{"id":39197,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/employment-agreement-global-crossing-ltd-and-john-a-scarpati.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"employment-agreement-global-crossing-ltd-and-john-a-scarpati","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/compensation\/employment-agreement-global-crossing-ltd-and-john-a-scarpati.html","title":{"rendered":"Employment Agreement &#8211; Global Crossing Ltd. and John A. Scarpati"},"content":{"rendered":"<pre>\n                              EMPLOYMENT AGREEMENT\n                          DATED AS OF DECEMBER 3, 1999\n                          BETWEEN GLOBAL CROSSING LTD.\n                                      AND\n                                JOHN A. SCARPATI\n\n\n     JOHN A. SCARPATI ('Executive') and Global Crossing Ltd. ('Company') hereby\nagree as follows:\n\n\n     1 . Term.  The term of Executive's employment by Company under this\n         -----\nAgreement (the 'Term') shall commence on and as of December 3, 1999 for a three-\nyear term ending December 3, 2002, and continue thereafter for successive one-\nyear terms (the initial three-year term and each one-year term thereafter,\ncollectively the 'Term'), unless either Company or Executive gives notice to the\nother at least six (6) months in advance of the expiration of the current term\nthat it wishes to terminate this Agreement, in which event this Agreement shall\nterminate as of the end of such term, unless earlier terminated as hereafter\nprovided.\n\n     2.  Title and Duties.  During the Term, Executive shall be employed by\n         ----------------\nCompany as Chief Administrative Officer ('CAO') world-wide reporting to the\nChief Executive Officer (the 'CEO') of the Company.   Executive shall devote his\nfull-time attention and energies to the business of the Company; provided,\nhowever, that the foregoing shall not preclude Executive from engaging in\ncharitable and community affairs, or participating as a director of a non\ncompeting business company, or managing his personal passive investments so long\nas such activities do not materially interfere with his obligations as CAO.\nExecutive shall perform such duties, which shall not be inconsistent with his\nposition as CAO of the Company, as are assigned to him from time to time by the\nCEO of the Company, and any other duties undertaken or accepted by Executive\nconsistent with his position as CAO of the Company.  The Executive shall have\nsuch officers of the Company report to him as Executive and the CEO shall agree\nfrom time to time.\n\n     3.  Salary; Additional Benefit. (a) Executive shall receive a salary of\n         --------------------------\n$500,000 per annum during the first three (3) years of the Term, payable as set\nforth below.  Executive's salary shall be reviewed at least annually and may be\nincreased but not decreased during the Term.  Salary payments shall be made in\nequal installments in accordance with Company's then prevailing payroll policy.\n\n     (b)  If Executive is still employed with the Company at the end of the\ninitial three year Term (or, if earlier, upon termination of Executive's\nemployment with the Company under Section 10 (a) (i) or Section 10 (a) (ii) or\nany other Non-Fault Termination), Executive shall be entitled to an $8 million\ncash payment from the Company or in the discretion of the Company, common stock\nwhich shall be immediately available for sale or transfer.  If stock is\nutilized, the value for these purposes shall be determined based upon the\nclosing price of the common stock\n\n                                       1\n\n \non the NASDAQ market on the date on which the payment becomes due.\n\n     4.  Annual Bonus.   (a)  For each year of the Term, Executive will be\n         ------------\neligible for an annual bonus which will be determined by the Board of Directors,\nbut which shall not be less than $500,000 for the first full year of the Term.\nThe bonus will be determined thereafter by the Board of Directors and\nExecutive's target bonus shall be one hundred percent (100 %) of his salary.  In\ndetermining the annual salary and bonus, the Board of Directors shall consider,\namong other things, Executive's performance in his capacity as CAO of the\nCompany.  It is the intent of this Agreement that Executive's total cash\ncompensation (salary and bonus) shall be appropriate for a CAO and that annual\nincreases in salary and bonus shall be made, in each event, assuming\nsatisfactory performance.\n\n     (b)   Within 10 days from the date of commencement of Executive's\nemployment with the Company, the Company shall pay to Executive a $2 Million\nsigning bonus, payable in cash.  In the event Executive voluntarily resigns or\nhis employment is terminated pursuant to Section 10 (a) (iii) or 10 (a) (iv) in\nthe first year of Executive's employment, Executive shall promptly return to the\nCompany a portion of such signing bonus equal to the sum of (i) one twelfth\n(1\/12) of $1,000,000 for each full month of employment Executive does not\ncomplete during such twelve month period plus (ii) $1,000,000.  