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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement" ) is
made as of this 11th day of December, 2006, by and between
Global Capacity Group, Inc., a
Texas corporation (the "Company"
), and John Abraham (the
"Employee" ).
RECITALS :
A. The Company is in the
telecommunications business.
B. The Employee has been
previously employed with Company and the Company and Employee wish
to enter into new terms of employment.
C. The Company desires to
employ the Employee and Employee desires to be employed by the
Company as a Vice President and Managing Director, subject to the
terms, conditions and covenants hereinafter set forth.
D. As a condition of the
Company employing the Employee, Employee has agreed not to divulge
to the public the Company’s confidential information, not to
solicit the Company’s vendors, customers or employees and not
to compete with the Company, all upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE , in
consideration of the foregoing and the agreements, covenants and
conditions set forth herein, the Employee and the Company hereby
agree as follows:
ARTICLE I
EMPLOYMENT
1.1 Employment .
The Company hereby employs, engages and hires Employee, and
Employee hereby accepts employment, upon the terms and conditions
set forth in this Agreement. The Employee shall serve as a Vice
President and Managing Director of the Company. The Employee shall
have and fully perform the duties and responsibilities required for
such job title and position and shall perform such additional
services and discharge such other responsibilities as may be, from
time to time, assigned or delegated by the Company, but in no case
shall there be any significant increase in the job duties from the
duties of the Employee prior to the signing of this Agreement. The
Employee shall report to the President and Chief Operating Officer
of the Company’s parent, Capital Growth Systems, Inc. The
Company and Employee shall develop, within a reasonable time after
the execution of this Agreement, a protocol of authority and
responsibilities for entering into contracts with vendors,
suppliers, customers, and other parties as is necessary to run the
Company in the ordinary course of business. Without limiting the
generality of the foregoing, this protocol shall provide that all
contracts shall be reviewed by the CEO of the Company and that the
Company may not become obligated on contracts in excess of $100,000
without prior approval of the Company’s CEO.
1.2 Activities and
Duties During Employment . Employee represents and warrants to
the Company that Employee is free to accept employment with the
Company and that Employee has no prior or other commitments or
obligations of any kind to anyone else which would hinder or
interfere with the performance of this Agreement.
Employee accepts the employment described in
Article I of this Agreement and agrees to devote the
necessary time to timely perform the duties and responsibilities
fully, including the performance of such other services and
responsibilities as the Company may, from time to time, stipulate.
Employee shall be present on the Company premises or actively
engaged in service to or on behalf of the Company during normal
business hours Monday through Friday, excluding business travel and
periods of personal leave, vacation and sick leave. However,
Employee shall not be required to relocate from his personal
residence or to be out of Houston, Texas for excessive amounts of
time.
ARTICLE II
TERM
2.1 Term . The
term of employment under this Agreement shall be three (3) years
(the "Initial Term"), commencing on the date of the Agreement. This
Agreement may be renewed by mutual agreement of the two parties for
subsequent one-year terms as agreed by the parties (each a "Renewal
Term"). The Initial Term and any Renewal Terms shall herein be
referred to as the "Employment Term".
2.2 Termination .
The Employment Term and employment of Employee may be terminated as
follows:
(a) By the Company
immediately for "Cause." For the purpose of this Agreement, "Cause"
shall mean: (i) conduct amounting to fraud, embezzlement, or
illegal misconduct in connection with Employee’s duties under
this Agreement; (ii) the conviction of Employee by a court of
proper jurisdiction of (or his or her written, voluntary and freely
given confession to) a crime which constitutes a felony (other than
a traffic violation) or an indictment that results in material
injury to the Company’s property, operation or reputation;
(iii) the willful failure of Employee to comply with reasonable
directions of the Company or any of the policies of the Company
after (A) written notice is delivered to the Employee describing
such willful failure and (B) Employee has failed to cure or take
substantial steps to cure such willful failure after a reasonable
time period (not to be less than 15 days) unless the Employee,
after discussion with counsel, in good faith believes, that the
directions of the Company (or its actions or inactions in response
to the Employee’s written notice) are illegal; or (iv)
willful misconduct or a material default by the Employee in the
performance or observance of any promise or undertaking of Employee
under this Agreement, which willful misconduct or default has
continued for a period of ten (10) business days after written
notice thereof from the Company to the Employee.
