UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) : September 12, 2011
 
Global Telecom & Technology, Inc.
(Exact Name of Registrant as Specified in Charter)

 
Delaware
000-51211
20-2096338
(State or Other Jurisdiction of Incorporation)
(Commission File Number)
(I.R.S. Employer Identification No.)
   
8484 Westpark Drive
Suite 720
McLean, VA 22102
(Address of Principal Executive Offices) (Zip Code)
 
Registrant’s Telephone Number, Including Area Code: (703) 442-5500
   
N/A
(Former Name or Former Address, if Changed Since Last Report)
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (See General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 


 
 
 


Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
 
Amendment to Eric Swank Employment Agreement
 
On September 12, 2011, Global Telecom & Technology, Inc. (the “Company”) entered into an amendment  (the “Amendment”) to the employment agreement between the Company and Eric Swank, the Company’s Chief Financial Officer, dated February 2, 2009.  The Amendment provides that all equity grants made by the Company to Mr. Swank will immediately vest upon (1) a sale of all or substantially all of the assets or business of the Company to a third party or (2) upon a business combination in which the stockholders of the Company immediately prior to the consummation of such transaction own less than a majority of the voting securities of the surviving entity. 
 
The foregoing description of the Amendment is qualified in its entirety by reference to the full text of the Amendment, a copy of which is attached hereto as Exhibit 10.1.
 
Amendment to Richard D. Calder Employment Agreement
 
On September 12, 2011, the Company entered into an amendment (the “Second Amendment”) to the employment agreement between the Company and Richard D. Calder, the Company’s President and Chief Executive Officer, dated May 7, 2007, as amended.  The Second Amendment adds provisions to Mr. Calder’s existing employment agreement intended to address the potential impact of Section 409A of the Internal Revenue Code of 1986, as amended (the "Code").
 
The foregoing description of the Second Amendment is qualified in its entirety by reference to the full text of the Second Amendment, a copy of which is attached hereto as Exhibit 10.2.
 
Chris McKee Employment Agreement
 
On September 12, 2011, the Company approved an employment agreement (the “Employment Agreement”) between the Company and Chris McKee, the Company’s General Counsel and Secretary.  Mr. McKee has been employed with the Company since April 2008.
 
Pursuant to the terms of the Employment Agreement, Mr. McKee will be paid a salary at the rate of $210,000 per annum.  In addition, he will be eligible to earn up to a $90,000 cash bonus with respect to 2011, and his bonus eligibility in subsequent years would be set by the Board but would be intended to reflect a comparable ratio of bonus eligibility to salary.  In connection with the Employment Agreement, Mr. McKee has been granted 165,500 restricted shares of the Company’s common stock and options to purchase 69,500 shares of the Company’s common stock, each pursuant to the Company’s 2006 Employee, Director and Consultant Stock Plan.  One-quarter of the shares of restricted stock and one-quarter of the options will vest on each anniversary of the effective date of the Employment Agreement.  In the event Mr. McKee’s employment with the Company is terminated by the Company without “cause” (as defined in the Employment Agreement), he will vest in a portion of the shares of restricted stock and options referred to above that are subject to vesting in such contract year based upon the number of full months that he is employed by the Company during such year.  In addition, the Employment Agreement provides that all equity grants made by the Company to Mr. McKee will immediately vest upon (1) a sale of all or substantially all of the assets or business of the Company to a third party or (2) upon a business combination in which the stockholders of the Company immediately prior to the consummation of such transaction own less than a majority of the voting securities of the surviving entity.  In the event the Company undergoes a Corporate Transaction (as defined in the Company’s 2006 Employee, Director and Consultant Stock Plan) that does not result in full vesting of Mr. McKee’s restricted stock and options referred to above but as a result of which Mr. McKee’s employment with the Company is subsequently terminated by the Company without “cause”, he will be vest as if the next annual vesting date occurred as of the effective date of such termination.
 
 
 
 
 
The Employment Agreement provides that Mr. Mckee during the period of his employment and continuing for a period of one year following the termination of his employment he will not: (1) compete with the Company or its subsidiaries or affiliates, (2) solicit business from any of the customers of the Company or its subsidiaries or affiliates with respect to products or services that are the same as or similar to the products or services or proposed products or services of the Company or its subsidiaries or affiliates or (3) solicit any employee, consultant or contractor to terminate his, her or its employment with or services to the Company or its subsidiaries or affiliates.  In addition, pursuant to the terms of the Employment Agreement, Mr. Mckee entered into an assignment of inventions and confidentiality agreement, pursuant to which he has agreed to maintain in confidence all of the proprietary information of the Company and its subsidiaries and affiliates, and to assign to the Company any inventions conceived by him in the course of his employment.
 