In the event\nExecutive's employment terminates prior to the completion by Executive of five\nyears of employment with the Company (or earlier in the sole discretion of the\nBoard of Directors of the Company), Executive shall promptly return to the\nCompany a portion of such signing bonus equal to $1,000,000; provided that this\n                                                             --------\nobligation shall not apply if Executive's termination of employment constitutes\na Non-Fault Termination or results from a Change in Control (as defined in the\nPlan referred to below).\n\n     5.  Stock Options.  Executive shall be granted stock options (the 'One\n         -------------\nMillion Options') to purchase an aggregate of One Million (1,000,000) shares of\ncommon stock of the Company.  The One Million Options shall be granted in\naccordance with, and subject to the following:\n\n     (a)  The exercise price of the One Million Options shall be equal to $8.00\n          plus the closing price of the common stock of the Company on the\n          effective date of the grant of the One Million Options by the Board of\n          Directors of the Company (which is the date hereof).  The One Million\n          Options may be exercised at any time after vesting but prior to\n          expiration.\n\n     (b)  The One Million Options shall be subject to the terms and conditions\n          of the 1998 Global Crossing Ltd. Stock Incentive Plan, a copy of which\n          is attached hereto and incorporated herein by reference as Exhibit A\n          (as amended, the 'Plan') and a Non-Qualified Stock Option Agreement,\n          the form of which is attached and incorporated herein by reference as\n          Exhibit B.\n\n     (c) The One Million Options shall vest according to the following schedule:\n\n                Tranche             No. of Shares      Vesting\n\n                                       2\n\n \n                  1              333,334                Immediately\n                  2              222,223                December 3, 2000\n                  3              222,223                December 3, 2001\n                  4              222,220                December 3, 2002\n\n          The vesting schedule shall be accelerated in the event of a Non-Fault\n          Termination (as defined in Section 12).\n\n     (d)  In the event there is a Change of Control at any time during the Term,\n          then the acceleration of the vesting schedule of the One Million\n          Options and the exercisibility of the One Million Options shall be\n          governed by the Plan upon such Change of Control.\n\n     (e)  The One Million Options shall expire on the earlier of ten years from\n          the date of grant or the termination date set forth in the Stock\n          Option Agreement after termination of Executive's employment with the\n          Company.\n\n     (f)  In the event the outstanding shares of common stock of the Company are\n          changed into or exchanged for a different number or kind of shares or\n          other securities of the Company or of another corporation by reason of\n          merger, consolidation, other reorganization, reclassification,\n          combination of shares, stock split-up or stock dividend, the One\n          Million Options granted hereunder, the number of subject shares and\n          the exercise price (and other terms herein relating thereto) shall be\n          adjusted appropriately.\n\n     6.  Additional Stock Options.  Executive shall be considered for additional\n         ------------------------\nstock option grants at least annually and any such additional grants shall be\ndetermined by the Board of Directors.  In determining whether to award any\nadditional stock option grants, the Board of Directors shall consider, among\nother things, Executive's performance in his capacity as CAO of the Company.\n\n     7.  Benefits.  Executive shall be entitled to receive the following\n         ---------\n     benefits:\n\n     (a)   Health care coverage equivalent to that provided to the Company's\n          other executive officers.\n\n     (b)  First Class airfare and limousine service to\/from residence and\/or\n          office in  connection with all company travel.\n\n     (c)  Four (4) weeks paid vacation each year during the Term.  The maximum\n          accrued vacation shall be 4 weeks.\n\n     (d)  The Executive shall be treated in the same manner as, and shall be\n          entitled to such benefits and other perquisites and terms and\n          conditions of employment as are\n\n                                       3\n\n \n          generally provided to senior officers of the Company including an\n          appropriate moving allowance, if applicable. The Company shall\n          purchase a 2000 model of a recreational vehicle selected by the\n          Executive.\n\n     8.  Reimbursement for Expenses.  Executive shall be expected to incur\n         --------------------------\nvarious business expenses customarily incurred by persons holding like position,\nincluding but not limited to traveling, entertainment and similar expenses, all\nof which are to be incurred by Executive in the belief that they will benefit\nthe Company.  Subject to Company's policy regarding the reimbursement and non-\nreimbursement of such expenses, Company shall reimburse Executive for such\nexpenses from time to time, at Executive's request, and Executive shall account\nto Company for such expenses.\n\n     9.  Protection of Company's Interests.