<PAGE>

                                                                   EXHIBIT 10.5

                              EMPLOYMENT AGREEMENT

         This agreement is made as of this 15th day of October, 1997, by and
between Microtel International, Inc., a Delaware corporation with offices at
4290 E. Brickell Street, Ontario, California, 91761-1511 (the "Employer" or the
"Company"), and Carmine T. Oliva, who resides at 80 Brandywyne Drive, Florham
Park, N.J., 07932, (the "Employee").

                                   WITNESSETH

         WHEREAS, the Employee desires to be employed by the Employer, and the
Employer desires to employ the Employee upon the terms and conditions
hereinafter set forth;

         NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises, covenants and agreements hereinafter contained the parties hereto
agree as follows:

I. EMPLOYMENT

         1.1 EMPLOYMENT. Subject to the provisions for termination as
hereinafter provided, the terms of this agreement shall begin on the date first
written above and shall terminate on October 15, 2002 (the "Employment Period").

         1.2 RENEWAL. Subject to the provisions for termination as hereinafter
provided, this agreement shall be automatically renewed for three (3) successive
two (2) year terms commencing on October 15, 2002, (the "Renewal Periods")
unless, during the following periods, either party to this Agreement shall
notify the other party in writing of its desire not to renew this Agreement;
provided, however, any action required to be taken with respect to this
Employment Agreement by the Employer shall only be taken after the Executive
Compensation and Management Development Committee of the Board of Directors of
the Employer approves such action. The required notice periods in order to
prevent an automatic renewal of this Agreement shall be as follows:

<TABLE>
<CAPTION>

Period During Which Notice Of
Non-Renewal Must Be Given                                  Renewal Period
-------------------------                                  --------------
<S>                                                     <C>
   8/15/01 to 10/15/01                                  10/15/02 to 10/15/04
   8/15/03 to 10/15/03                                  10/15/04 to 10/15/06
   8/15/05 to 10/15/05                                  10/15/06 to 10/15/08

</TABLE>

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                                     - 2 -


         1.3 DUTIES. Subject to Section 1.4, the Employee hereby promises to
perform and discharge well and favorably the duties of Chairman, President and
Chief Executive Officer and to perform services in such additional capacities as
may be directed by the Company's Board of Directors (the "Board") in accordance
herewith. As Chairman, President and Chief Executive Officer, the Employee's
duties shall consist of the usual and customary duties of his position and he
shall be subject to the direction and control of the Board. Further the Employee
shall at all times have the authority as shall reasonably be required to enable
him to discharge such duties in an efficient manner.

         1.4 REDESIGNATION. The Board may, in its discretion, elect or appoint
the Employee to offices or positions other than, or in addition to, Chairman,
President and Chief Executive Officer (hereinafter the "Redesignation") by
providing the Employee with prompt written notice of the Redesignation. If any
Redesignation and related addition to and/or reduction of Employee's duties
results in a substantial net change in the scope of the Employee's
responsibilities, the Employee may elect, in his sole discretion, not to accept
such Redesignation and to resign upon providing written notice of his
resignation to the Employer not less than thirty (30) days after the Employee
has been provided with written notice of the Redesignation. In such event, if
such Redesignation occurs during the Employment Period, the Employer shall pay
the Employee his annual salary, as provided herein, for three (3) years
following the effective date of such resignation or until October 15, 2002,
whichever is the longer period. In the event that the Redesignation shall occur
at any time after the Employment Period, and during one of the Renewal Periods,
the Employer shall pay the Employee his annual salary, as provided herein, for
three (3) years following the effective date of such resignation. All sums owing
hereunder in the event of a Redesignation and a subsequent resignation by the
Employee shall be due and payable within thirty (30) days of the effective date
of such resignation

         1.5 OTHER BUSINESS ACTIVITIES. The Employee shall devote his full time,
attention and energies to the business of the Company and shall not, so long as
he remains in the employ of the Company, be engaged in any other employment or
business of substantial nature, whether or not such business activity is pursued
for gain and profit, without the written consent of the Company. Nothing
contained herein, however, shall be construed as preventing the Employee from
(i) making passive investments of his assets in such form or manner as he
desires, providing such investments: (a) do not require the Employee to render
services in the operations or affairs of the firms, corporations or other
entities in which such investments are made, and (b) are not made in any
business directly or indirectly competing with the Employer or its subsidiaries
or affiliated corporations, if any, unless the stock of such company is listed
on a national stock exchange and the Employee owns less than three percent (3%)
of the outstanding voting securities, or (ii) becoming a member of the Board of
Directors of any other corporation that the Employee desires, provided that the
corporation upon whose Board the Employee is a member of is not, in the sole
discretion of the Employer's Board of Directors, in competition with the
business of the Employer.