The employment agreement will remain in effect until it is terminated under any of the following circumstances: (1) upon Mr. Mckee’s death, (2) upon the disability of Mr. Mckee that prevents him from performing his duties to the Company for a period of more than 180 days in the aggregate in any 12-month period, (3) upon written notice from the Company, terminating his employment for “cause,” as defined in the employment agreement, (4) upon written notice from the Company terminating his employment without “cause,” (5) upon written notice from Mr. Mckee, terminating his employment for “good reason,” as defined in the employment agreement, or (6) upon not less than 30 days written notice from Mr. Mckee, terminating his employment without “cause.”
 
In the event of Mr. Mckee’s disability, he would be entitled to a continuation of health benefits for twelve months following the termination of his employment.  In the event that his employment is terminated by the Company without “cause,” or by Mr. Mckee for “good reason,” he would be entitled to receive his base salary and health benefits for six months following the termination of his employment, which period would increase to twelve months from and after the first anniversary of the effective date of the Employment Agreement except under certain, limited circumstances.
 
The Employment Agreement also provides for indemnification of Mr. McKee and it includes provisions intended to address the potential impact of  Section 409A of the Code.
 
The foregoing description of the Employment Agreement is qualified in its entirety by reference to the full text of the Employment Agreement, a copy of which is attached hereto as Exhibit 10.3.
 
Item 9.01. Financial Statements and Exhibits.
 
(d) Exhibits.
 
10.1
  
Amendment No. 1 to the Employment Agreement between the Company and Eric Swank., dated September 12, 2011.
10.2
 
Amendment No. 2 to the Employment Agreement between the Company and Richard D. Calder, dated September 12, 2011.
10.3
 
Employment Agreement between the Company and Chris McKee, dated September 12, 2011.
 
 
 
 

SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
     
GLOBAL TELECOM & TECHNOLOGY, INC.
   
By
/s/ Chris McKee 
  Chris McKee
  Secretary and General Counsel
 
Date: September 16, 2011
 

 
 
 

EXHIBIT INDEX
 
10.1
  
Amendment No. 1 to Employment Agreement for Eric Swank, dated September 12, 2011.
10.2
 
Amendment No. 2 to Employment Agreement for Richard D. Calder, dated September 12, 2011.
10.3
 
Employment Agreement for Chris McKee, dated September 12, 2011.


 
 
 
 

Exhibit 10.1
Amendment No. 1
To Employment Agreement
 
This Amendment No. 1 ("Amendment") to the Employment Agreement (“Agreement”) is made as of September 12, 2011   ("Amendment Effective Date") by and between Global Telecom & Technology, Inc. (“Company”) and Eric Swank (“Executive”).

A.        
Company and Executive entered into the Agreement on February 2, 2009.
B.        
Company and Executive desire to amend the Agreement in accordance with the terms of this Amendment.

Accordingly, the parties, intending to be legally bound, hereby agree as follows:

1.   Definitions. Unless otherwise defined in this Amendment, all capitalized terms shall have the meanings ascribed to such terms in the Agreement.

2. Vesting of Equity Upon a Change of Control.

Section 5.4 of the Agreement is amended by adding the following language at the end of Section 5.4:

All existing equity grants, including restricted stock, stock options, and all other equity grants of any type, will immediately vest upon the “Change of Control” of the Company.  For purposes of this Agreement, "Change of Control" shall mean: (i) The Company is merged, consolidated or reorganized into or with another corporation or other legal person (an “Acquirer”) and, as a result of such merger, consolidation or reorganization, less than fifty percent (50%) of the outstanding voting securities entitled to vote generally in the election of directors of the surviving, resulting or acquiring corporation or other legal person are owned, directly or indirectly, in the aggregate by the stockholders of the Company immediately prior to such merger, consolidation or reorganization, other than by the Acquirer or any corporation or other legal person controlling, controlled by or under common control with the Acquirer; (ii) the Company sells all or substantially all of its business and/or assets to an Acquirer, of which less than fifty percent (50%) of the outstanding voting securities entitled to vote generally in the election of directors are owned, directly or indirectly, in the aggregate by the stockholders of the Company immediately prior to such sale, other than by any corporation or other legal person controlling, controlled by or under common control with the Acquirer; or (iii) any other transaction or series of related transactions having an economic effect substantially equivalent to any of the foregoing in subsections (i) or (ii) immediately above.

Notwithstanding the foregoing, the following types of transactions shall not be deemed to be a Change of Control: (a) any transaction entered into among or between the Company and stockholders of the Company if immediately prior to such a transaction, the acquiring stockholders held thirty percent (30%) of the outstanding voting securities; or (b) any acquisition by the Company or any of its subsidiaries.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be effective as of the Amendment Effective Date stated above.


GLOBAL TELECOM &
TECHNOLOGY, INC.                                            
 
 
By:    /s/ Chris McKee   By: /s/ Eric Swank   
        Eric Swank  
Print Name:   Chris McKee        
 
Print Title:    General Counsel        
 
 
 
 
 
 
 
 
Exhibit 10.2
 
Amendment No. 2
To Employment Agreement
 
This Amendment No. 2 ("Amendment") to the Employment Agreement (“Agreement”) is made as of September 12, 2011   ("Amendment Effective Date") by and between Global Telecom & Technology, Inc. (“Company”) and Richard D. Calder, Jr. (“Executive”).