\n         ---------------------------------\n\n     (a)  During the Term of Executive's employment by Company, Executive will\n          not compete in any manner, directly or indirectly, whether as a\n          principal, employee, consultant, agent, owner or otherwise, by Company\n          or any affiliate thereof except that the foregoing will not prevent\n          Executive from holding at any time less that 5% of the outstanding\n          capital stock of any company (other than as part of a control group)\n          whose stock is publicly traded.\n\n     (b)  To the extent permitted by law, all rights worldwide with respect to\n          any and all intellectual or other property of any nature produced,\n          created or suggested by Executive during the Term of his employment or\n          resulting from his service shall be deemed to be a work for hire and\n          shall be the sole and exclusive property of Company. Executive agrees\n          to execute, acknowledge and deliver to Company, at Company's request,\n          such further documents as Company finds appropriate to evidence\n          Company's rights in such property. Any confidential and\/or proprietary\n          information of Company or any affiliate thereof (including, without\n          limitation, any information relating to the identities, capabilities,\n          compensatory and contractual arrangements and\/or general personnel\n          data of employees of Company and its affiliates) shall not be used by\n          Executive or disclosed or made available by Executive to any person\n          except as required in the course of his employment by the Company, and\n          upon expiration or earlier termination of the Term of this Agreement,\n          Executive shall return to Company all such information that exists in\n          written or other physical form (and all copies thereof under his\n          control). Executive agrees to sign the Company's standard form of\n          confidentiality agreement contemporaneously with the execution and\n          delivery of this Agreement.\n\n     10.  Termination.  In addition to any right to terminate Executive's\n          -----------\n     employment with the Company under Section 1 above:\n\n     (a)  Company shall have the right to terminate Executive's employment with\n          the Company under the following circumstances:\n\n                                       4\n\n \n          (i)    Upon death of Executive;\n\n          (ii)   Upon notice from the Company to Executive in the event of an\n          illness or other disability which has totally and permanently\n          incapacitated him from performing his duties as Executive on a\n          substantially full-time basis as described in the Company's long term\n          disability plan;\n\n          (iii)  For good cause immediately upon notice from Company.\n          Termination by Company of Executive's employment for 'Good Cause' as\n          used in this Agreement shall mean actual fraud, or embezzlement, or\n          intentional misconduct which has caused demonstrable and serious\n          injury to the Company; or\n\n          (iv)   Conviction of a felony or crime of moral turpitude which has\n          caused serious injury to the Company.\n\n     (b)  If Executive's employment is terminated pursuant to Section 10(a)(iii)\n          or 10(a)(iv) above, Executive's rights and Company's obligations\n          hereunder, and all unvested stock options granted in accordance with\n          this Agreement which have not already vested shall forthwith terminate\n          in their entirety, except that, notwithstanding the foregoing, (i) the\n          expiration date of any Options which have already vested in accordance\n          with this Agreement shall be ninety (90) days after the date of\n          termination pursuant to Section 10(a).\n\n     (c)  If Executive's employment is terminated pursuant to this Section 10,\n          no Termination Payment (as defined in Section 12) shall be payable (it\n          being understood that, notwithstanding anything to the contrary\n          contained herein, the Company shall have the right to terminate\n          Executive's employment for any other reason, subject to Executive's\n          rights under Section 12).\n\n     11.  Termination By Executive.  Prior to the expiration of the Term,\n          ------------------------\nExecutive shall have the right to terminate his employment under this Agreement\nupon 30 days notice to Company given within 60 days following the occurrence of\nany of the following events, provided that Company shall have 20 days after the\ndate such notice has been given to Company in which to cure the conduct or cause\nspecified in such notice:\n\n     (a)  Executive is not elected or retained in accordance with Section 2 as\n          CAO (reporting to Company's CEO);\n\n     (b)  There is a significant change in the nature or scope of the\n          Executive's authority, powers, functions, duties or responsibilities\n          which are inconsistent with the authority, powers, functions, duties\n          or responsibilities of a CAO;\n\n     (c)  Company shall fail to issue stock pursuant to the One Million Options\n          provided\n\n                                       5\n\n \n          for herein in accordance with the terms hereof or shall reduce his\n          salary, or the Company shall fail to make any grant of options or\n          compensation payment required hereunder;\n\n     (d)  A Change of Control shall occur; and\n\n     (e)  Any material breach of this Agreement by the Company including naming\n          the Executive's principal office outside of the New York\/ New Jersey\/\n          Connecticut tri-state area.