Exhibit 10.5

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is entered into as of July 27,
2016 (the “Effective Date”) between Zayo Group, LLC, a Delaware limited
liability company (the “Company”) and John F. Waters, Jr. (the “Executive”)
(each of the foregoing individually a “Party” and collectively the “Parties”).

WHEREAS, the Company wishes to employ the Executive and the Executive wishes to
be employed by the Company, in each case, on the terms and conditions set forth
herein;

NOW, THEREFORE, in consideration of the covenants, promises and representations
set forth herein, and for other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto, intending to
be legally bound, hereby agree as follows:

1. Term.  The term of the Executive’s employment hereunder shall commence on
August 15, 2016 and shall continue until terminated pursuant to Section 5 hereof
(the period between August 15, 2016 and the termination date referred to herein
as the “Term”).  During the Term, the Executive will devote substantially all of
his business time and use his best efforts to advance the business and welfare
of the Company and its subsidiaries and affiliates.  The foregoing, however,
shall not preclude the Executive from serving on civic or charitable boards or
committees or managing personal investments,  so long as any such activities do
not interfere with the performance of the Executive’s responsibilities
hereunder.  Notwithstanding the foregoing, this Agreement is not a contract or a
guarantee of employment for any specific period of time.  The Executive’s
employment with the Company is “at-will.”

2. Position.  During the Term, the Executive shall serve as Chief
Technology Officer and President of Network Solutions of the Company, and shall
report directly to the Chief Executive Officer of the Company, with direct
accountability to the Chief Operating Officer for certain functions.  During the
Term, the Executive shall also serve in such other capacities as may be
reasonably requested from time to time by the Chief Executive Officer or the
Board of Directors of the Company (the “Board”) consistent with the Executive’s
position and shall render such other services for the Company as the Board may
from time to time reasonably request and as shall be consistent with the
Executive’s position and responsibilities. 

3. Cash Compensation and Employee Benefits.  

(a) Cash Compensation.  During the Term, the Executive shall receive a base
salary at a rate of $325,000 per annum, which shall be paid in accordance with
the customary payroll practices of the Company (the “Base Salary”).  

(b) Incentive Cash Compensation.  Beginning on October 1, 2016 and thereafter
during the Term, the Executive shall be eligible to participate in the Company’s
discretionary Incentive Cash Compensation Program (the “ICC”).  The Executive’s
target annual bonus under the ICC shall be $200,000 (with a target bonus of
$50,000 per quarter), which shall be prorated to account for any partial year.
  Actual payments under, and the terms and conditions of, the ICC shall be
determined by the Board or the compensation committee thereof (the “Compensation
Committee”) in its sole discretion.  Any bonus awarded pursuant to this Section

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3(b) shall be paid pursuant to the terms of the ICC or any successor bonus
program; provided, however, that any such bonus payment will be paid no later
than March 15 of the year following the calendar year in which it was earned.

(c) Participation in Benefit Plans.  During the Term, the Executive shall be
entitled to receive all perquisites and participate in all benefit plans and
programs maintained by the Company that are available generally to its senior
leadership team;  provided, however, that the Executive’s right to participate
in such plans and programs shall not affect the Company’s right to amend or
terminate the general applicability of such perquisites, plans and
programs.  The Company may, in its sole discretion and from time to time, amend,
eliminate or establish additional benefit programs as it deems appropriate. 
Notwithstanding the Company’s paid vacation policy, the Executive is eligible to
receive 20 days of paid vacation per calendar year; provided, however, that the
Executive’s paid vacation for 2016 will be prorated to August 15, 2016.

(d) Expenses.  During the Term, the Company shall reimburse the Executive for
all reasonable travel and other business expenses incurred by him in the
performance of his duties to the Company in accordance with the Company’s
applicable expense reimbursement policies and procedures.    To the extent that
any reimbursements payable to the Executive are subject to the provisions of
Section 409A (as defined below): (i)  all such reimbursements under this
Agreement shall be made on or prior to the last day of the taxable year
following the taxable year in which such expenses were incurred by the
Executive, (ii) the amount of expenses reimbursed in one taxable year will not
affect the amount eligible for reimbursement in any subsequent taxable year, and
(iii) the right to such reimbursement under this Agreement will not be subject
to liquidation or exchange for another benefit.  For the avoidance of doubt, the
Company agrees that, in determining reasonable travel and other business
expenses for the Executive, it will apply the same customary practices it
applies in determining reasonable travel and other business expenses for the
senior leadership team.    