A.        
Company and Executive entered into the Agreement on May 7, 2007 and as amended by Amendment No. 1.
B.        
Company and Executive desire to amend the Agreement in accordance with the terms of this Amendment.

Accordingly, the parties, intending to be legally bound, hereby agree as follows:

1.  A new Section 10 is hereby added to the Agreement to read as follows:

10.   Section 409A   The parties intend that any compensation, benefits and other amounts payable or provided to the Executive under this Agreement be paid or provided in compliance with Section 409A of the Code and all regulations, guidance, and other interpretative authority issued thereunder (collectively, “Section 409A”) such that there will be no adverse tax consequences, interest, or penalties for the Executive under Section 409A as a result of the payments and benefits so paid or provided to him. The parties agree to modify this Agreement, or the timing (but not the amount) of the payment of the severance or other compensation, or both, to the extent necessary to comply with Section 409A. In addition, notwithstanding anything to the contrary contained in any other provision of this Agreement, the payments and benefits to be provided to the Executive under this Agreement shall be subject to the provisions set forth below.

(a)  
Any payment subject to Section 409A that is triggered by a termination from employment shall be triggered by a “separation from service,” as defined in the regulations issued under Section 409A.
 
(b)  
If the Executive is a “specified employee” within the meaning of the Section 409A at the time of the Executive’s “separation from service” within the meaning of Section 409A, then any payment otherwise required to be made to the Executive under this Agreement on account of the Executive’s separation from service, to the extent such payment (after taking in to account all exclusions applicable to such payment under Section 409A) is properly treated as deferred compensation subject to Section 409A, shall not be made until the first business day after (i) the later of March 8, 2013 or the expiration of six months from the date of the Executive’s separation from service, or (ii) if earlier, the date of the Executive’s death (the “Delayed Payment Date”). On the Delayed Payment Date, there shall be paid to the Executive or, if the Executive has died, to the Executive’s estate, in a single cash lump sum, an amount equal to aggregate amount of the payments delayed pursuant to the preceding sentence, plus interest thereon at the Delayed Payment Interest Rate (as defined below) computed from the date on which each such delayed payment otherwise would have been made to the Executive until the Delayed Payment Date. For purposes of the foregoing, the “Delayed Payment Interest Rate” shall mean the national average annual rate of interest payable on jumbo six-month bank certificates of deposit, as quoted in the business section of the most recently published Sunday edition of The New York Times preceding the date as of which Executive is treated as having incurred a separation from service for purposes of Section 409A.
 
(c)  
All expenses eligible for reimbursement hereunder that are taxable to the Executive shall be paid to the Executive no earlier than in the seventh month after separation
 
 
 
 
 
 
from service and no later than December 31 of the calendar year following the calendar year in which such expenses were incurred. The expenses incurred by the Executive in any calendar year that are eligible for reimbursement under this Agreement shall not affect the expenses incurred by the Executive in any other calendar year that are eligible for reimbursement hereunder. The Executive’s right to receive any reimbursement hereunder shall not be subject to liquidation or exchange for any other benefit.
 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to be effective as of the Amendment Effective Date stated above.
 
 
GLOBAL TELECOM &
TECHNOLOGY, INC.                                            
 
 
By:     /s/ Chris McKee   By: /s/ Richard D. Calder, Jr.   
        Richard D. Calder, Jr.  
Print Name:   Chris McKee        
 
Print Title:     General Counsel        
 
 
 
Exhibit 10.3
 
REVISED EMPLOYMENT AGREEMENT
 
    
This Revised Employment Agreement (the “ Agreement ”) is made between Global Telecom & Technology, Inc., a Delaware corporation (the “ Company ”), and Chris McKee (the “ Executive ”), is entered into as of September 12, 2011 and shall become effective immediately upon signature and has already been approved by the Compensation Committee of the Company’s Board of Directors.  This Agreement amends and replaces a prior Employment Term Sheet between the Company and the Executive entered into as of April 28, 2008 except that the Executive’s employment as General Counsel remains as having an April 28, 2008 start date (“Effective Date”).

1.  
Employment; Scheduled Term . Subject to the terms and conditions of this Agreement, Company agrees to employ Executive, and Executive accepts employment and agrees to be employed by Company during the time period commencing on the Effective Date and ending on the termination of this Agreement as provided in Section 7 below. The obligations of Executive set forth in the Executive Assignment of Inventions and Confidentiality Agreement referred to in Section 6 below shall survive the Scheduled Term and shall survive the termination of Executive’s employment, regardless of the cause of such termination. Executive hereby represents and warrants to Company that Executive is free to enter into and fully perform this Agreement and the agreements referred to herein without breach or violation of any agreement or contract to which Executive is a party or by which Executive is bound.

