CHANGE IN CONTROL AGREEMENT
This Agreement, dated __________________________, 2000, is made by
and between Global Crossing Ltd., a Bermuda Corporation (as hereinafter defined,
the 'Corporation'), and _____________ __________ (the 'Executive').
WHEREAS, the Board (as hereinafter defined) recognizes that the
possibility of a Change in Control (as hereinafter defined) of the Corporation
exists and that such possibility, and the uncertainty it may cause, may result
in the departure or distraction of key management employees of the Corporation;
and
WHEREAS, the Executive is a key management employee of the Corporation
or of a Subsidiary; and
WHEREAS, the Board has determined that the Corporation should
encourage the continued employment of the Executive by the Corporation or a
Subsidiary and the continued dedication of the Executive to his assigned duties
without distraction as a result of the circumstances arising from the
possibility of a Change in Control;
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Corporation and the Executive hereby agree as
follows:
1. Defined Terms. For purposes of this Agreement, the following
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terms shall have the meanings indicated below:
(A) 'Board' shall mean the Board of Directors of the Corporation, as
constituted from time to time.
(B) 'Cause' for termination by the Corporation of the Executive's
employment shall mean (i) the willful failure by the Executive
substantially to perform the Executive's duties with the Corporation or a
Subsidiary, other than any failure resulting from the Executive's
incapacity due to physical or mental illness or any actual or anticipated
failure after the issuance of a Notice of Termination for Good Reason by
the Executive in accordance with paragraph (A) of Section 6, that continues
for at least 30 days after the Board delivers to the Executive a written
demand for performance that identifies specifically and in detail the
manner in which the Board believes that the Executive willfully has failed
substantially to perform the Executive's duties, (ii) the willful engaging
by the Executive in misconduct that is demonstrably and materially
injurious to the Corporation or any Subsidiary, monetarily or otherwise or
(iii) an act or acts on Executive's part constituting (x) a felony under
the laws of the United States or any state thereof or (y) a misdemeanor
involving moral turpitude.
(C) A 'Change in Control' shall mean, if subsequent to the date of
this Agreement:
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(i) any Person (other than a Person holding securities
representing 10% or more of the combined voting power of the
Corporation's outstanding securities as of July 1, 1998, the
Corporation, any trustee or other fiduciary holding securities under
any of the Corporation's employee benefit plans, or any company owned,
directly or indirectly, by the Corporation's shareholders in
substantially the same proportions as their ownership of the stock of
the Corporation) becomes the Beneficial Owner (as such term is defined
in Rule 13d-3 under the Securities Exchange Act of 1934, as amended),
directly or indirectly, of the securities of the Corporation
representing 20% or more of the combined voting power of then
outstanding securities of the Corporation (the 'Voting Securities'),
provided that for purposes of this Section 1(C)(i), the Voting
Securities acquired directly from the Corporation by any Person shall
be excluded from the determination of such Person's Beneficial
Ownership of Voting Securities (but such Voting Securities shall be
included in the calculation of the total number of Voting Securities
then outstanding),
(ii) during any period of twenty-four months (not including
any period prior to July 1, 1998), individuals who at the beginning of
such period constitute the Board, and any new director (other than (A)
a director nominated by a Person who has entered into an agreement
with the Corporation to effect a transaction described in clause (i),
(iii) or (iv) of this definition, (B) a director nominated by a Person
(including the Corporation) who publicly announces an intention to
take or to consider taking actions (including, but not limited to, an
actual or threatened proxy contest) which if consummated would
constitute a Change in Control or (C) a director nominated by any
Person who is the Beneficial Owner, directly or indirectly, of the
securities of the Corporation representing 10% or more of the combined
voting power of the securities of the Corporation) whose election by
the Board or nomination for election by the Corporation's shareholders
was approved in advance by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the
beginning of the period or whose election or nomination for election
was previously so approved, cease for any reason to constitute at
least a majority thereof,
(iii) the consummation of any transaction or series of
transactions under which the Corporation is merged or consolidated
with any other company, other than a merger or consolidation which
would result in the Corporation's shareholders immediately prior
thereto continuing to own (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than
65% of the combined voting power of the voting securities of the
Corporation or such surviving entity outstanding immediately after
such merger or consolidation in the same proportion such shareholders
held
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the voting securities of the Corporation immediately prior to the
merger or consolidation, or
(iv) the Corporation's complete liquidation or the sale or
disposition by the Corporation of all or substantially all of the
Corporation's assets, other than the Corporation's liquidation into a
wholly--owned subsidiary.