(b) Automatically, without
the action of either party, upon the death of Employee
("Death").
(c) By either party upon
the Total Disability of the Employee. The Employee shall be
considered to have a Total Disability for purposes of this
Agreement if he or she is unable by reason of accident or illness
to substantially perform his or her employment duties, and is
expected to be in such condition for periods totaling six (6)
months (whether or not consecutive) during any period of twelve
(12) months. Nothing herein
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shall limit the Employee’s right to receive
any payments to which Employee may be entitled under any disability
or employee benefit plan of the Company or under any disability or
insurance policy or plan. During a period of disability prior to
termination hereunder, Employee shall continue to receive his or
her full compensation (including base salary and bonus) and
benefits, subject to offset to the extent of any disability
insurance payments received by the Employee pursuant to any
disability insurance policy maintained by or paid for by the
Company.
(d) By the Employee upon
ten (10) business days notice to the Company for Good Reason, which
notice shall state the reason for termination. For the purpose of
this Agreement, "Good Reason" shall mean any (i) "Change in
Control" (as hereinafter defined) or (ii) any material failure by
the Company to comply with the provisions of this Employment
Agreement, including but not limited to, failure to timely pay any
part of Employee’s compensation (including salary or bonus)
or provide the benefits contemplated herein, or (iii) failure by
the Company to perform any of its material obligations under the
Agreement and Plan of Merger dated October 6, 2006 between the
Company, Capital Growth Systems, Inc., Global Capacity Merger Sub,
Inc., Employee and David P. Walsh (the "Merger Agreement") and
which is not remedied by the Company within ten (10) business days
after receipt by the Company of written notice thereof from
Employee; provided , that if such default is of a nature
that it cannot be reasonably cured within ten (10) day period (but
is curable), then if the Company shall have commenced an attempt to
cure such default within such ten (10) day period, the period to
cure the default shall be extended until the earlier of the date
which is forty-five (45) days after receipt of notice or the
Company has failed to diligently continue its efforts in a
reasonable manner to cure its default.
For purposes hereof, the term "Change in Control"
shall mean the occurrence of any of the following:
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(1)
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the Company: (a) consummates a merger or
consolidation which results in the voting securities of the Company
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) less than fifty percent (50%)
of the total voting power represented by the voting securities of
the Company of such surviving entity outstanding immediately after
such merger or consolidation; and (b) following such event, the
successor entity fails to employ Employee as follows (hereinafter,
the "Same Terms"): on substantially identical terms as are required
per this Agreement for the remaining Employment Term, and the
successor entity further continues to employ Employee in the same
city and with job responsibilities of a level substantially
equivalent to or greater than those presently in force and
effect;
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(2)
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a plan of complete liquidation of the Company or
an agreement for the sale or disposition by the Company of (in one
transaction or a series of transactions) all or substantially all
of the Company’s assets is
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consummated, and following such event the
successor entity (if any) fails to employ Employee on the Same
Terms; or
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(3)
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Company consummates a plan of complete
liquidation of the Company or an agreement for the sale or
disposition (in one transaction or a series of transactions) by the
Company of all or substantially all of the Company’s assets,
and following such event the successor entity (if any) fails to
employ Employee on the Same Terms;
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provided , however , that a public
offering of the stock of the Company irrespective of the amount of
voting securities owned by present shareholders after such offering
shall not be deemed to constitute a Change of Control; and provided
further that if Employee agrees to be employed by a successor
entity on the Same Terms and the successor entity fails to do so, a
Change in Control shall be deemed to have occurred.