2.  
Duties . Executive shall serve as General Counsel of Company with such duties and responsibilities as may from time to time be assigned to Executive by the Chief Executive Officer and the Board of Directors of Company (the “ Board ”), commensurate with and customarily assigned to Executive’s title and position described in this sentence. The duties and services to be performed by Executive under this Agreement are collectively referred to herein as the “Services” . Executive shall report directly to the Chief Executive Officer. Executive agrees that to the best of his ability and experience he shall at all times conscientiously perform all of the duties and obligations assigned to him under the terms of this Agreement. At Company’s option, it will be entitled to reasonable use of Executive’s name in promotional, advertising and other materials used in the ordinary course of its business without additional compensation unless prohibited by law. Executive initially shall report to the offices located in McLean, Virginia; provided that Executive’s duties will include reasonable travel , including but not limited to travel to offices of Company, its subsidiaries and affiliates and current and prospective customers as is reasonably necessary and appropriate to the performance of Executive’s duties hereunder. Executive will comply with and be bound by Company’s operating policies, procedures, and practices from time to time in effect during Executive’s employment.

3.  
Exclusive Service . During the term of employment, Executive will not perform services for any other entity if such service would be in conflict with the Company’s business interests. Executive will apply his skill and experience to the performance of his duties and advancing Company’s interests in accordance with Executive’s experience and skills. Accordingly, Executive shall not engage in any outside work, business, consulting activity or render any commercial or professional services, directly or indirectly, for or on behalf of himself or any other person or organization, whether for compensation or otherwise, if such services would be in conflict with the Company’s business interests, except with the prior written approval of Company and Executive shall otherwise do nothing inconsistent with the performance of Executive’s duties hereunder.
 
4.  
Non-Competition and Other Covenants
 
4.1 Non-Competition Agreement . Beginning the Effective Date and continuing for so long thereafter as Executive is employed by Company or a subsidiary or affiliate of Company, and for one (1) year following the termination of Executive’s employment with Company (collectively, the “Restricted Period”), Executive will not, directly or indirectly, individually or as
 
 
 
 
 
an employee, partner, officer, director or shareholder (except to the extent permitted in Section 3 above) or in any other capacity whatsoever of or for any person, firm, partnership, company or corporation other than Company or its subsidiaries:

(a) Own, manage, operate, sell, control or participate in the ownership, management, operation, sales or control of or be connected in any manner with any business engaged, in the geographical areas referred to in Section 4.2 below, in the design, research, development, marketing, sale, or licensing of managed data network services that are substantially similar to or competitive with the business of Company and any of its affiliates; or

(b) Recruit, attempt to hire, solicit, or assist others in recruiting or hiring, in or with respect to the geographical areas referred to in Section 4.2 below, any person who is an employee of Company or any of its subsidiaries or induce or attempt to induce any such employee to terminate his employment with Company or any of its subsidiaries.
 
4.2 Geographical Areas . The geographical areas in which the restrictions provided for in this Section 4 apply include all cities, counties and states of the United States, and all other countries in which Company (or any of its subsidiaries) are conducting business or are contemplating conducting business at the time. Executive acknowledges that the scope and period of restrictions and the geographical area to which the restrictions imposed in this Section 4 applies are fair and reasonable and are reasonably required for the protection of Company and that this Agreement accurately describes the business to which the restrictions are intended to apply. Executive acknowledges that the covenants set forth in this Section 4 have been granted in consideration for his employment by the Company.

4.3 Non-Solicitation of Customers . In addition to, and not in limitation of, the non-competition covenants of Executive set forth above in this Section 4, Executive agrees with Company that, for the Restricted Period, Executive will not, either for Executive or for any other person or entity, directly or indirectly (other than for Company and any of its subsidiaries or affiliates), solicit business from, or attempt to sell, license or provide the same or similar products or services as are then provided, or are then contemplated of being provided, by Company or any subsidiary or affiliate of Company to any customer of Company.

4.4 Non-Solicitation of Executives or Consultants In addition to, and not in limitation of, the non-competition covenants of Executive set forth above in this Section 4, Executive agrees with Company that, for the Restricted Period, Executive will not, either for Executive or for any other person or entity, directly or indirectly, solicit, induce or attempt to induce any employee, consultant or contractor of Company or any affiliate of Company, to terminate his or her employment or his, her or its services with, Company or any subsidiary or affiliate of Company or to take employment with another party.

4.5 Amendment to Retain Enforceability . It is the intent of the parties that the provisions of this Section 4 will be enforced to the fullest extent permissible under applicable law. If any particular provision or portion of this Section is adjudicated to be invalid or unenforceable, this Agreement will be deemed amended to revise that provision or portion to the minimum extent necessary to render it enforceable. Such amendment will apply only with respect to the operation of this paragraph in the particular jurisdiction in which such adjudication was made.

4.6 Injunctive Relief . Executive acknowledges that any breach of the covenants of this Section 4 will result in immediate and irreparable injury to Company and, accordingly, consents that the Company shall have the right to seek injunctive relief and such other equitable remedies for the benefit of Company as may be appropriate in the event such a breach occurs or is threatened. The foregoing remedies will be in addition to all other legal remedies to which Company may be entitled hereunder, including, without limitation, monetary damages.
 
