Employment Agreement - Global Crossing Ltd. and Robert Annunziata


 
                             EMPLOYMENT AGREEMENT
                         DATED AS OF FEBRUARY 19, 1999
                         BETWEEN GLOBAL CROSSING LTD.
                                      AND
                               ROBERT ANNUNZIATA

     ROBERT ANNUNZIATA ('Executive') and GLOBAL CROSSING LTD. ('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 February 22, 1999 for a three-year term
ending February 22, 2002, and continue thereafter for successive one-year terms 
(the initial three-year term and each one-year term thereafter, collectively the
'Term'), unless either Company or Executive gives notice to the other at least 
six (6) months in advance of the expiration of the current term that it wishes 
to terminate this Agreement, in which event this Agreement shall terminate as of
the end of such term, unless earlier terminated as hereafter provided.

     2. Title and Duties. During the Term, Executive shall be employed by 
Company as Chief Executive Officer ('CEO') reporting to Lodwrick Cook and Gary 
Winnick, 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, or participating as a director of a non 
competing business company, or 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-Chairmen of the Board of Company, and any other duties undertaken or accepted
by Executive consistent with his position as Chief Executive Officer of the 
Company. Every executive officer of the Company (other than the Co-Chairmen and 
the Vice Chairmen) designated by the Executive shall report to him. Company 
agrees to use its best efforts to cause Executive to be elected to the Board of 
Directors of the Company (or its successor in interest), at the next annual 
meeting of the Company or earlier if possible, and to nominate Executive as a 
member of the management slate at each annual meeting of stockholders during 
employment hereunder at which Executive's director class comes up for election. 
Executive agrees to serve on the Board if elected. A failure to elect the 
Executive to the Board of Directors shall give the Executive the right to 
terminate his employment under this Agreement in accordance with Section 11.

     3. Salary; Signing Bonus; Loan. (a) Executive shall receive a salary of 
$500,000 per annum during the first three (3) years of the Term. Executive's 
salary shall be reviewed at least annually and may be increased but not 
decreased. Salary payments shall be made in equal installments in accordance 
with Company's then prevailing payroll policy.


 

     (b) Within 10 days from the date of commencement of Executive's employment 
with the Company, the Company shall pay to Executive a $10 million signing 
bonus, payable in cash. In the event Executive voluntarily resigns or his 
employment is terminated pursuant to Section 10(a)(iii) or 10(a)(iv) in the 
first year of Executive's employment, Executive shall return one twelfth (1/12) 
of the signing bonus to the Company for each full month Executive does not 
complete during such first year.

     (c) The Company shall make available a full recourse unsecured loan 
facility to Executive at the commencement of Executive's employment with the 
Company in an aggregate principal amount not to exceed $5 million in order to 
allow Executive to purchase shares of the Company's common stock; provided, 
however, loans will be available only to the extent the Executive simultaneously
uses his own funds to purchase a like amount of the Company's common stock. The 
loans shall bear interest at the minimal rate required to make the loans an arms
length transaction for tax purposes and shall be payable quarterly. The 
principal shall be payable after three years or, if earlier, upon the 
termination of Executive's employment with the Company or the disposal of the 
shares purchased with the proceeds of the loans. The proceeds of the loans shall
be used only to purchase the Company's common stock. The loan facility shall be 
available during Executive's employment with the Company and shall be drawable 
in minimum $100,000 increments.

     4. Annual 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 $500,000 for any year during the Term. The bonus shall be
reviewed at least annually by the Board of Directors and may be increased but 
not decreased.

     5. Stock Options. Subject to Board approval, Executive shall be granted 
stock options (the 'Two Million Options') to purchase an aggregate of Two 
Million (2,000,000) shares of common stock of the Company. The Two Million 
Options are deemed to be of record as of February 16, 1999 in order to be 
eligible for the March 9, 1999 stock split. The Two Million Options shall be 
granted in accordance with, and subject to the following:

     (a) The exercise price of the Two Million Options shall be equal to the
         closing price of the common stock of the Company on the day before this
         Agreement is executed and delivered and announced minus Ten Dollars
         ($10) per share. The Two Million Options may be exercised at any time
         after vesting but prior to expiration.

     (b) The Two Million Options shall be subject to the terms and conditions of
         the 1998 Global Crossing Incentive Stock Option Plan, a copy of which
         is attached hereto and incorporated herein by reference as Exhibit 'B'
         and a Non-Qualified Stock Option Agreement, the form of which is
         attached and incorporated herein by reference as Exhibit 'C'.


 
 
     (c) The Two Million Options shall vest in such shares according to the 
         following schedule:

         Tranche           No. of Shares         Vesting
         -------           -------------         -------
         1                 500,000               Immediately upon execution of
                                                 this Agreement
         2                 500,000               February 22, 2000
         3                 500,000               February 22, 2001
         4                 500,000               February 22, 2002

         The vesting schedule shall be accelerated in the event of a Non-Fault
         Termination (as defined in Section 12).