4. Equity Compensation Awards.   

(a) Restricted Stock Units.  During the Term, the Executive will be eligible to
participate in the Company’s equity incentive compensation plan as in effect
from time to time (the “RSU Plan”).  Beginning on January 1, 2017 and continuing
throughout the Term, the Executive shall be eligible for awards under the RSU
Plan with the aggregate annual target value of such awards equal to $3,125,000,
which will be granted pursuant to the terms of the RSU Plan as in effect from
time to time and such other terms and conditions as determined by the Board or
the Compensation Committee in its sole discretion.   Any awards to the Executive
under the RSU Plan shall be evidenced by and subject to the terms and conditions
of the Company’s standard forms of award agreement applicable generally to the
senior leadership team of the Company as in effect from time to time.    The
Executive’s RSU structure will be consistent with and no less favorable than
that provided to the Company’s senior leadership team.  Currently, the senior
leadership team participates in a mix of “Part A” and “Part B” (as such terms
are defined in the RSU Plan), and the specific structures of each are approved
by the Compensation Committee and are modified from time to time. The
Executive’s input will be sought when making recommendations on the mix between
Part A and Part B;  provided that no more than 50% of any such grant would
consist of Part B.    

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(b) Sign-on Restricted Stock Units.  In addition to the Executive’s
participation in the RSU Plan as described in Section 4(a), the Executive shall
be eligible to receive a special one-time grant of restricted stock units (the
“Sign-on RSUs”) on the first date of the Executive’s employment hereunder with
an aggregate value on the grant date thereof equal to $3,500,000.  Unless the
Executive’s employment is terminated by the Company with Cause (defined below),
or due to the Executive’s resignation for any reason prior to an applicable
vesting date, the Sign-on RSUs shall vest according to the following schedule:
shares having an aggregate value of $700,000 (i.e., twenty-percent (20%) of the
aggregate Sign-on RSUs) shall vest on each of December 31, 2016, March 31, 2017,
June 30, 2017, September 30, 2017, and December 31, 2017,  calculated on each
such vesting date based upon the average closing price of the Company’s common
stock over the last ten trading days prior to such date.    For the avoidance of
doubt, if the Company terminates the Executive’s employment without Cause at any
time on or before December 31, 2017, the Sign-on RSUs shall, to the extent not
already vested, continue to vest according to the schedule described
above.  Moreover, the Sign-on RSUs shall vest in full on the date that is sixty
(60) days following a Change of Control (defined below) of the Company provided
that the Executive is employed by the Company at the time of such Change of
Control.  At the Company’s sole discretion, the Sign-on RSUs may be settled in
cash or shares of the Company’s common stock.  The Sign-on RSUs shall be
evidenced the Company’s standard form of restricted stock unit award agreement
with such modifications as necessary to conform to the terms and conditions of
this Section 4(b).

(c) Definitions.  For purposes of the Sign-on RSUs and Section 5 below, the
following definitions shall govern:

(i) “Cause”  means the Executive’s (i) dishonesty of a material nature with
respect to the Company (including, but not limited to, theft or embezzlement of
the Company’s or any of its subsidiaries’ funds or assets); (ii) conviction of,
or guilty plea or no contest plea, to a felony charge or any misdemeanor
involving moral turpitude, or the entry of a consent decree with any
governmental body; (iii) noncompliance in any material respect with any laws or
regulations, foreign or domestic, affecting the operation of the Company’s or
any of its subsidiaries’ business, if such noncompliance is (a) likely to have a
material adverse effect on the Company or any of its subsidiaries and (b) the
Executive had knowledge of such noncompliance, which noncompliance, if
reasonably susceptible to cure, is not cured within ten (10) days of written
notice thereof from the Board (or, if such noncompliance cannot feasibly be
cured within said 10 day period and the Executive has not cured such
noncompliance within a reasonable amount of time after using best efforts); (iv)
violation of any express direction or any rule, regulation or policy established
by the Board that is consistent with the terms of this Agreement, which
violation, if reasonably susceptible to cure, is not cured within ten (10) days
of written notice thereof from the Board (or, if such violation cannot feasibly
be cured within said 10 day period and the Executive has not cured such
violation within a reasonable amount of time after using best efforts), and if
such violation is likely to have a material adverse effect on the Company or any
of its subsidiaries; (v) material breach of this Agreement, which breach, if
reasonably susceptible to cure, is not cured within ten (10) days of written
notice thereof from the Board (or, if such material breach cannot feasibly be
cured within said 10 day period and the Executive has not cured such material
breach within a reasonable amount of time after using best efforts) or material
breach of the Executive’s fiduciary duties to the Company or any of its

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subsidiaries; or (vi) gross incompetence, gross neglect, or gross misconduct in
the performance of the Executive’s duties.    