(D) 'Code' shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(E) 'Corporation' shall mean Global Crossing, Ltd. and any successor
to its business or assets, by operation of law or otherwise.
(F) 'Date of Termination' shall have the meaning stated in paragraph
(B) of Section 6 hereof.
(G) 'Disability' shall be deemed the reason for the termination by
the Corporation of the Executive's employment, if the Executive is unable
to engage in any substantial gainful activity by reason of a medically
determinable physical or mental impairment which constitutes a permanent
and total disability, as defined in Section 22(e)(3) of the Code (or any
successor section thereto).
(H) 'Executive' shall mean the individual named in the first
paragraph of this Agreement.
(I) 'Good Reason' for termination by the Executive of the Executive's
employment shall mean the occurrence, without the Executive's express
written consent, of any of the following:
(i) the assignment to the Executive of any duties
inconsistent with the Executive's status as a key management employee
of the Corporation or of a Subsidiary or a substantial adverse
alteration in the nature or status of the Executive's responsibilities
from those in effect immediately prior to the Change in Control;
(ii) a reduction in the Executive's annual base salary,
target annual bonus, or long-term incentive opportunity to any amount
less than the Executive's annual base salary, target bonus, or long-
term incentive opportunity, respectively, as in effect immediately
prior to the Change in Control. For this purpose, long-term incentive
opportunities shall be measured as of the date of grant using a
methodology consistent with prior long-term incentive grant practices.
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(iii) the relocation of the Executive's principal place of
employment to a location more than 35 miles from the location of such
principal place of employment immediately prior to the Change in
Control, except for required business travel to an extent
substantially consistent with the Executive's business travel
obligations immediately prior to the Change in Control;
(iv) the failure to pay the Executive any portion of the
Executive's current compensation, or to pay or reimburse the Executive
for any expenses incurred by him for required business travel and
documented in accordance with reasonable Corporation policy;
(v) the failure by the Corporation to continue to provide
the Executive with benefits as favorable in the aggregate and in all
material respects as those enjoyed by the Executive under the
Corporation's retirement, life insurance, medical, health and
accident, disability, or other employee benefit plans in which the
Executive was participating immediately prior to the Change in
Control; or the failure by the Corporation to provide the Executive
with the number of paid vacation days to which the Executive was
entitled in accordance with the Corporation's normal vacation policy
in effect immediately prior to the Change in Control; or
(vi) any purported termination by the Corporation of the
Executive's employment that is not effected in accordance with a
Notice of Termination satisfying the requirements of paragraph (A) of
Section 6 hereof.
(J) 'Notice of Termination' shall have the meaning stated in
paragraph (A) of Section 6 hereof.
(K) 'Payment Trigger' shall mean the occurrence of both of (i) a
Change in Control during the term of this Agreement and (ii) at any time on
or after such Change in Control, but before the end of the Protected
Period, the termination of the Executive's employment with the Corporation
or a Subsidiary for any reason other than (A) by the Executive without Good
Reason, (B) by the Corporation (or a Subsidiary) as a result of the
Disability of the Executive or with Cause or (C) as a result of the death
of the Executive; provided, however, that if the Executive's employment is
terminated prior to a Change in Control at the request of a Person engaged
in a transaction or series of transactions that would result in a Change in
Control, such termination shall be deemed to occur during the Protected
Period. Any transfer of the Executive's employment from the Corporation to
a Subsidiary, from a Subsidiary to the Corporation, or from one Subsidiary
to another Subsidiary shall not by itself constitute a termination of the
Executive's employment for purposes of this Agreement.
(L) 'Person' shall have the meaning used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended from time to time.
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(M) 'Protected Period' shall mean the 24-month period immediately
following the month in which a Change in Control occurs.