(e) By the Employee
without Good Reason, and therefore in breach of this
Agreement.
(f) Upon reasonable
written notice to the Company, Employee shall be allowed to take a
one-time leave of absence from the Company for up to six months,
without pay, at any time during the Initial Term, and such leave of
absence will not be considered grounds for termination with
Cause.
2.3 Cessation of
Rights and Obligations: Survival of Certain Provisions . On the
date of expiration or earlier termination of the Employment Term
for any reason, all of the respective rights, duties, obligations
and covenants of the parties, as set forth herein, shall, except as
specifically provided herein to the contrary, cease and become of
no further force or effect as of the date of said termination, and
shall only survive as expressly provided for herein.
2.4 Cessation of
Compensation . In lieu of any severance under any severance
plan that the Company may then have in effect, and subject to (i)
the receipt of a full and unconditional release from Employee and
(ii) any amounts owed by the Employee to the Company under any
contract, agreement or loan document entered into after the date
hereof which relates solely to his or her employment with the
Company (including, but not limited to, loans made by the Company
to the Employee), the Company shall pay to the Employee, and the
Employee shall be entitled to receive, the following amounts within
thirty (30) days of the date of a termination of his or her
employment:
(a) Voluntary
Termination/Cause/Expiration of Term . Upon (i) Employee
terminating his or her employment without Good Reason as provided
in Section 2.2(e) , (ii) the expiration of the Employment
Term because the Employee or the Company elects to not extend the
Employment Term, or (iii) a termination of the Employment Term for
Cause by the Company as provided in Section 2.2(a) , the
Employee shall be entitled to receive his or her or her base salary
(which shall include any of his or her unused vacation pay for the
year of such termination) and expense reimbursements solely through
the date of termination.
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(b) Death or Total
Disability . Upon the termination of the Employment Term by
reason of the Death or Total Disability of the Employee, the
Employee (or, in the case of Death, his or her estate) shall be
entitled to receive his or her base salary (which shall include any
of his or her unused vacation pay for the year of such termination)
and expense reimbursements solely through the date of
termination.
(c) Involuntary .
Upon the termination of the Employment Term by the Employee for
Good Reason, the Employee shall be entitled to receive in a lump
sum the balance of his or her base salary for the remaining term of
the Employment Term (exclusive of any renewals of the then existing
term) (the "Severance Term"), together with prorated vacation pay
and expense reimbursement through the date of termination. In
addition, Employee shall be entitled to payment by the Company of
the premiums for group health insurance coverage otherwise payable
by Employee under the Consolidated Omnibus Budget Reconciliation
Act of 1985 ("COBRA") for the Severance Term. It shall be a
condition to Employee’s right to receive the payments
described above that Employee shall be in compliance with all of
the Employee’s obligations which survive termination hereof,
including without limitation those arising under Articles IV and
V hereof. The payments described above are intended to be in
lieu of all other payments to which Employee might otherwise be
entitled in respect of termination of Employee’s employment
without Cause unless otherwise required by law or under other
agreements between the parties.
2.5 Business
Expenses .
(a) Reimbursement
. The Company shall reimburse the Employee for all reasonable,
ordinary, and necessary business expenses incurred by him or her in
connection with the performance of his or her duties hereunder,
including, but not limited to, ordinary and necessary travel
expenses and entertainment expenses. The reimbursement of business
expenses will be governed by the policies of the Company from
time-to-time and the terms otherwise set forth herein.
(b) Accounting .
The Employee shall provide the Company with an accounting of his or
her expenses, which accounting shall clearly reflect which expenses
were incurred for proper business purposes in accordance with the
policies adopted by the Company and as such are reimbursable by the
Company. The Employee shall provide the Company with such other
supporting documentation and other substantiation of reimbursable
expenses as will conform to Internal Revenue Service or other
requirements. All such reimbursements shall be payable by the
Company to the Employee within a reasonable time after r
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