     (d) In the event there is a Change of Control at any time during the Term, 
         then the acceleration of the vesting schedule of the Two Million
         Options and the exercisiability of the Two Million Options shall be
         governed by the Plan upon such Change of Control.

     (e) The Two Million 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.

     (f) At the end of the initial Term, 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 require the Company to
         purchase from him up to 2,000,000 shares of the common stock of the
         Company held by Executive as a result of the exercise of the Two
         Million Options at a purchase price equal to the closing price of the
         common stock of the Company on the day before this Agreement is
         executed and delivered and announced (which the parties agree is set
         forth on Exhibit A hereto).

     (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 of the
         Two Million Options granted hereunder, the number of subject shares and
         the exercise price (and other terms herein relating thereto) shall be
         adjusted appropriately.

     6.  Additional Stock Options. Subject to Board approval, Executive shall 
be granted stock options (the '250K Options'; and together with the Two Million 
Options, the 'Options') to purchase an aggregate of Two Hundred Fifty Thousand 
(250,000) shares of common stock of the Company. The 250K Options are deemed to 
be of record as of February 16, 1999 in order to be eligible for the March 9, 
1999 stock split. The 250K Options shall be granted in accordance with, and 
subject to the following:


 
 
     (a) The exercise price of the 250K Options shall be equal to the closing 
         price of the common stock of the Company on the day before this
         Agreement is executed and delivered and announced. The 250K Options may
         be exercised at any time after vesting but prior to expiration.

     (b) The 250K Options shall be subject to the terms and conditions of the 
         1998 Global Crossing Incentive Stock Option Plan, a copy of which is
         attached hereto and incorporated herein by reference as Exhibit 'B' and
         a Non-Qualified Stock Option Agreement, the form of which is attached
         and incorporated herein by reference as Exhibit 'C'.

     (c) The 250K Options shall vest in full on Executive's first day of 
         employment by the Company.

     (d) In the event there is a Change of Control at any time during the Term, 
         then the exercisability of the 250K Options shall be governed by
         Company policy upon such Change of Control.

     (e) The 250K 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.

     (f) 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 of the
         250K Options granted hereunder, the number of subject shares and the
         exercise price (and other terms herein relating thereto) shall be
         adjusted appropriately.

     7.  Benefits. Executive shall be entitled to receive the following 
         benefits:

     (a) Health care coverage equivalent to that provided to the Company's other
         executive officers.

     (b) Reimbursement of reasonable living expenses for temporary housing in 
         the Los Angeles area until permanent accommodations are arranged but
         not later than December 31, 1999 and reimbursement of reasonable
         relocation expenses.

     (c) Monthly first class airfare to Los Angeles for members of Executive's 
         immediate family (spouse, mother and all children including the child
         of his wife, Patricia).


 
     (d) Private aircraft, if available, or First class airfare and limousine 
         service to/from residence and/or office in connection with all company
         travel and for appropriate trips to New Jersey until permanent living
         arrangements are made in Los Angeles as required. No such trips shall
         interfere with Executive's reasonable performance of his
         responsibilities as Chief Executive Officer.

     (e) Four (4) weeks paid vacation each year during the Term. The maximum 
         accrued vacation shall be 4 weeks.

     (f) The Executive shall be treated in the same manner as, and shall be 
         entitled to such benefits and other perquisites and terms and
         conditions of employment no less favorable than those provided to the
         most senior officers of the Company.

     8.  Reimbursement for Expenses. Executive shall be expected to incur 
various business expenses customarily incurred by persons holding like 
positions, including but not limited to traveling, entertainment and similar
expenses, all of which are to be incurred by Executive in the belief that they
will benefit the 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.

     9.  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 that 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 service shall be deemed to be a work 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 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) 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 Company's standard form
         of confidentiality agreement contemporaneously with the execution and
         delivery of this Agreement.

     10. 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 the 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 long
               term disability plan;

         (iii) For good cause immediately upon notice from Company. Termination 
               by Company of Executive's employment for 'good cause' as used in
               this Agreement shall mean actual fraud, embezzlement or
               intentional misconduct which has caused demonstrable and serious
               injury to the Company; or

         (iv)  Conviction of a felony or crime of moral turpitude which has 
               caused serious injury to the Company.

     (b) If Executive's employment is terminated pursuant to Section 10(a)(iii) 
         or 10(a)(iv) above, Executive's rights and Company's obligations
         hereunder, and 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 10(a).

     (c) If Executive's employment is terminated pursuant to this Section 10 no 
         Termination Payment (as defined in Section 12) shall be payable.

     11. 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 elected or retained in accordance with Section 2 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 continued reduction in the level of support 
         services, staff, secretarial and other assistance, office space and
         accoutrements available 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; and

     (f) Any breach of this agreement by the Company.