(N) 'Subsidiary' shall mean any corporation or other entity or
enterprise, whether incorporated or unincorporated, of which at least a
majority of the securities or other interests having by their terms
ordinary voting power to elect a majority of the board of directors or
others serving similar functions with respect to such corporation or other
entity or enterprise is owned by the Corporation, directly or indirectly.
2. Term of Agreement. This Agreement will become effective on the
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date hereof and shall continue in effect through December 31, 2001 (the
'Initial Term').
The Initial Term of this Agreement automatically shall be extended for
one (1) additional year at the end of the Initial Term, and then again after
each successive one (1) year period thereafter (each such one (1) year period
following the Initial Term a 'Successive Period'). However, either party may
terminate this Agreement at the end of the Initial Term, or at the end of any
Successive Period thereafter, by giving the other party written notice of intent
not to renew, delivered at least one (1) year prior to the end of such Initial
Term or Successive Period. If such notice is properly delivered by either party,
this Agreement, along with all corresponding rights, duties, and covenants shall
automatically expire at the end of the Initial Term or Successive Period then in
progress.
In the event that a Change in Control of the Corporation occurs (as
such term is herein defined) during the Initial Term or any Successive Period,
upon the effective date of such Change in Control, the term of this Agreement
shall automatically and irrevocably be renewed for a period of twenty-four (24)
full calendar months from the effective date of such Change in Control. This
Agreement shall thereafter automatically terminate following the twenty-four
(24) month Change-in-Control renewal period. Further, this Agreement shall be
assigned to, and shall be assumed by the purchaser in such Change in Control, as
further provided in Section 9 herein.
3. General Provisions.
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(A) The Corporation hereby represents and warrants to the Executive
as follows: The execution and delivery of this Agreement and the performance by
the Corporation of the actions contemplated hereby have been duly authorized by
all necessary corporate action on the part of the Corporation. This Agreement is
a legal, valid and legally binding obligation of the Corporation enforceable in
accordance with its terms. Neither the execution or delivery of this Agreement
nor the consummation by the Corporation of the actions contemplated hereby (i)
will violate any provision of the certificate of incorporation or bye-laws (or
other charter documents) of the Corporation, (ii) will violate or be in conflict
with any applicable law or any judgment, decree, injunction or order of any
court or governmental agency or authority, or (iii) will violate or conflict
with or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under or will result in the termination of,
accelerate the performance
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required by, or result in the creation of any lien, security interest, charge or
encumbrance upon any of the assets or properties of the Corporation under, any
term or provision of the certificate of incorporation or bye-laws (or other
charter documents) of the Corporation or of any contract, commitment,
understanding, arrangement, agreement or restriction of any kind or character to
which the Corporation is a party or by which the Corporation or any of its
properties or assets may be bound or affected.
(B) No amount or benefit shall be payable under this Agreement unless
there shall have occurred a Payment Trigger during the term of this Agreement.
In no event shall payments in accordance with this Agreement be made in respect
of more than one Payment Trigger.
(C) This Agreement shall not be constructed as creating an express or
implied contract of employment and, except as otherwise agreed in writing
between the Executive and the Corporation, the Executive shall not have any
right to be retained in the employ of the Corporation or of a Subsidiary.
Notwithstanding the immediately preceding sentence or any other provision of
this Agreement, no purported termination of the Executive's employment that is
not effected in accordance with a Notice of Termination satisfying paragraph (A)
of Section 6 shall be effective for purposes of this Agreement. The Executive's
right, following the occurrence of a Change in Control, to terminate his
employment under this Agreement for Good Reason shall not be affected by the
Executive's Disability or incapacity. The Executive's continued employment shall
not constitute consent to, or a waiver of rights with respect to, any act or
failure to act constituting Good Reason under this Agreement.
4. Payments Due Upon a Payment Trigger.
-----------------------------------
(A) The Corporation shall pay to the Executive the payments described
in this Section 4 upon the occurrence of a Payment Trigger during the term of
this Agreement.
(B) Upon the occurrence of a Payment Trigger during the term of this
Agreement, the Corporation shall pay to the Executive a lump sum payment, in
cash, equal to the product of:
(i) three multiplied by
(ii) the sum of --
(a) the higher of the Executive's (1) annual base
salary in effect immediately prior to the occurrence of
the Change in Control or (2) the Executive's annual
base salary in effect immediately prior to the Payment
Trigger, plus
(b) the higher of (1) the Executive's target
annual bonus for the fiscal year (or other measuring
period) prior to the fiscal
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year (or other measuring period) in which the Change in
Control occurs or (2) the Executive's target annual
bonus for the fiscal year (or other measuring period)
in which the Payment Trigger occurs.