5.  
Compensation and Benefits
   
 
 
 
 
5.1 Salary . During the term of this Agreement, Company shall pay Executive a salary of $210,000 per annum. Executive’s salary shall be payable as earned at Company’s customary payroll periods in accordance with Company’s customary payroll practices. Executive’s salary shall be subject to review and adjustment in accordance with Company’ customary practices concerning salary review for similarly situated employees of Company or its subsidiaries.

5.2 Benefits   Executive will be eligible to participate in Company’s employee benefit plans of general application as they may exist from time to time, including without limitation those plans covering pension and profit sharing, executive bonuses, stock purchases, stock options, and those plans covering life, health, and dental insurance in accordance with the rules established for individual participation in any such plan and applicable law. Executive will receive such other benefits, including vacation, holidays and sick leave, as Company generally provides to its employees holding similar positions as that of Executive as well as any future benefits or changes to existing benefits offered to similarly situated employees of the Company or its subsidiaries, regardless of Executives service tenure, including but not limited to enhanced vesting terms or conditions for Equity-Based Grants, expense allowances, deferred compensation plans. Executive has received a summary of Company’s standard employee benefits policies in effect as of the date hereof. The Company reserves the right to change or otherwise modify, in its sole discretion, the benefits offered herein to conform to the Company’s general policies as may be changed from time to time during the term of this Agreement.

5.3 Bonus Executive will be eligible to earn up to a $90,000 cash bonus yearly during his employment with Company. Executive’s Bonus eligibility for subsequent years is intended to reflect a comparable ratio of Bonus eligibility to Salary.  However, Executive’s Bonus eligibility will be subject to review and adjustment in accordance with Company’s customary practices concerning compensation review for similarly situated employees of the Company or its subsidiaries.  All bonus payments would be awarded subject to the sole discretion of the Board, based upon the Board’s evaluation of the performance of Executive and the Company.

5.4 Equity-Based Grants Executive has been granted 165,500 shares of restricted stock of Company under Company’s 2006 Employee, Director & Consultant Stock Plan (the “ Plan ” ). Such shares of restricted stock shall vest in four (4) equal amounts over a four (4) year period with the first 25% of restricted stock granted vesting on the first anniversary of the effective date of such grant, all as more particularly set forth in the restricted stock agreement customarily used by the Company pursuant to the Plan. Executive has also been granted 69,500 options. Such options shall vest in four (4) equal amounts over a four (4) year period with the first 25% of granted options vesting on the first anniversary of the effective date of such grant, all as more particularly set forth in the stock option agreement customarily used by the Company pursuant to the Plan. With respect specifically to the preceding equity awards identified in this Section 5.4, Executive and Company agree that: (i) in the event that Executive’s employment with Company is terminated by Company without Cause (as defined herein), Executive shall be entitled to additional vesting of a pro rata portion (based upon his service through the effective date of termination) of such equity awards determined as if vesting was on a monthly basis over a 12 month period; or (ii) in the event that the Company undergoes a Corporate Transaction (as defined in the Plan) and Executive’s employment with Company is terminated by Company without Cause as a result of such Corporate Transaction, Executive shall be entitled to additional vesting of such equity awards as if the next applicable vesting date occurred as of the effective date of such termination. In addition to the foregoing equity awards, Executive may be eligible to receive additional restricted stock, option, or other equity-based grants in such amounts, at such times and with such vesting schedules and other terms as are determined from time to time by the Board.

All existing equity grants, including restricted stock, stock options, and all other equity grants of any type, will immediately vest upon the “Change of Control” of the Company.  For purposes of this Agreement, "Change of Control" shall mean: (i) The Company is merged, consolidated or reorganized into or with another corporation or other legal person (an “Acquirer”) and, as a result
 
 
 
 
 
of such merger, consolidation or reorganization, less than fifty percent (50%) of the outstanding voting securities entitled to vote generally in the election of directors of the surviving, resulting or acquiring corporation or other legal person are owned, directly or indirectly, in the aggregate by the stockholders of the Company immediately prior to such merger, consolidation or reorganization, other than by the Acquirer or any corporation or other legal person controlling, controlled by or under common control with the Acquirer; (ii) the Company sells all or substantially all of its business and/or assets to an Acquirer, of which less than fifty percent (50%) of the outstanding voting securities entitled to vote generally in the election of directors are owned, directly or indirectly, in the aggregate by the stockholders of the Company immediately prior to such sale, other than by any corporation or other legal person controlling, controlled by or under common control with the Acquirer; or (iii) any other transaction or series of related transactions having an economic effect substantially equivalent to any of the foregoing in subsections (i) or (ii) immediately above.

