CARRIER1 INTERNATIONAL S A
EXHIBIT 10.4
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>6
<FILENAME>a2063587zex-10_4.txt
<DESCRIPTION>EXHIBIT 10.4
<TEXT>
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                              SEPARATION AGREEMENT


                                     between


                           CARRIER1 INTERNATIONAL GMBH

                    HEREINAFTER REFERRED TO AS THE ,,COMPANY"

                                       and

                               MR. STIG JOHANSSON

                     HEREINAFTER REFERRED TO AS ,,EMPLOYEE"



          The following Separation Agreement is agreed upon:

    1)    The employment relationship between the Company and the Employee is
          terminated by mutual agreement on 14 August, 2001 and the employment
          agreement dated March 4, 1998 between the Employee and the Company
          (known at that time as Carrier1 AG) (the "employment agreement") is
          hereby terminated except Sections 4.02 [Noncompetition and
          Nonsolicitation Covenants], 4.03 [Infringement of Executive's
          Obligation], 4.04 [Specific Performance], 5.04 [Governing Law; Consent
          to Jurisdiction].

    2)    The Employee will be released from the workplace and paid twelve
          month's base salary in lieu of completing his contractual notice
          period. In return, the Employee agrees (i) to make himself available
          during the same twelve month period for transition activities and in
          any other way that the Company reasonably requests and (ii) to resign
          with immediate effect (or at such other later date as may be
          reasonably requested by the Company) from any and all corporate
          functions (including as a management or board member, or officer or
          any other similar function) which the Employee has with the Company or
          any other entity directly or indirectly holding a majority or minority
          equity interest in (including with correlative meanings, "owning") or
          controlling, or owned or controlled by, or under common ownership or
          control with the Company (each a "Carrier1 entity", and together
          "Carrier1") or any other legal entity to which he has been nominated
          or appointed by a Carrier1 entity for any such corporate function. The
          Employee hereby agrees to execute such documents or take such steps as
          may be necessary and appropriate to effectuate preceding clause (ii).
          Any vacation days not yet taken will be paid out. The applicable
          proceeds from the Employee's pension plan will be transferred in
          accordance with the applicable laws and statutes pursuant to the
          Employee's instructions.

    3)    The Employee will be entitled hereunder: (i) to retain custody of the
          34,130 shares in Carrier1 International SA that he purchased pursuant
          to the Securities Purchase Agreement (referred to hereafter), (ii) (a)
          to 213,333 vested options (with an exercise price of $2 US Dollar per
          ordinary share) that were granted to the Employee in March 1998 under
          the Carrier1 International SA 1999 Option Plan (together with all
          ancillary documents, the "1999 Option Plan") and (b) to immediate
          vesting as of the date hereof of all remaining unvested options
          granted under the 1999 Option Plan, provided that 71,111 of such
          remaining options shall not be exercisable until March 1, 2002 and
          71,111 of such remaining options shall not be

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          exercisable until March 1, 2003, (iii) to immediate vesting as of the
          date hereof of 22,222 options (with an exercise price of $15 US Dollar
          per ordinary share) representing 25% of 88,888 options granted to the
          Employee in December 2000 under the Carrier1 International SA 2000
          Option Plan (together with all ancillary documents, the "2000 Option
          Plan"), provided that such options shall not be exercisable until
          December 15, 2001, (iv) to immediate vesting as of the date hereof of
          50,000 options with an exercise price of $7.25 US Dollar per ordinary
          share) representing 25% of 200,000 options granted to the Employee in
          April 2001, provided that such options shall not be exercisable until
          April 27, 2002, and (v) until the second anniversary of the date
          hereof, to exercise options after they have become exercisable as
          provided herein and are otherwise exercisable; provided that, in each
          case of clauses (i)-(v) above, these shares, options and shares
          issuable upon exercise of the options remain subject to the
          restrictions of the applicable agreements (including the
          Securityholders Agreement dated as of March 1st, 1999 among Carrier1
          International SA, Carrier One LLC and the other securityholders,
          including the employee, the Securities Purchase Agreement dated as of
          March 1st, 1999 among Carrier1 International SA, Carrier One LLC and
          the purchasers from time to time, including the employee, and
          respectively the 1999 Option Plan and 2000 Option Plan, each as
          amended, novated, supplemented and restated from time to time). Except
          as set forth in clauses (iii) and (iv) above, all unvested options
          which were granted to the Employee in December 2000 and in April 2001,
          respectively, are hereby cancelled for no additional consideration.
          All applicable personal taxes are to be borne by the Employee and the
          Employee indemnifies and holds each Carrier1 entity harmless from and
          against any and all taxes payable by any Carrier1 entity which are in
          any way attributable or arise from the holding, exercising or
          disposing of any of the options or shares referred to above.