The amount determined under the foregoing provisions of this paragraph
(B) shall be reduced by any cash severance benefit otherwise paid to the
Executive under any applicable severance plan or other severance arrangement.
For purposes of this paragraph (B), amounts payable to the Executive pursuant to
an annual bonus plan for the fiscal year or other measuring period described in
(1) or (2) above, as applicable (the 'applicable year/period'), shall not
include amounts attributable to a fiscal year or other measuring period that
commenced prior to the applicable year/period and that become payable during the
applicable year/period.
(C) Notwithstanding any provision of any incentive compensation plan,
including, without limitation, any provision of any incentive compensation plan
conditioning the receipt of any payment upon continued employment after the
completed fiscal year or other measuring period, the Corporation shall pay to
the Executive a lump sum amount, in cash, equal to the amount of any incentive
compensation that has been allocated or awarded to the Executive for a completed
fiscal year or other measuring period, preceding the occurrence of a Payment
Trigger under any incentive compensation plan but has not yet been paid to the
Executive.
(D) For the fiscal year or other measuring period during which the
Payment Trigger occurs, the Executive shall be entitled to a pro rata bonus
equal to the number of calendar days elapsed during the fiscal year or other
measuring period prior to the Date of Termination divided by the total days in
the fiscal year or measuring period, as the case may be, and multiplied by the
target bonus payable for such period.
(E) The payments provided for in paragraphs (B), (C) and (D) of this
Section 4 shall be made not later than the fifth day following the occurrence of
a Payment Trigger, unless the amounts of such payments cannot be finally
determined on or before that day, in which case, the Corporation shall pay to
the Executive on that day an estimate, as reasonably determined in good faith by
the Corporation, of the minimum amount of the payments to which the Executive is
clearly entitled and shall pay the remainder of the payments (together with
interest at the rate provided in section 1274(b)(2)(B) of the Code) as soon as
the amount thereof can be determined but in no event later than the thirtieth
day after the occurrence of a Payment Trigger. In the event the amount of the
estimated payments exceeds the amount subsequently determined to have been due,
the excess shall constitute a loan by the Corporation to the Executive, payable
on the fifth business day after demand by the Corporation (together with
interest at the rate provided in section 1274(b)(2)(B) of the Code). At the time
that payments are made under this Section 4, the Corporation shall provide the
Executive with a written statement setting forth the manner in which the
payments were calculated and the basis for the calculations including, without
limitation, any opinions or other advice the Corporation has received from any
outside counsel, auditors or consultants (and any opinions or advice that are in
writing shall be attached to the statement).
8
(F) (i) In addition to the payments provided for above in this
Section 4, the Corporation shall provide or arrange to provide, at the same cost
to the Executive, and at the same coverage level as in effect as of the Date of
Termination (subject to changes in coverage levels applicable to all employees
who are similarly situated to the Executive prior to the Date of Termination), a
continuation of the Executive's (and the Executive's eligible dependents')
health and life insurance coverages for [thirty-six (36)] [twenty-four (24)]
months from the Date of Termination. The applicable COBRA health insurance
benefit continuation period shall commence at the beginning of this [thirty-six
(36)] [twenty-four (24)] month benefit continuation period.
(ii) The providing of these health and life insurance benefits by the
Corporation shall be discontinued prior to the end of the [thirty-six (36)]
[twenty-four (24)] month continuation period to the extent that the Executive
becomes covered under the health and/or life insurance coverages of a subsequent
employer; provided that such subsequent employer health insurance coverage does
not contain any exclusion or limitation with respect to any preexisting
condition of the Executive or the Executive's eligible dependents. For purposes
of enforcing this offset provision, the Executive shall have a duty to promptly
inform the Corporation in writing if the Executive becomes covered under the
health and/or life insurance coverages of a subsequent employer.
