successor in interest. This Agreement
is personal to Executive and Executive may not, without the express written
permission of Company, assign or pledge any rights or obligations hereunder to
any person, firm, corporation, or other entity.
13. No Conflict With Prior Agreements. Executive represents and warrants to
Company that neither his commencement of employment hereunder nor the
performance of his duties hereunder conflicts with any contractual commitment on
his part of any third party or violates or interferes with any rights or any
third party.
14. Key Man Insurance. Company shall have the right to secure, in its own
name or otherwise, and at its own expense, life, disability, accident or other
insurance covering Executive and Executive shall have no right, title or
interest in or to such insurance. Executive shall assist Company in procuring
such insurance by submitting to reasonable examinations and signing such
applications and other instruments as may be required by the insurance carriers
to which application is made for any such insurance.
15. Post-Termination Obligation. After the expiration or earlier
termination of Executive's employment hereunder for any reason whatsoever,
Executive shall not either alone or jointly, with or on behalf of others, either
directly or indirectly, expressly or
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implicitly, whether as principal, partner, agent, shareholder, director,
employee, consultant or otherwise, at any time during a period of two years
following such expiration or termination, solicit in any manner whatsoever the
employment or engagement of, either for his own account or for any other
person, firm, company or other entity, any person who is employed by Company or
any affiliated entity, whether or not such person would commit any breach of
his contract of employment by reason of his leaving the service of Company or
any affiliated entity.
16. Entire Agreement, Amendment, Waiver, Etc.
(a) This Agreement supercedes all prior and/or contemporaneous agreements
and/or statements, whether written or oral, concerning the terms of
Executive's employment, and amendment or modification of this
Agreement shall be binding unless set forth in a writing signed by
Company and Executive. No waiver by either party of any breach by the
other party of any provision, or condition of this Agreement shall be
effective unless in writing and signed by the party effecting the
waiver, and no such waiver shall be deemed a waiver of any similar or
dissimilar provision or condition at the time or any prior or
subsequent time.
(b) All payments required to be made to Executive hereunder, whether
during the term of his employment hereunder or otherwise, shall be
subject to all applicable federal, state and local tax withholding
laws.
(c) This Agreement shall be governed by and construed in accordance with
the laws of the State of Illinois. In the event of any controversy or
claim by either party hereunder the prevailing party in any final and
legally binding
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adjudication (as to which all periods for the filing of any appeal
have expired) with respect to such controversy or claim shall be
entitled to reimbursement from the losing party for reasonable
attorney's fees and costs and for all other reasonable expenses of
such adjudication.
17. Notices. All notices that either party is required or may desire to
give the other shall be in writing shall be effective (i) upon personal
delivery or (ii) three business days after deposit of same with the United
States Postal Service for delivery by certified mail, return receipt requested,
addressed to the party to be given notice as follows:
To Company: Global Crossings Ltd.
000 Xx Xxxxxx Xx., Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxxxxx Xxxx, Co-Chairman
To Executive: Xxxx X. Xxxxxxx
00 Xxxxxxxxx Xxxx
Xxxxx Xxxxxxxxxx, XX 00000
With copies to: Xxxxx & Xxxxxx
000 X. XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx
Either party may by written notice designate a different address for
giving of notices. The date of mailing of any such notices shall be deemed to
be the date on which such notice is given.
18. Arbitration. Any dispute arising out of this Agreement shall be
determined by arbitration in Chicago, Illinois, 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
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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, then the two arbitrators as shown will
assist a third impartial arbitrator whose decision will be final and conclusive
upon the parties to this Agreement. The expenses of the arbitration proceedings
conducted pursuant to this paragraph will be borne by the parties in such
proportions as the arbitrators decide.
19. Heading. The headings set forth herein are included solely for the
purpose of identification and shall not be used for the purpose of acquiring the
meaning of the provisions of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
GLOBAL CROSSINGS LTD.
/s/ Xxxx X. Xxxxxxx By: /s/ Xxxxxxxx Xxxx
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XXXX X. XXXXXXX XXXXXXXX XXXX, CO-CHAIRMAN
-- Approved,
Xxxxx X. Xxxx
Vice President, Legal
3/30/98
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