    4)    Except as provided in this agreement and except any compulsory
          provisions of the employment law, the Employee , for himself and his
          heirs and personal representatives, hereby fully and forever release
          the Company and their respective subsidiaries, affiliates, officers,
          directors, employees, agents and representatives, from any and all
          claims, liabilities, promises, contracts, and suits which have been or
          could have been asserted by Employee or on his behalf, in any forum by
          reason of matters arising prior to the date of this Agreement. The
          Company on its behalf and on behalf of each Carrier1 entity hereby
          fully and forever release the Employee from any and all claims,
          liabilities, promises, contracts, and suits which have been or could
          have been asserted by any or all of them or on their behalf, in any
          forum by reason of matters arising prior to the date of this
          Agreement, other than any claim, liability, promise, contract or suit
          based in material part on a state of facts or matter of which the
          Company or any other Carrier1 entity do not currently have actual
          knowledge and for which Employee could have been dismissed for "Cause"
          under the Employment Agreement.

    5)    The Employee shall not make any false, disparaging or derogatory
          remarks in public or private about the Institutional Investors as
          defined in Section 10 of the Securityholder's Agreement, the Company
          or any other Carrier1 entity (including their officers, directors,
          employees, agents, or representatives) or family members, as
          applicable) or about business affairs, prospects, products or services
          of Carrier1, except to the extent required by law, and then only after
          consultation with the Company to the maximum extent possible in order
          to maintain goodwill for each of the parties. Subject to the preceding
          sentence, the Employee may discuss his work experience with Carrier1
          with prospective employers or business partners but he shall refer any
          written or oral requests for other information or commentary regarding
          Carrier1 to Carrier1. The Employee may not divulge to any person not
          employed by Carrier1 to use for his own benefit or for the benefit of
          any person not employed by Carrier1 any confidential or non-public
          information obtained while associated with Carrier1. Confidential
          information shall include, without limitation, any information with
          respect to which Carrier1 has an obligation of confidentiality, any
          operational, technical, marketing, compensation, structural,
          organizational, financial or other information of any kind whatsoever
          concerning Carrier1. Confidential information shall not include
          information which is or becomes generally available

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          to the public other than as a result of a disclosure by the Employee.
          For a period of two years after the date of this letter, the Employee
          shall not directly or indirectly recruit, hire, solicit or induce or
          attempt to recruit, hire, solicit or induce, any Employee of Carrier1
          or any of its affiliated companies to terminate their employment with,
          or otherwise cease their relationship with such company or employ any
          such person in any manner or capacity. In case of each breach of an
          obligation set forth in this section 5) the Employee shall pay to the
          Company CHF50,000.00 and in addition he shall compensate the Company
          for any direct or indirect damages caused to any Carrier1 entity (in
          the context of the breach of an obligation set forth in this section
          5).

    6)    The Employee has to give back the property of any Carrier1 entity
          (e.g. mobile phone, company credit card, code card, office keys) no
          later than ten days from the date hereof and declares that he has not
          given any such items to any third party and that he does not have the
          intention to do so. The Employee, at his own cost, may retain use of
          the company car and exercise any right held to purchase the car at the
          end of the lease of the car and the Employee will assume all
          obligations under such lease


    7)    This agreement and the documents referred to herein contain the entire
          obligation of the parties hereto with respect to the subject matter
          hereof and supersede any prior expressions of intent or understandings
          with respect to this matter. This agreement may not be amended,
          modified or supplemented in any respect except by written agreement
          entered into by the parties hereto. If any one or more of the
          provisions contained in this agreement or any document in connection
          herewith shall be invalid, illegal or unenforceable, the validity,
          legality and enforceability of the remaining provisions contained
          herein shall not in any way be affected or impaired. In the event that
          the Employee breaches any provision of this agreement, the Company or
          any other entity shall be entitled to pursue any remedy available.

    8)    This entire agreement and understanding is governed by the laws of
          Switzerland. Any dispute, controversy or claim arising out of or
          relating to this agreement or the employment agreement shall be
          submitted to the courts of Zurich, Switzerland.

    9)    Please address any inquiries or notices hereunder to the General
          Counsel, Carrier1 International GmbH, Militarstrasse 36, CH - 8004
          Zurich, Switzerland.

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Zurich, Switzerland, August 14, 2001


CARRIER1 INTERNATIONAL GMBH                     CARRIER1 INTERNATIONAL GMBH



/s/  Kees van Ophem                             /s/ Thomas Zahay
------------------------------------            -----------------------------


------------------------------------            -----------------------------
Kees van Ophem                                  Thomas Zahay
Director Carrier1 International GmbH            Vice President - Human Resources
General Counsel and Executive Vice President
Corporate Services













Employee:



/s/  Stig Johansson

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