\n\n     12.  Termination Payment.  If a Non-Fault Termination (as defined below) of\n          -------------------\nExecutive's employment with Company shall occur other than by means of the death\nor disability of Executive, Executive shall be entitled to receive a lump sum\npayment equal to the sum of one times the sum of Executive's then annual base\nsalary and bonus (provided, however, that in no event shall the annual bonus for\nthis purpose be less than $500,000) ('Termination Payment').  The Termination\nPayment shall be made to Executive not later than 30 days after the date of such\nNon-Fault Termination.  'Non-Fault Termination' shall mean Executive's\nemployment with Company shall be terminated (i) by the Company without cause,\n(ii) by reason of death or total and permanent disability pursuant to Section\n10(a)(i) or (ii) hereof, or (iii) Executive shall validly terminate his\nemployment pursuant to Section 11 hereof.  A voluntary termination of employment\nby Executive (unless validly made pursuant to Section 11) shall not be a Non-\nFault Termination.  Except for Executive's rights under Sections 3 (b) and 5\n(c), which shall remain in full force and effect after any Non-Fault Termination\nof this Agreement, and for the acceleration of the vesting of the One Million\nOptions, the Termination Payment described Section 12 shall be Executive's sole\nand exclusive remedy under this Agreement in the event of a Non-Fault\nTermination.\n\n     13.  Assignment.  Company may assign this Agreement or all or any part of\n          ----------\nits rights hereunder to any entity that succeeds to all or substantially all of\nCompany's assets or that holds, directly or indirectly, all or substantially all\nof the capital stock of the Company or that is otherwise a successor in interest\nto Company generally, and this Agreement shall inure to the benefit of, and be\nbinding upon, such assignee or successor in interest.  This Agreement is\npersonal to Executive and Executive may not, without the express written\npermission of Company, assign or pledge any rights or obligations hereunder to\nany person, firm, corporation or other entity.\n\n     14.  No Conflict With Prior Agreements.  Executive represents and warrants\n          ---------------------------------\nto Company that, to the best of his personal knowledge and belief, neither the\nexecution and delivery of this Agreement, his commencement of employment\nhereunder nor the performance of his duties hereunder conflicts with any\ncontractual commitment on his part to any third party or violates or interferes\nwith any rights of any third party.\n\n     15.  Key Man Insurance.  Company shall have the right to secure, in its own\n          -----------------\nname or otherwise, and at its own expense, life, disability, accident or other\ninsurance covering Executive\n\n                                       6\n\n \nand Executive shall have no right, title or interest in or to such insurance.\nExecutive shall assist Company in procuring such insurance by submitting to\nreasonable examinations and signing such applications and other instruments as\nmay be required by the insurance carriers to which application is made for any\nsuch insurance.\n\n     16. Post-Termination Obligation.  After the expiration or earlier\n         ---------------------------\ntermination of the Executive's employment hereunder for any reason whatsoever,\nExecutive shall not either alone or jointly, with or on behalf of others, either\ndirectly or indirectly, expressly or impliedly, whether as principal, partner,\nagent, shareholder, director, employee, consultant or otherwise, at any time\nduring a period of two years following such expiration or termination, solicit\nin any manner whatsoever the employment or engagement of, either for his own\naccount or for any other person, firm, company or other entity, any person who\nis employed by Company or any affiliated entity, whether or not such person\nwould commit any breach of his contract of employment by reason of his leaving\nthe service of Company or any affiliated entity.\n\n     17. Reimbursement of Legal Expenses.   The Company agrees to reimburse\n         --------------------------------\nExecutive for his reasonable out-of-pocket legal expenses and costs incurred in\nconnection with the negotiation and preparation of this Agreement.\n\n     18. Entire Agreement, Amendment, Waiver, Etc.\n         ----------------------------------------\n\n     (a)  This Agreement supersedes all prior and\/or contemporaneous agreements\n          and\/or statements, whether written or oral, concerning the terms of\n          Executive's employment, and no amendment or modification of this\n          Agreement shall be binding unless set forth in writing signed by\n          Company and Executive.  