5. Gross-Up Payments.
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(A) In the event it shall be determined that any payment or
distribution by the Corporation or other amount with respect to the Corporation
to or for the benefit of the Executive, whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this
Section 5 (a 'Payment'), is (or will be) subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties are (or will be) incurred
by the Executive with respect to the excise tax imposed by Section 4999 of the
Code with respect to the Corporation (the excise tax, together with any interest
and penalties, are hereinafter collectively referred to as the 'Excise Tax'),
the Executive shall be entitled to receive an additional cash payment (a 'Gross-
Up Payment') from the Corporation in an amount equal to the sum of the Excise
Tax and an amount sufficient to pay the cumulative Excise Tax and all cumulative
income taxes (including any interest and penalties imposed with respect to such
taxes) relating to the Gross-Up Payment so that the net amount retained by the
Executive is equal to all payments to which Executive is entitled pursuant to
the terms of this Agreement (excluding the Gross-Up Payment) or otherwise less
income taxes (but not reduced by the Excise Tax or by income taxes attributable
to the Gross-Up Payment).
(B) Subject to the provisions of paragraph (C) of this Section 5, all
determinations required to be made under this Section 5, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at the determination, shall be made
by a nationally recognized certified public accounting firm selected by the
Corporation with the consent of the Executive, which should not unreasonably be
withheld (the 'Accounting Firm') which shall provide detailed supporting
calculations both to the Corporation and the Executive within 30 days after the
receipt of notice
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from the Executive that there has been a Payment, or such earlier time as is
requested by the Corporation. All fees and expenses of the Accounting Firm shall
be borne solely by the Corporation. The Corporation, as determined in accordance
with this Section 5, shall pay any Gross-Up Payment to the Executive within five
days after the receipt of the Accounting Firm's determination. If the Accounting
Firm determines that no Excise Tax is payable by the Executive, it shall so
indicate to the Executive in writing. Any determination by the Accounting Firm
shall be binding upon the Corporation and the Executive. As a result of
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm, it is possible that Gross-Up
Payments that the Corporation should have made will not have been made (an
'Underpayment'), consistent with the calculations required to be made hereunder.
In the event the Corporation exhausts its remedies in accordance with paragraph
(C) of this Section 5 and the Executive thereafter is required to make a payment
of any Excise Tax, the Accounting Firm shall determine the amount of
Underpayment that has occurred and the Underpayment shall be promptly paid by
the Corporation to or for the benefit of the Executive.
(C) The Executive shall notify the Corporation in writing of any
claim by the Internal Revenue Service that, if successful, would require a
Gross-Up Payment (that has not already been paid by the Corporation). The
notification shall be given as soon as practicable but no later than ten
business days after the Executive is informed in writing of the claim and shall
apprise the Corporation of the nature of the claim and the date on which the
claim is requested to be paid. The Executive shall not pay the claim prior to
the expiration of the 30-day period following the date on which the Executive
gives notice to the Corporation or any shorter period ending on the date that
any payment of taxes with respect to the claim is due. If the Corporation
notifies the Executive in writing prior to the expiration of the 30-day period
that it desires to contest the claim, the Executive shall:
(i) give the Corporation any information reasonably
requested by the Corporation relating to the claim;
(ii) take any action in connection with contesting the
claim as the Corporation shall reasonably request in writing from time
to time, including, without limitation, accepting legal representation
with respect to the claim by an attorney reasonably selected by the
Corporation;
(iii) cooperate with the Corporation in good faith in order
effectively to contest the claim; and
(iv) permit the Corporation to participate in any
proceedings relating to the claim.
The Corporation shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with the
contest and shall indemnify and hold the Executive harmless, on an after-tax
basis, for any Excise Tax or income tax (including interest and penalties with
respect thereto) imposed as a result of the representation and payment
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of costs and expenses. Without limitation of the forgoing provisions of this
Section 5, the Corporation shall control all proceedings taken in connection
with the contest and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings, and conferences with the taxing
authority in respect of the 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 the contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Corporation shall
determine. If the Corporation directs the Executive to pay the claim and sue for
a refund, the Corporation shall advance the amount of the payment to the
Executive, on an interest-free basis, and shall indemnify and hold the Executive
harmless, on an after-tax basis, from any Excise Tax or income tax (including
interest or penalties with respect thereto) imposed with respect to the advance
or with respect to any imputed income with respect to the advance; and any
extension of the statute of limitations relating to payment of taxes for the
taxable year of the Executive with respect to which the contested amount is
claimed to be due shall be limited solely to the contested amount. The
Corporation's control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder 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.