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                                     - 3 -


         The Company shall provide the Employee with adequate office and support
staff to accomplish the objectives for which he is employed and in order to
perform the duties as set forth herein.

II. COMPENSATION

         2.1 ANNUAL SALARY. The Employer shall pay to the Employee in
compensation for Employee's services hereunder, a base salary at an annual rate
of $250,000, payable in equal periodic installments in accordance with the
customary payroll policy of the Employer. The Employee shall also be eligible to
receive merit or promotional increases in accordance with the Employer's annual
review, or other general review of its officer compensation.

         2.2 ABATED COMPENSATION. Commencing in July, 1996, the Employee
voluntarily agreed to abate a portion of his annual salary for the Company's
benefit, in conjunction with the Company's salary abatement program then in
effect, until such time as the Company has reported two (2) consecutive
profitable quarters during the term of the agreement or any renewals thereof. As
of the date hereof, the Employee's annual salary has been reduced to one hundred
ninety-eight thousand, eight hundred sixty-five dollars ($198,865). As of the
first day of the month following the public reporting of such consecutive
profitable fiscal quarters, the Employee's annual base salary shall be
increased, as set forth in Section 2.1 of this Agreement.

         2.3 EXPENSES. The Employer agrees to reimburse the Employee against his
receipts for all reasonable business expenses incurred by him during the
Employment Period or Renewal Periods in connection with the performances of his
services hereunder.

         2.4 BONUSES. The Employer agrees that the Employee will be entitled to
portico-pate in any bonus or similar plan approved by the Employer's Board of
Directors.

         2.5 STOCK PURCHASE WARRANTS. As a condition of his entering into this
Employment Agreement, Employee is entitled to purchase, subject to the
provisions of the warrant ("Warrant"), from Microtel International, Inc., at
$3.45 per share, two hundred fifty thousand (250,000) shares of the Company's
common stock, ("common stock"), no-par value, at any time during the period
commencing on the date of Warrant, October 15, 1997, to 5:00 PM New York City
time, October 14, 2002.

         2.6 STOCK OPTIONS AND OTHER INCENTIVE PLANS. The Employee shall
continue to be eligible to participate in any Incentive Stock Option or
Non-Qualified Stock Option Plan or other incentive plans duly approved by the
Board of Directors for implementation within the Company.

         2.7 INSURABILITY: RIGHT TO INSURE. Employee represents and warrants to
the Company that on the date hereof he is, and upon the commencement of the
Employment Period he will be, insurable at standard premium rates. Employee
agrees that the


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                                     - 4 -


Employer shall have the right during the Employment Period to insure the life
of Employee by a policy or policies of insurance (including that presently in
force) in such amount or amounts as it may deem necessary or desirable, and
Employer shall be beneficiary of any such policy and shall pay the premiums
or other costs thereof. The Employer shall have the right, from time to time,
to modify any such policy or policies of insurance or to take out new
insurance on the life of the Employee. Employee agrees, upon request, at any
time or times prior to the commencement of or during the Employment Period or
Renewals thereof, to sign and deliver any and all documents and to submit to
any physical or other reasonable examinations which may be required in
connection with any such policy or policies of insurance or modifications
thereof.

         2.8 PERSONAL GUARANTEE/CAPITAL PRESERVATION INSURANCE. The Company will
provide a life insurance policy on Employee's life, in the amount of $1 million,
payable to Employee's estate in the event of his death during the life of this
Agreement and any extensions thereof. The benefit is in return for, and will
protect the estate from financial loss arising from, any and all personal
guarantees which the Employee provided in favor of the Corporation, as required
by various corporate lenders. It will also enable such estate to exercise all
warrants and options pertaining to the Company's capital stock, thereby
preserving to his heirs the Employee's equity in the Company.

         2.9 ADDITIONAL BENEFITS. The Employee shall be entitled to the
customary and usual vacation, medical insurance, and other fringe benefits made
available to the Employer's employees generally.

III. TERMINATION

         3.1 TERMINATION DUE TO DEATH. If during the Employment Period or
Renewals thereof, Employee shall die, this Agreement shall terminate, except
that the compensation or other amounts payable hereunder, to or for the benefit
of Employee shall be paid for one (1) year following the death of the Employee
to such person or persons as Employee may designate by notice to the Employer
from time to time or, in the absence of such designation, to his legal
representatives.