(d) “Change of Control” shall mean the occurrence of any of the following:

(i) the consummation of any merger or consolidation of the Company, if following
such merger or consolidation the holders of the Company’s outstanding voting
securities immediately prior to such merger or consolidation do not own a
majority of the outstanding voting securities of the surviving corporation in
approximately the same proportion as before such merger or consolidation;

(ii) individuals who constitute the Board at the beginning of any 24-month
period (“Incumbent Directors”) ceasing for any reason during such 24-month
period to constitute at least a majority of the Board, provided that any person
becoming a director during any such 24-month period whose election or nomination
for election was approved by a vote of at least two-thirds of the Incumbent
Directors then on the Board (either by a specific vote or by approval of the
proxy statement for the Company in which such person is named as a nominee for
director, without objection to such nomination) shall be an Incumbent Director;
provided, however, that no individual initially elected or nominated as a
director of the Company as a result of an actual or threatened election contest
with respect to directors or as a result of any other actual or threatened
solicitation of proxies by or on behalf of any person other than the Board shall
be an Incumbent Director;

(iii) the consummation of any sale, lease, exchange or other transfer in one
transaction or a series of related transactions of all or substantially all of
the Company’s assets, other than a transfer of the Company’s assets to a
majority-owned subsidiary of the Company or any other entity the majority of
whose voting power is held by the shareholders of the Company in approximately
the same proportion as before such transaction;

(iv) the liquidation or dissolution of the Company; or

(v) the acquisition by a person, within the meaning of Section 3(a)(9) or
Section 13(d)(3) (as in effect on the date of adoption of the Plan) of the
Securities Exchange Act of 1934, as amended, or any successor thereto, of a
majority or more of the Company’s outstanding voting securities (whether
directly or indirectly, beneficially or of record).

(e)While the Executive agrees that any grants made under the RSU Plan shall be
evidenced by and subject to the terms and conditions of the Company’s standard
forms of award agreement, which terms and conditions shall be consistent with
and no less favorable than those granted to the senior leadership team of the
Company as in effect from time to time, such standard forms of award agreement
shall contain an explicit statement that the Executive is not waiving any
demands or claims arising out of, relating to or in connection with this
Agreement or any amendments thereto in any and all waiver of claims sections or
such similar sections.

5. Termination of Employment.  Subject to the further provisions of this Section
5, the Term and the Executive’s employment hereunder may be terminated by either
Party at any time and for any or no reason; provided, however, that the Company
and the Executive will be required to give written notice of any termination of
the Executive’s employment as set forth in

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this Section 5.  Following the Executive’s termination of employment by the
Company for any reason, except as set forth in this Section 5, the Executive
shall have no further rights to any compensation or any other benefits under
this Agreement.

(a) Notice of Termination.  Any termination or resignation of the Executive’s
employment by the Company or by the Executive, as applicable, under this Section
5 (other than termination of employment as a result of the Executive’s death)
shall be communicated by a written notice (a “Notice of Termination”) to the
other Party hereto (i) with respect to a termination by the Company, indicating
whether the termination is for or without Cause, (ii) indicating the specific
termination provision in this Agreement relied upon, (iii) with respect to a
termination by the Company for Cause, setting forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated, and (iv) specifying a
date of termination, subject to any applicable cure period (the “Date of
Termination”), which, if submitted by the Executive, shall be thirty (30) days
following the date of such notice (or such other date as mutually agreed by the
Company and the Executive). 

(b) Accrued Rights.  Upon a termination of the Executive’s employment for any
reason, the Executive (or the Executive’s estate) shall be entitled to receive
the sum of the Executive’s Base Salary through the Date of Termination not
theretofore paid; any expenses owed to the Executive under Section 3; and any
amount arising from the Executive’s participation in, or benefits under, any
employee benefit plans, programs or arrangements (including without limitation,
any disability or life insurance benefit plans, programs or arrangements), which
amounts shall be payable in accordance with the terms and conditions of such
employee benefit plans, programs or arrangements (collectively, the “Accrued
Rights”).

(c) Termination by the Company without Cause on or Prior to December 31,
2017.  If the Executive’s employment shall be terminated by the Company without
Cause (and not by reason of the Executive’s resignation or disability) on or
prior to December 31, 2017,  then, in addition to the Accrued Rights and the
continued vesting of the Sign-on RSUs set forth in Section 4(b),  the Executive
shall be eligible to receive a one-time lump sum cash payment from the Company
equal to either (i) $600,000, if the Date of Termination is prior to March 31,
2017, or (ii) $300,000, if the Date of Termination is on or after March 31,
2017, and on or prior to December 31, 2017 (the “Severance Payment”).  The
Severance Payment shall be paid on the 60th day following the Date of
Termination.  The Severance Payment is subject to the Executive’s execution and
non-revocation of a separation agreement and general release of claims in a form
provided by the Company at the time of such termination. 