     12. Termination Payment. If a Non-Fault Termination (as defined below) 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 Executive's then annual base 
salary and bonus (provided, however, that in no event shall the annual bonus be 
less than $500,000) (Termination Payment). The Termination Payment shall be made
to Executive not later than 30 days after the date of such Non-Fault 
Termination. 'Non-Fault Termination' shall mean Executive's employment with 
Company shall be terminated (i) without cause, (ii) be reason of death or total 
and permanent disability pursuant to Section 9(a)(i) or (ii) hereof, or (iii) 
Executive shall validly terminate his employment pursuant to Section 11 hereof. 
Except for Executive's rights under Sections 5(e), 5(f) and 6(e), which shall 
remain in full force and effect after any Non-Fault Termination of this 
Agreement, and for the acceleration of the vesting of the Two Million Options, 
the Termination Payment described in this Section 12 shall be Executive's sole 
and exclusive remedy under this Agreement in the event of a Non-Fault 
Termination.

     13. 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 insure 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.


 
 
     14. No Conflict With Prior Agreements. Executive represents and warrants to
Company that, to the best of his personal knowledge and belief, neither the
execution and delivery of this Agreement, 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 of any third party.

     15. 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 applications is made for any such insurance.

     16. Post-Termination Obligation. After the expiration or earlier 
termination of the 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 implied, 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.

     17. Reimbursement of Legal Expenses; Personal Automobile.

     (a) Company agrees to reimburse Executive for his reasonable out-of-pocket 
         legal expenses and costs incurred in connection with the negotiation
         and preparation of this Agreement.

     (b) Promptly after the commencement of Executive's employment with the 
         Company, the Company shall purchase, on behalf of Executive, a brand-
         new 1999 model Mercedes-Benz SL 500 (or car of equivalent value) for
         use by the Executive and his spouse.

     18. Entire Agreement, Amendment, Waiver, Etc.

     (a) This Agreement supersedes all prior and/or contemporaneous agreement 
         and/or statements, whether written or oral, concerning the terms of
         Executive's employment, and no amendment or modification of this
         Agreement shall be binding unless set forth in 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 same 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 California. In the event of any controversy or
         claim by either party hereunder, the prevailing party in any final and
         legally binding 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.

     19. Notices. All notices that either party is required or may desire to 
give the other shall be in writing and shall be effective (i) upon personal 
delivery or (ii) three business days after deposit of the 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 Crossing Ltd.
              150 El Camino Dr., Suite 204
              Beverly Hills, CA 90212
              Attn: Lodwrick Cook, Co-Chairman

To Executive: Robert Annunziata
              95 Minnisink Road
              Short Hills, NJ 07078

Either party may by written notice designate a different address for giving 
notices. The date of mailing of any such notices shall be deemed to be the date 
on which such notice is given.

     20. Arbitration. 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 judgement 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, then the two arbitrators so chosen will select a third impartial 
arbitrator whose decision will be final and conclusive upon the parties to this 
Agreement. Subject to Section 18(c), the expenses of the arbitration proceedings
concluded pursuant to this paragraph will be borne by the parties in such 
proportions as the arbitrators decide.


 
     21. Certain Additional Payments by the Company. Anything in this Agreement 
to the contrary notwithstanding, in the event it shall be determined that any 
payment, award, benefit or distribution by the Company to or for the benefit of 
the Executive would be subject to the excise tax imposed by Section 4999 of the 
Code or any corresponding provisions of state or local tax laws as a result of 
payment upon a change of control, or any interest or penalties are incurred by 
the Executive with respect to such excise tax (such excise tax, together with 
any such interest and penalties, are hereinafter collectively referred to as the
'Excise Tax'), then the Executive shall be entitled to receive an additional 
payment (a 'Gross-Up Payment') in an amount such that after payment by the 
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes) imposed upon the Gross-Up Payment, the Executive retains an 
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the 
payments.

     22. Headings. The headings set forth herein are included solely for the 
purpose of identification and shall not be used for the purpose of construing 
the meaning of the provisions of this Agreement.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.

                                               GLOBAL CROSSING LTD.


/s/ Robert Annunziata                          /s/ Lodwrick Cook
________________________________               _________________________________
ROBERT ANNUNZIATA                              LODWRICK COOK,
                                               CO-CHAIRMAN


 
 
                                                                       Exhibit A

This Exhibit A is the 'Exhibit A' referred to in the Employment Agreement, dated
as of February 19, 1999 (the 'Employment Agreement'), between Global Crossing 
Ltd. and Robert Annunziata (together, the 'Parties').

The Parties agree that, for purposes of Sections 5(a), 5(f) and 6(a) of the 
Employment Agreement, the day referred to in such Sections as 'the day before 
this Agreement is executed and delivered and announced' shall be deemed to be 
Thursday, February 18, 1999 and the closing share price of the common stock of 
Global Crossing Ltd. on such day was $49-5/8 per share.