(D) If, after the receipt by the Executive of an amount advanced by
the Corporation pursuant to paragraph (C) of this Section 5, the Executive
becomes entitled to receive any refund with respect to the claim, the Executive
shall, subject to the Corporation's compliance with the requirements of
paragraph (C) of this Section 5, promptly pay to the Corporation the amount of
the refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the Executive of an amount
advanced by the Corporation pursuant to paragraph (C) of this Section 5, a
determination is made that the Executive shall not be entitled to any refund
with respect to the claim and the Corporation does not notify the Executive in
writing of its intent to contest the denial of refund prior to the expiration of
30 days after the determination, then the advance shall be forgiven and shall
not be required to be repaid and the amount of the advance shall offset, to the
extent thereof, the amount of Gross-Up Payment required to be paid.
6. Termination Procedures.
----------------------
(A) During the term of this Agreement, any purported termination of
the Executive's employment (other than by reason of death) shall be communicated
by written Notice of Termination from one party hereto to the other party hereto
in accordance with Section 10 hereof. For purposes of this Agreement, a 'Notice
of Termination' shall mean a written notice that indicates the specific
termination provision in this Agreement relied upon, and, if applicable, the
notice shall set forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of the Executive's employment under the
provision so indicated. Further, a Notice of Termination for Cause shall include
a copy of a resolution duly adopted by the affirmative vote of not less than a
majority of the entire membership of the Board at a meeting of the Board finding
that, in the informed, reasonable, good faith judgment of the Board,
11
the Executive was guilty of conduct set forth in the definition of Cause in
Section 1(B), and specifying the particulars thereof in detail.
(B) 'Date of Termination' with respect to any purported termination
of the Executive's employment during the term of the Agreement (other than by
reason of death) shall mean (i) if the Executive's employment is terminated for
Disability, 20 business days after Notice of Termination is given (provided that
the Executive shall not have returned to the full-time performance of the
Executive's duties during that 20 business day period) and (ii) if the
Executive's employment is terminated for any other reason, the date specified in
the Notice of Termination, which, in the case of a termination by the
Corporation, shall not be less than ten business days except in the case of a
termination for Cause, and, in the case of a termination by the Executive, shall
not be less than ten business days nor more than 20 business days, respectively,
after the date such notice of Termination is given.
7. No Mitigation. The Executive shall not be required to seek other
-------------
employment or to attempt in any way to reduce any amounts payable to the
Executive by the Corporation pursuant to this Agreement. Further, except as
provided in Section 4(E), the amount of any payment or benefit provided for in
this Agreement shall not be reduced by any compensation earned by the Executive
as the result of employment by another employer, by retirement benefits, by
offset against any amount claimed to be owed by the Executive to the Corporation
or a Subsidiary, or otherwise.
8. Disputes.
--------
(A) If a dispute or controversy arises out of or in connection with
this Agreement, the parties shall first attempt in good faith to settle the
dispute or controversy by mediation under the Commercial Mediation Rules of the
American Arbitration Association before resorting to arbitration or litigation.
Thereafter, any remaining unresolved dispute or controversy arising out of or in
connection with this Agreement shall, upon a written notice from the Executive
to the Corporation either before suit thereupon is filed or within 20 business
days thereafter, be settled exclusively by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association in a city
located within the continental United States designated by the Executive.
Judgment may be entered on the arbitrator's award in any court having
jurisdiction. The Executive shall, however, be entitled to seek specific
performance of the Corporation's obligations hereunder during the pendency of
any dispute or controversy arising under or in connection with this Agreement.