Notwithstanding the foregoing, the following types of transactions shall not be deemed to be a Change of Control: (a) any transaction entered into among or between the Company and stockholders of the Company if immediately prior to such a transaction, the acquiring stockholders held thirty percent (30%) of the outstanding voting securities; or (b) any acquisition by the Company or any of its subsidiaries.

5.5 Expenses . Company will reimburse Executive for all reasonable and necessary expenses incurred by Executive in connection with Company’s business are in accordance with Company’s applicable policy and are properly documented and accounted for in accordance with the requirements of the Internal Revenue Service.

6.  Proprietary Rights   Executive hereby agrees to execute an Executive Invention Assignment and Confidentiality Agreement with Company in substantially the form attached hereto as Exhibit A .
     
7.  Termination

7.1 Upon Death . The Executive’s employment hereunder shall terminate automatically upon the death of the Executive. The Company shall pay to the Executive’s beneficiaries or estate, as appropriate, the compensation to which he is entitled pursuant to Section 5.1 through the end of the month in which death occurs.

7.2 Upon Disability . If, in the opinion of a medical doctor specializing in the appropriate medical specialty, the Executive is prevented from properly performing his duties hereunder by reason of any physical or mental incapacity for a period of more than 180 days in the aggregate in any twelve month period, then, to the extent permitted by law, the Executive’s employment hereunder shall terminate and Executive shall receive all compensation due him pursuant to Section 5.1 through the date of termination, as well as the continuation of health benefits for a period of twelve (12) months after the termination of his employment. Nothing in this Section 7.2 shall affect the Executive’s rights under any Company sponsored disability plan in which he is a participant.

7.3 By Company for Cause . Company may terminate the Executive’s employment hereunder for Cause (as defined below) at any time by giving written notice to the Executive. The Company shall pay Executive the compensation to which he is entitled pursuant to Section 5.1 through the end of the day of such termination. For purposes of this Agreement, the Company shall have “Cause” to terminate the Executive’s employment during the term of this Agreement only if: (i) the Executive materially breaches any provision of this Agreement after written notice identifying the substance of the material breach; (ii) Executive fails or refuses to comply with any lawful direction or instruction of Company’s Board of Directors, which failure or refusal is not timely cured, (iii) the Executive commits an act of fraud, embezzlement, misappropriation of funds, or dishonesty, (iv) the Executive commits a breach of his fiduciary duty based on a good faith determination by the Board and after reasonable opportunity to cure if such breach is curable, (v) the Executive is grossly negligent or engages in willful misconduct in the performance of his duties hereunder, and
 
 
 
 
 
fails to remedy such breach within ten (10) days of receiving written notice thereof from the Board, provided, however, that no act, or failure to act, by the Executive shall be considered “grossly negligent” or an act of “willful misconduct” unless committed without good faith and without a reasonable belief that the act or omission was in or not opposed to the Company’s best interest; (vi) the Executive is convicted of a felony or a crime of moral turpitude; or (vi) Executive has a drug or alcohol dependency.

7.4 By Company without Cause; By Executive for Good Reason . The Company may terminate the Executive’s employment hereunder at any time, without any Cause, and Executive may resign for Good Reason (as hereinafter defined), without any liability other than to pay to the Executive (i) his base salary through the effective date of termination; and (ii) the continuation of base salary and health benefits for a period of six (6) months after the termination of his employment; provided, further, however, with respect to preceding clause (ii) that on the first anniversary of the Effective Date, as long as Executive remains employed by Company pursuant to this Agreement at such time, and provided further that: (a) no notice of intent to terminate Executive for Cause had been provided by Company since the Effective Date; (b) no event, act, or failure to act had occurred since the Effective Date that would give rise (or had already given rise) to the Company’s right to deliver a notice of intent to terminate for Cause pursuant to Section 7.3 hereof; and (c) there is existing as of that date no event, act, or failure to act that would give rise (or had already given rise) to the Company’s right to deliver a notice of intent to terminate for Cause pursuant to Section 7.3 hereof, Executive shall thereafter be entitled instead to receive twelve (12) months continuation of base salary and health benefits in the event of any Company termination thereafter without Cause or Executive’s resignation thereafter for Good Reason.

7.5 Definition of Good Reason . For purposes hereof, “Good Reason” shall mean a termination by the Executive within ninety (90) days following (i) the relocation of the primary office of the Executive more than ten (10) miles from McLean, Virginia, without the consent of Executive, (ii) a material change in the Executive’s duties such that he is no longer the General Counsel of the Company; (iii) the assignment to the Executive of duties that are inconsistent with his position or that materially alter his ability to function as General Counsel; or (iv) a reduction in the Executive’s total base compensation as set forth in Sections 5.1, 5.2, 5.3 and 5.4.

7.6 By Executive without Cause . The Executive may terminate his employment hereunder with thirty (30) days notice at any time.