(d) Return of Property.  Upon cessation of the Executive’s employment with the
Company for any reason, whether voluntary or involuntary, the Executive shall
immediately deliver to the Company (i) all physical, computerized, electronic or
other types of records, documents, proposals, notes, lists, files and any and
all other materials, including computerized and electronic information, that
refers, relates or otherwise pertains to the Company or any subsidiary of the
Company (or business dealings thereof) that are in the Executive’s possession,
subject to the Executive’s control or held by the Executive for others; and
(ii) all property or equipment that the Executive has been issued by the Company
or any subsidiary of the Company during the course of his employment or property
or equipment thereof that the Executive

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otherwise possesses, including any computers, cellular phones, pagers and other
devices.  The Executive acknowledges that he is not authorized to retain any
physical, computerized, electronic or other types of copies of any such
physical, computerized, electronic or other types of records, documents,
proposals, notes, lists, files or materials, and is not authorized to retain any
other property or equipment of the Company or any subsidiary of the
Company.  The Executive further agrees that the Executive will immediately
forward to the Company (and thereafter destroy any electronic copies thereof)
any business information relating to the Company or any subsidiary of the
Company that has been or is inadvertently directed to the Executive following
the Executive’s last day of the Executive’s employment.  The provisions of this
Section 5(d) are in addition to any other written obligations on the subjects
covered herein that the Executive may have with the Company and its
subsidiaries, and are not meant to and do not excuse such obligations.  Upon the
termination of his employment with the Company and its subsidiaries, the
Executive shall, upon the Company’s request, promptly execute and deliver to the
Company a certificate (in form and substance satisfactory to the Company) to the
effect that the Executive has complied with the provisions of this Section
5(d). 

(e) Resignation of Offices.  Promptly following any termination of the
Executive’s employment with the Company (other than by reason of the Executive’s
death), the Executive shall promptly deliver to the Company Executive’s written
resignation from all positions that the Executive may then hold as an employee
or officer of the Company or any subsidiary of the Company. 

6. Miscellaneous Onboarding Items.  The Executive’s employment hereunder is
contingent upon the following:    

(a) The Executive’s ability to document that he is lawfully authorized to work
in the United States by producing the appropriate documents.

(b) The Executive’s agreement to and signature acknowledging the Company’s
Employee Confidentiality and Intellectual Property Agreement, the Employee
Handbook, and People Operations Policies.

(c) The Executive’s completion of a background check acceptable to the Company.

7. Executive Representations.  The Executive hereby represents and warrants as
follows: (a) the Executive is not subject to any agreement with any current or
former employer or otherwise that will prohibit him from performing all aspects
of his employment hereunder; (b) the Executive has not taken any information
that is marked or the Executive has reason to believe is confidential,
proprietary, and/or trade secrets from any prior employment; and (c) the
Executive will not use or disclose any confidential, proprietary, or trade
secrets information that the Executive might have knowledge of from any prior
employment.

8. Severability.  If any portion or provision of this Agreement shall to any
extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion

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and provision of this Agreement shall be valid and enforceable to the fullest
extent permitted by law.

9. Mutual Drafting.  Each Party has had the opportunity to be represented by
counsel of its choice in negotiating this Agreement.  This Agreement shall
therefore be deemed to have been negotiated and prepared at the joint request,
direction and construction of the Parties, at arm’s length, with the advice and
participation of counsel, and shall be interpreted in accordance with its terms
without favor to either Party, and no presumption or burden of proof shall arise
favoring or disfavoring either Party by virtue of the authorship of any of the
provisions of this Agreement.