(B) Any legal action concerning this Agreement, other than a
mediation or an arbitration described in paragraph (A) of this Section 8,
whether instituted by the Corporation or the Executive, shall be brought and
resolved only in a state court of competent jurisdiction located in the
territory that encompasses the city, county, or parish in which the Executive's
principal residence is located at the time such action is commenced. The
Corporation hereby irrevocably consents and submits to and shall take any action
necessary to subject itself to the personal jurisdiction of that court and
hereby irrevocably agrees that all claims in respect of the
12
action shall be instituted, heard, and determined in that court. The Corporation
agrees that such court is a convenient forum, and hereby irrevocably agrees that
all claims in respect of the action shall be instituted, heard, and determined
in that court, and hereby irrevocably waives, to the fullest extent it may
effectively do so, the defense of an inconvenient forum to the maintenance of
the action. Any final judgment in the action may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
(C) The Corporation shall pay all costs and expenses, including
attorneys' fees and disbursements, of the Corporation and, at least monthly, the
Executive in connection with any legal proceeding (including arbitration),
whether or not instituted by the Corporation or the Executive, relating to the
interpretation or enforcement of any provision of this Agreement, provided that
if the Executive instituted the proceeding and the judge, arbitrator, or other
individual presiding over the proceeding affirmatively finds that the Executive
instituted the proceeding in bad faith, the Executive shall pay all costs and
expenses, including attorneys' fees and disbursements, of Executive and the
Corporation. The Corporation shall pay prejudgment interest on any money
judgment obtained by Executive as a result of such proceeding, calculated at the
rate provided in Section 1274(b)(2) (B) of the Code.
9. Successors: Binding Agreement.
-----------------------------
(A) In addition to any obligations imposed by law upon any successor
to the Corporation, the Corporation shall require any successor (whether direct
or indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business or assets of the Corporation expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Corporation would be required to perform it if no such
succession had taken place. Failure of the Corporation to obtain the assumption
and agreement prior to the effectiveness of any succession shall be a breach of
this Agreement and shall entitle the Executive to compensation from the
Corporation in the same amount and on the same terms as the Executive would be
entitled to hereunder if the Executive were to terminate his employment for Good
Reason immediately after a Change in Control and during the term of this
Agreement, except that, for purposes of implementing the foregoing, the date on
which any succession becomes effective shall be deemed the Payment Trigger
occasioned by the foregoing deemed termination of employment for Good Reason
immediately following a Change in Control. The provisions of this Section 9
shall continue to apply to each subsequent employer of Executive bound by this
Agreement in the event of any merger, consolidation, or transfer of all or
substantially all of the business or assets of that subsequent employer.
(B) This Agreement shall inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executor, administrators,
successors, heirs, distributees, devisees, and legatees. If the Executive shall
die while any amount would be payable to the Executive hereunder (other than
amounts which, by their terms, terminate upon the death of the Executive) if the
Executive had continued to live, the amount, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to the executors,
personal representatives, or administrators of the Executive's estate.
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10. Notices. For the purpose of this Agreement, notices and all
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other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addressed set forth below, or to such other address as either party
may have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon actual receipt:
To the Corporation:
Global Crossing Ltd.
Wessex House
45 Reid Street
Hamilton HM12, Bermuda
Attn: Resident Representative
Copy to:
Global Crossing Ltd.
360 North Crescent Drive
Beverly Hills, California 90210
Attn: General Counsel
To the Executive:
To the most recent address of Executive set forth in the
personnel records of the Corporation.
11. Miscellaneous . No provision of this Agreement may be modified,
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waived, or discharged unless such waiver, modification, or discharge is agreed
to in writing and signed by the Executive and an officer of the Corporation
specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not expressly set forth in this
Agreement. The validity, interpretation, construction, and performance of this
Agreement shall be governed by the laws of the State of California. All
references to sections of the Securities Exchange Act of 1934 or the Code shall
be deemed also to refer to any successor provisions to such sections. Any
payments provided for hereunder shall be paid net of any applicable withholding
required under federal, state, or local law and any additional withholding to
which the Executive has agreed.
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12. Validity. The invalidity or unenforceability of any provision of
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this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
13. Counterparts. This Agreement may be executed in several
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counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have signed this Agreement as of the date set
forth above.
Attest: GLOBAL CROSSING LTD.
________________________ By:____________________________
Name: Name:
Title: Title:
Witness: EXECUTIVE:
_________________________ _______________________________
Print Name:
Change in Control Agreement - Global Crossing Ltd.
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