7.7 Surrender of Records and Property . Upon termination of his employment with Company for any reason, the Executive shall deliver promptly to Company all records, manuals, books, blank forms, documents, letters, memoranda, notes, notebooks, reports, data, tables, calculations or copies thereof, whether in tangible or electronic format or media, which are the property of Company or which relate in any way to the business, products, practices or techniques of Company, and all other property, trade secrets and confidential information of Company, including, but not limited to, all documents or electronic records which in whole or in part contain any trade secrets or confidential information of Company, which in any of these cases are in his possession or under his control.

7.8 Survival . Notwithstanding any termination of the Executive’s employment hereunder, and unless specifically provided therein, the Executive shall remain bound by the provisions of this Agreement which specifically relate to periods, activities or obligations upon or subsequent to the termination of the Executive’s employment. Further, Company’s obligation to pay severance upon Company’s termination of the Executive’s employment without cause, or termination by Executive for Good Reason, shall survive termination of this Agreement.
 
      8.  Miscellaneous

8.1 Severability   If any provision of this Agreement shall be found by any arbitrator or court of competent jurisdiction to be invalid or unenforceable, then the parties hereby waive such
 
 
 
 
 
provision to the extent that it is found to be invalid or unenforceable and to the extent that to do so would not deprive one of the parties of the substantial benefit of its bargain. Such provision shall, to the extent allowable by law and the preceding sentence, be modified by such arbitrator or court so that it becomes enforceable and, as modified, shall be enforced as any other provision hereof, all the other provisions continuing in full force and effect.

8.2 Remedies   Company and Executive acknowledge that the service to be provided by Executive is of a special, unique, unusual, extraordinary and intellectual character, which gives it peculiar value the loss of which cannot be reasonably or adequately compensated in damages in an action at law. Accordingly, Executive and Company hereby consent and agree that for any breach or violation by Executive of any of the provisions of this Agreement including, without limitation, Section 3 and 4, a restraining order and/or injunction may be sought against either of the parties, in addition to any other rights and remedies the parties may have, at law or equity, including without limitation the recovery of money damages.

8.3 No Waiver   The failure by either party at any time to require performance or compliance by the other of any of its obligations or agreements shall in no way affect the right to require such performance or compliance at any time thereafter. The waiver by either party of a breach of any provision hereof shall not be taken or held to be a waiver of any preceding or succeeding breach of such provision or as a waiver of the provision itself. No waiver of any kind shall be effective or binding, unless it is in writing and is signed by the party against whom such waiver is sought to be enforced.

8.4 Assignment . This Agreement and all rights hereunder are personal to Executive and may not be transferred or assigned by Executive at any time. Company may assign its rights, together with its obligations hereunder, to any subsidiary, affiliate or successor of Company, or in connection with any sale, transfer or other disposition of all or substantially all the business and assets of Company or any of their respective subsidiaries or affiliates, whether by sale of stock, sale of assets, merger, consolidation or otherwise; provided , that any such assignee assumes Company’s obligations hereunder. This Agreement shall be binding upon, and inure to the benefit of, the persons or entities who are permitted, by the terms of this Agreement, to be successors, assigns and personal representatives of the respective parties hereto.

8.5 Withholding   All sums payable to Executive hereunder shall be reduced by all federal, state, local and other withholding and similar taxes and payments required by applicable law to be withheld by Company.

8.6 Entire Agreement   This Agreement (and the exhibit(s) hereto) constitutes the entire and only agreement and understanding between the parties relating to employment of Executive with Company and this Agreement supersedes and cancels any and all previous contracts, arrangements or understandings with respect to Executive’s employment; except that the Executive Invention Assignment and Confidentiality Agreement shall remain as an independent contract and shall remain in full force and effect according to its terms.

8.7 Amendment   This Agreement may be amended, modified, superseded, cancelled, renewed or extended only by an agreement in writing executed by both parties hereto.

8.8 Notices   All notices and other communications required or permitted under this Agreement shall be in writing and hand delivered, sent by telecopier, sent by certified first class mail, postage pre-paid, or sent by nationally recognized express courier service. Such notices and other communications shall be effective upon receipt if hand delivered or sent by telecopier, five (5) days after mailing if sent by mail, and one (l) day after dispatch if sent by express courier, to the following addresses, or such other addresses as any party shall notify the other parties:
 
If to Company:
 
Global Telecom & Technology, Inc.
   
   
8484 Westpark Drive, Suite720
   
 
 
 
 
 
   
McLean, VA 22102
   
   
Attn: Rick Calder, CEO
   
         
If to Executive:
       
         
   
Chris McKee
1612 Chathams Ford Place
Vienna, VA 22182
   
 
8.9 Binding Nature   This Agreement shall be binding upon, and inure to the benefit of, the successors and personal representatives of the respective parties hereto.

8.10 Headings   The headings contained in this Agreement are for reference purposes only and shall in no way affect the meaning or interpretation of this Agreement. In this Agreement, the singular includes the plural, the plural included the singular, the masculine gender includes both male and female reference, and the word “or” is used in the inclusive sense.

8.11 Counterparts   This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which, taken together, constitute one and the same agreement.

