AMENDMENT TO EMPLOYMENT AGREEMENT
This AMENDMENT TO EMPLOYMENT AGREEMENT (the "Amendment") is made this 5th
day of June 1997 by and between Melvyn H. Reznick, an individual (the
"Employee") and Incomnet, Inc., a California corporation (the "Company") with
respect to the following facts:
R E C I T A L S
A. The Company and the Employee entered into an Employment Agreement,
dated November 27, 1995, as amended on February 5, 1996 and on
September 3, 1996 (collectively, the "Agreement").
B. Pursuant to the Employment Agreement, Mr. Reznick is serving the
Company as its President.
C. Since November 27, 1995, Mr. Reznick has been performing exemplary
work and extraordinary duties for the Company. The Company strongly
believes that the retention of Mr. Reznick for an extended term is
critically important to the long term stability of the Company and its
subsidiaries.
D. On January 21, 1997 and on June 5, 1997, the Company's Board of
Directors adopted resolutions authorizing this Amendment to the
Employment Agreement for Mr. Reznick.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, THE PARTIES HERETO AGREE AS FOLLOWS:
1. ANNUAL SALARY. The following statement is hereby added to Section 6.1
of the Agreement: "In consideration for the exemplary work performed by the
Employee for the Company and his importance to the financing and operation of
Rapid Cast, Inc., an important subsidiary of the Company, and his extraordinary
accomplishment in solidifying the relationship of the Company with its
wholly-owned subsidiary, National Telephone Communications, Inc., the Employee
and the Company hereby agree that effective December 1, 1996, Mr. Reznick's
annual salary shall be $250,000, payable in semi-monthly installments of
$10,416.66."
2. TERM OF AGREEMENT. Section 5 of the Agreement is hereby amended and
restated to be as follows: "The term of this Agreement commences on November 27,
1995 and will continue until the earlier of (i) six months after the date that
100% of the Company's holdings of NTC stock are sold, conveyed, spun-off, or
otherwise distributed, but no sooner than December 31, 1999 ("Early Termination
Date", which means six months after said sale, conveyance, spin-off or
distribution, but no sooner than December 31, 1999) provided, that in the
event of a termination of this Agreement, as amended, pursuant to Section 2(i)
herein, then (a) the Company shall pay to the Employee a lump sum
payment equal to the sum of the annual compensation and accrued but
unpaid bonus (if any, with respect to bonus) which would be payable to the
Employee for one year after the Early Termination Date pursuant to Sections 6.1
and 6.2 herein, respectively, but not beyond
June 30, 2002, (b) Employee shall be entitled to all of the benefits under
Sections 7 and 10 of this Agreement, as amended, for one additional year after
the Early Termination Date, but not beyond June 30, 2002, and (c) Employee shall
be entitled to exercise all vested stock options which he owns for the entire
remaining exercise period of the stock options as set forth in Section 8 of the
Company's 1996 Stock Option Plan, no such stock options shall terminate prior to
said expiration dates, and no "severance" shall be deemed to have occurred under
the Company's 1996 Stock Option Plan or under existing Stock Option Agreements
covering said stock options, or (ii) June 30, 2002, unless properly terminated
sooner as provided in Section 14 of the Agreement, as amended by this Amendment.
3. IMPROPER TERMINATION. Section 15 of the Agreement is hereby amended
and restated to be as follows: "If this Agreement, as amended, is terminated by
Employee for any reason pursuant to Section 14.2 of this Agreement or by the
Company in any manner except specifically in accordance with Section 14.1 or
14.3 of this Agreement, then (i) the Company shall immediately pay to the
Employee a lump sum payment equal to the sum of (a) the Employee's entire annual
compensation and accrued but unpaid bonus (if any, with respect to bonus)
payable through June 30, 2002 pursuant to Sections 6.1 and 6.2 herein,
respectively, and (b) the annual compensation and accrued but unpaid bonus (if
any, with respect to bonus) which would be payable to the Employee for three
additional years pursuant to Sections 6.1 and 6.2 herein, respectively, (ii)
Employee shall be entitled to all of the benefits under Sections 7 and 10 of
this Agreement, as amended, through June 30, 2005, and (iii) Employee shall be
entitled to exercise all vested stock options which he owns for the entire
remaining exercise period of the stock options as set forth in Section 8 of the
Company's 1996 Stock Option Plan, no such stock options shall terminate prior to
said expiration dates, and no "severance" shall be deemed to have occurred under
the Company's 1996 Stock Option Plan or under existing Stock Option Agreements
covering said stock options. It is specifically agreed that in such event
Employee shall have no duty to mitigate his damages by seeking comparable,
inferior or different employment."
4. TERMINATION BY EMPLOYEE OR THE COMPANY. Section 14.2 of the Agreement
is hereby amended and restated as follows: "Employee may at his option and in
his sole discretion terminate this Agreement, as amended, for (i) the material
breach by the Company of the terms of this Agreement, or (ii) any material
change by the Company in the working environment or conditions of the Employee,
or any material change in the duties or authority of the Employee under this
Agreement, as amended. Section 14.3 of the Agreement is hereby amended and
restated as follows: "The Company may at its option terminate this Agreement,
as amended, in the event that the Employee commits gross negligence in the
performance of his duties under this Agreement, as amended, or breaches his
fiduciary duty to the Company, to the Board of Directors or to the Company's
shareholders; provided, however, that the Company shall give the Employee
written notice of specific instances for the basis of any termination of this
Agreement by the Company pursuant to Section 14.3 of this Agreement, as amended.
Employee shall have a period of 30 days after said notice in which to cease the
alleged violations before the Company may terminate this Agreement. If Employee
ceases to commit the alleged violations within said 30 day period, the Company
may not terminate this Agreement pursuant to this Section. If Employee
continues to commit the alleged violations after said 30 day period, the Company
may terminate this Agreement immediately upon written notification to Employee."
5. ORIGINAL EMPLOYMENT AGREEMENT IN FULL FORCE AND EFFECT. The original
Employment Agreement, as amended, shall remain in full force and effect and
unmodified except as specifically amended by this Amendment. In the event of
any contradiction between the terms of the original Employment Agreement, as
amended, and this Amendment, the terms of this Amendment will govern.
IN WITNESS WHEREOF, this Amendment is executed as of the date first above
written.
COMPANY: INCOMNET, INC.
BY:
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ALBERT MILSTEIN, DIRECTOR
BY:
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NANCY ZIVITZ, DIRECTOR
BY:
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HOWARD SILVERMAN, DIRECTOR
EMPLOYEE:
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MELVYN H. REZNICK