Exhibit 10.1 Amendment to Employment Agreement Between Incomnet, Inc.
and Melvyn H. Reznick, dated June 5, 1997
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
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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
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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.,
a California corporation
By:
/s/ Nancy Zivitz
Nancy Zivitz, Director
/s/ Albert Milstein
Albert Milstein, Director
/s/ Howard Silverman
Howard Silverman
EMPLOYEE:
/s/ Melvyn H. Reznick
Melvyn H. Reznick
21031 Ventura Boulevard, Suite 1100
Woodland Hills, California 91364
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