8.12 Governing Law . This Agreement and the rights and obligations of the parties hereto shall be construed in accordance with the laws of the State of Delaware, without giving effect to the principles of conflict of laws.

9.   Indemnification

9.1 Corporate Acts :   In his/her capacity as a director, manager, officer, or employee of the Company or serving or having served any other entity as a director, manager, officer, or the Executive at the Company’s request, the Executive shall be indemnified and held harmless by the Company to the fullest extent allowed by law, the Company’s charter and by-laws, from and against any and all losses, claims, damages, liabilities, expenses (including legal fees and expenses), judgments, fines, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, in which the Executive may be involved, or threatened to be involved, as a party or otherwise by reason of the Executive’s status, which relate to or arise out of the Company, their assets, business or affairs. The Company shall advance all expenses incurred by the Executive in connection with the investigation, defense, settlement or appeal of any civil or criminal action or proceeding referenced in this Section 9, including but not necessarily limited to legal counsel, expert witnesses or other litigation-related expenses.  The Executive shall be entitled to coverage under the Company’s directors and officers liability insurance policy in effect at any time in the future to no lesser extent than any other officers or directors of the Company.  After the Executive is no longer employed by the Company, the Company shall keep in effect the provisions of this Section 9, which provision shall not be amended except as required by applicable law or except to make changes permitted by law that would enlarge the right of indemnification of the Executive.  Notwithstanding anything herein to the contrary, the provisions of this Section 9 shall survive the termination of this Agreement and the termination of the Employment Period for any reason.
 
9.2 Personal Guarantees :   The Company shall indemnify and hold harmless the Executive for any liability incurred by him/her by reason of his/her execution of any personal guarantee for the Company’s benefit (including but not limited to personal guarantees in connection with office or equipment leases, commercial loans or promissory notes)

9.3 The indemnification provision of this Section 9 shall be in addition to any other liability the Company otherwise may have to the Executive to indemnify him for his conduct in connection with his efforts on the Company’s behalf.
 
 
 
 
 
10.   Section 409A   The parties intend that any compensation, benefits and other amounts payable or provided to the Executive under this Agreement be paid or   provided in compliance with Section 409A of the Code and all regulations, guidance, and other interpretative authority issued thereunder (collectively, “Section 409A”) such that there will be no adverse tax consequences, interest, or penalties for the Executive under Section 409A as a result of the payments and benefits so paid or provided to him. The parties agree to modify this Agreement, or the timing (but not the amount) of the payment of the severance or other compensation, or both, to the extent necessary to comply with Section 409A. In addition, notwithstanding anything to the contrary contained in any other provision of this Agreement, the payments and benefits to be provided to the Executive under this Agreement shall be subject to the provisions set forth below.

(a)       
Any payment subject to Section 409A that is triggered by a termination from employment shall be triggered by a “separation from service,” as defined in the regulations issued under Section 409A.

(b)       
If the Executive is a “specified employee” within the meaning of the Section 409A at the time of the Executive’s “separation from service” within the meaning of Section 409A, then any payment otherwise required to be made to the Executive under this Agreement on account of the Executive’s separation from service, to the extent such payment (after taking in to account all exclusions applicable to such payment under Section 409A) is properly treated as deferred compensation subject to Section 409A, shall not be made until the first business day after (i) the expiration of six months from the date of the Executive’s separation from service, or (ii) if earlier, the date of the Executive’s death (the “Delayed Payment Date”). On the Delayed Payment Date, there shall be paid to the Executive or, if the Executive has died, to the Executive’s estate, in a single cash lump sum, an amount equal to aggregate amount of the payments delayed pursuant to the preceding sentence, plus interest thereon at the Delayed Payment Interest Rate (as defined below) computed from the date on which each such delayed payment otherwise would have been made to the Executive until the Delayed Payment Date. For purposes of the foregoing, the “Delayed Payment Interest Rate” shall mean the national average annual rate of interest payable on jumbo six-month bank certificates of deposit, as quoted in the business section of the most recently published Sunday edition of The New York Times preceding the date as of which Executive is treated as having incurred a separation from service for purposes of Section 409A.

(c)       
All expenses eligible for reimbursement hereunder that are taxable to the Executive shall be paid to the Executive no earlier than in the seventh month after separation from service and no later than December 31 of the calendar year following the calendar year in which such expenses were incurred. The expenses incurred by the Executive in any calendar year that are eligible for reimbursement under this Agreement shall not affect the expenses incurred by the Executive in any other calendar year that are eligible for reimbursement hereunder. The Executive’s right to receive any reimbursement hereunder shall not be subject to liquidation or exchange for any other benefit.
 
 
 
 
 
      IN WITNESS WHEREOF, Company and Executive have executed this Agreement as of the date first above written.
 
“COMPANY”
     
“Executive”
   
                 
             
  /s/ Richard D. Calder        /s/ Chris McKee     
 
By:
 
 
Richard D. Calder
President & CEO 
     
 
By:
 
Chris McKee