No waiver by either party of any breach by the\n          other party of any provision or condition of this Agreement shall be\n          effective unless in writing and signed by the party effecting the\n          waiver, and no such waiver shall be deemed a waiver of any similar or\n          dissimilar provision or condition at the same or any prior or\n          subsequent time.\n\n     (b)  All payments required to be made to Executive hereunder, whether\n          during the term of his employment hereunder or otherwise, shall be\n          subject to all applicable federal, state and local tax withholding\n          laws.\n\n     (c)  This Agreement shall be governed by and construed in accordance with\n          the laws of the State of California.  In the event of any controversy\n          or claim by either party hereunder, the prevailing party in any final\n          and legally binding adjudication (as to which all periods for the\n          filing of any appeal have expired) with respect to such controversy or\n          claim shall be entitled to reimbursement from the losing party for\n          reasonable attorney's fees and costs and for all other reasonable\n          expenses of such adjudication.\n\n     19.  Notices.  All notices that either party is required or may desire to\n          -------\ngive the other shall be in writing and shall be effective (i) upon personal\ndelivery or (ii) three business days after\n\n                                       7\n\n \ndeposit of the same with the United States Postal Service for delivery by\ncertified mail, return receipt requested, addressed to the party to be given\nnotice as follows:\n\n     To Company: Global Crossing Ltd.\n     360 N. Crescent Drive\n     Beverly Hills, California 90210\n     Attn: General Counsel\n\n     To Executive:  John A. Scarpati\n     26 Jefferson Court\n     Freehold, NJ 07728\n\n     Either party may by written notice designate a different address for giving\nnotices. The date of mailing of any such notices shall be deemed to be the date\non which such notice is given.\n\n     20.  Arbitration.  Any dispute arising out of this Agreement shall be\n          -----------\ndetermined by arbitration in Los Angeles, California, under the rules of the\nAmerican Arbitration Association then in effect and judgement upon any award\npursuant to such arbitration may be enforced in any court having jurisdiction\nthereof, provided each of the parties to this Agreement will appoint one person\nas an arbitrator to hear and determine the dispute, and if they are unable to\nagree, then the two arbitrators so chosen will select a third impartial\narbitrator whose decision will be final and conclusive upon the parties to this\nAgreement.  Subject to Section 18(c), the expenses of the arbitration\nproceedings concluded pursuant to this paragraph will be borne by the parties in\nsuch proportions as the arbitrators decide.\n\n     21.  Certain Additional Payments by the Company.  Anything in this\n          ------------------------------------------\nAgreement to the contrary notwithstanding, in the event it shall be determined\nthat any payment, award, benefit or distribution by the Company to or for the\nbenefit of the Executive would be subject to the excise tax imposed by Section\n4999 of the Internal Revenue Code or any corresponding provisions of state or\nlocal tax laws as a result of payment upon a change of control, or any interest\nor penalties are incurred by the Executive with respect to such excise tax (such\nexcise tax, together with any such interest and penalties, are hereinafter\ncollectively referred to as the 'Excise Tax'), then the Executive shall be\nentitled to receive an additional payment (a 'Gross-Up Payment') in an amount\nsuch that after payment by the Executive of all taxes (including any interest or\npenalties imposed with respect to such taxes) imposed upon the Gross-Up Payment,\nthe Executive retains an amount of the Gross-Up Payment equal to the Excise Tax\nimposed upon the payments.\n\n     22.  Headings.  The headings set forth herein are included solely for the\n          --------\npurpose of identification and shall not be used for the purpose of construing\nthe meaning of the provisions of this Agreement.\n\n\n     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date\nfirst written above.\n\n                                       8\n\n \n     GLOBAL CROSSING LTD.\n\n        \/s\/ John Comparin                       \/s\/ John A. Scarpati\n     --------------------------              -----------------------------\n     Name:  John Comparin                           John A. Scarpati\n     Title: Senior Vice President, Human\n            Resources\n                                       9\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7648],"corporate_contracts_industries":[9519],"corporate_contracts_types":[9539,9544],"class_list":["post-39197","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-global-crossing-ltd","corporate_contracts_industries-telecommunications__telephone","corporate_contracts_types-compensation","corporate_contracts_types-compensation__employment"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/39197","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=39197"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=39197"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=39197"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=39197"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}