10. Section 409A of the Internal Revenue Code.  Notwithstanding anything
contained in this Agreement to the contrary, to the maximum extent permitted by
applicable law, amounts payable to the Executive pursuant to Section 4 are
intended to be made in reliance upon Treas. Reg. § 1.409A-1(b)(4) (short-term
deferral).  No amounts payable under this Agreement upon the Executive’s
termination of employment shall be payable unless the Executive’s termination of
employment constitutes a “separation from service” within the meaning of Treas.
Reg. § 1.409A-1(h).  The Company and the Executive intend that their exercise of
authority or discretion under this Agreement shall comply with Section 409A of
the Internal Revenue Code of 1986, as amended (“Section 409A”).  If any
provision of this Agreement does not satisfy the requirements of Section 409A,
such provision shall nevertheless be applied in a manner consistent with those
requirements. If any provision of this Agreement would subject the Executive to
additional tax or interest under Section 409A, the Company shall reform the
provision.  However, the Company shall maintain to the maximum extent
practicable the original intent of the applicable provision without subjecting
the Executive to additional tax or interest, and the Company shall not be
required to incur any additional compensation expense as a result of the
reformed provision. In no event whatsoever shall the Company be liable for any
tax, interest or penalties that may be imposed on the Executive under Section
409A. Notwithstanding the foregoing, no particular tax result for the Executive
with respect to any income recognized by the Executive in connection with this
Agreement is guaranteed. Neither the Company nor any of its affiliates shall
have any obligation to indemnify or otherwise hold the Executive harmless from
any or all such taxes, interest, or penalties, or liability for any damages
related thereto. The Executive acknowledges that he has been advised to obtain
independent legal, tax or other counsel in connection with Section 409A. Each
payment under this Agreement is intended to be a “separate payment” and not a
series of payments for purposes of Section 409A.  Any payments or reimbursements
of any expenses provided for under this Agreement shall be made in accordance
with Treas. Reg. § 1.409A-3(i)(1)(iv).  All references in this Agreement to
Section 409A include rules, regulations, and guidance of general application
issued by the Department of the Treasury under Section 409A. 

11. Section 280G of the Internal Revenue Code.  In the event that the Company
enters into an arrangement or agreement with any Company employee intended to
compensate such employee for the excise tax imposed on such employee under
Section 4999 of the Internal Revenue Code of 1986, as amended (or any successor
provision thereto) or any interest or penalties with respect to such excise tax
in connection with payments or benefits constituting parachute payments within
the meaning of Section 280G of the Code, the Company will make the same
arrangement or agreement available to the Executive.   

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12. Governing Law and Jurisdiction.  This Agreement shall be construed and
enforced under and be governed in all respects by the laws of the State of
Delaware, without regard to the conflict of laws principles thereof.  The
Company and the Executive hereby consent and submit to the exclusive personal
jurisdiction of the court in and of the State of Delaware and to the courts to
which the decisions of appeal of such courts may be taken and consents that
service of process with respect to all courts in and of the State of Delaware
may be made by registered mail to the Executive’s address on file with the
Company.

13. Assignment.  Neither the Company nor the Executive may make any assignment
of this Agreement or any interest herein, by operation of law or otherwise,
without the prior written consent of the other; provided, however, that the
Company may assign its rights and obligations under this Agreement without the
consent of the Executive to any affiliate or in the event that the Company shall
after the Effective Date effect a reorganization, consolidate with or merge
into, any entity or transfer all or substantially all of its properties or
assets to any entity.  This Agreement shall inure to the benefit of and be
binding upon the Company and the Executive, their respective successors,
executors, administrators, heirs and permitted assigns.

14. Waiver.  No waiver of any provision hereof shall be effective unless made in
writing and signed by the waiving Party.  The failure of either Party to require
the performance of any term or obligation of this Agreement, or the waiver by
either Party of any breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.

15. Notices.  Any and all notices, requests, demands and other communications
provided for by this Agreement shall be in writing and shall be effective when
delivered in person, consigned to a reputable national courier service or
deposited in the United States mail, postage prepaid, registered or certified,
and addressed to the Executive at his last known address on the books of the
Company or, in the case of the Company, at its principal place of business,
attention of the Legal Department or to such other address as any Party may
specify by notice to the other.

16. Entire Agreement.  This Agreement constitutes the entire agreement among the
Parties hereto pertaining to the subject matter hereof and supersedes all prior
and contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written, of the Parties with respect to such subject matter.

17. Amendment.  This Agreement may be amended or modified only by a written
instrument signed by the Executive and by an expressly authorized representative
of the Company.

18. Headings.  The headings and captions in this Agreement are for convenience
only, and in no way define or describe the scope or content of any provision of
this Agreement.

19. Counterparts.  This Agreement may be executed in two or more counterparts,
each of which shall be an original and all of which together shall constitute
one and the same instrument.

[Remainder of page is intentionally blank.]

 

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IN WITNESS WHEREOF, the Parties hereto, intending to be legally bound hereby,
have hereunto set their hands under seal, effective as of the Effective Date.

Executive

 

/s/ John F. Waters, Jr._____________
John F. Waters, Jr.

 

Zayo Group, LLC

 

By: /s/ Dan Caruso________________
     Name:  Dan Caruso
     Title:  CEO

 

SIGNATURE PAGE TO EMPLOYMENT AGREEMENT

 

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