         3.2 TERMINATION DUE TO DISABILITY. If during the Employment Period, or
Renewals thereof, Employee shall become physically or mentally disabled, whether
totally or partially, so that he is unable substantially to perform his services
hereunder (i) for a period of 180 consecutive days, or (ii) for shorter periods
aggregating 180 days during any period of eighteen consecutive months , the
Employer may at any time after the last day of the 180 consecutive days of
disability or the day on which the shorter periods of disability shall have
equaled an aggregate of 180 days, by 10 days written notice to Employee (but
before Employee has recovered from such disability), terminate this Agreement.
Notwithstanding such disability, the Employer shall continue to pay Employee
compensation or other amounts payable hereunder, to or for the benefit of
Employee up to and including the date two (2) years after the effective date of
such termination.


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                                     - 5 -


         3.3 TERMINATION FOR CAUSE. The Employer may at any time during the
Employment Period and any Renewals thereof, by notice, terminate this Agreement
and discharge the Employee for cause, whereupon the Employer's obligation to pay
any compensation, severance allowance, or other amounts payable hereunder to or
for the benefit of Employee shall terminate on the date of such discharge,
notwithstanding anything herein contained to the contrary. As used herein, the
term "for cause" shall be deemed to mean and include chronic alcoholism, drug
addiction; misappropriation of any money or other assets or properties of the
Employer or its subsidiaries; willful violation of specific and lawful written
directions from the Board of Directors of the Employer; failure or refusal to
perform the services required of Employee under this Agreement; willful
disclosure of trade secrets or other confidential information resulting in
substantial detriment to the Company as documented by the Employer under oath or
affirmation; conviction in a court of competent jurisdiction of any crime
involving the funds or assets of the Company including, but not limited to,
embezzlement and larceny; any civil or criminal conduct or personal misbehavior
which is detrimental to the image, reputation, welfare or security of the
Employer where such misconduct or misbehavior and judgment have been documented
by the Employer under oath or affirmation; and any other acts or omissions that
constitute grounds for cause under the laws of the States of Delaware,
California, Massachusetts or Illinois, or such other States or locations wherein
the Company may have operations.

         3.4 TERMINATION WITHOUT CAUSE. The Employer may terminate this
Agreement without cause at any time upon sixty (60) days written notice to the
Employee. In the event the Employer does terminate this Agreement without it
being "for cause", the Employee, if requested in writing by the Employer, shall
continue to render services at full compensation until the effective date of
such termination. Thereafter, during the Employment Period, Employee shall be
paid his annual salary for two and one-half (21/2) years following the effective
date of such termination, or until October 15, 2002, whichever is the longer
period. In the event such termination pursuant to this Section 3.4 occurs during
any of the Renewal Periods, the Employee shall be paid his Annual Salary through
the expiration of the particular Renewal Term to which the Company is obligated
under Section 1.2, as well as all other amounts payable hereunder. Termination
"without cause" shall include the ceasing of operations due to bankruptcy and/or
the general inability of the Employer to meet the Employer's obligations as they
become due.

         3.5 TERMINATION WITHOUT CAUSE FOLLOWING A CHANGE IN CONTROL. This
Agreement may be terminated by Employer, or successor to Employer, upon thirty
(30) days written notice to Employee upon the happening of any of the following
events:

             a. Sale by Employer of substantially all of its assets;

             b. Sale, exchange or other disposition of two-thirds or more
                of the outstanding capital stock of the Employer;


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                                     - 6 -


             c. Merger or reorganization in which shareholders of the
                Employer immediately prior to such merger or reorganization
                receive less than fifty percent (50%) of the outstanding
                voting shares of the successor corporation.

In the event that the Employee's employment is terminated without cause within
two years following a change of control, the Employer or successor to Employer
shall:

             a.  Pay to Employee, in a lump sum within thirty (30) days
                 from date of termination, or, at Employee's election, in
                 installments, the Employee's Annual Salary and all other
                 amounts payable hereunder for two and one-half (2 1/2)
                 years following the effective date of such termination or
                 until October 15, 2002, whichever is the longer period.

             b.  In the event such termination occurs during any of the
                 Renewal Periods, pay to Employee his Annual Salary to the
                 expiration of that particular Renewal Period, his Annual
                 Salary for a period of two years following the end of such
                 Renewal Period, plus all other amounts payable hereunder

             c.  Pay to Employee the average of the Annual Executive
                 Bonuses awarded to him in the three years preceding his
                 termination over the same time span and under the same
                 conditions as Annual Salary.

             d.  Pay to Employee any Executive Bonus awarded but not yet paid.

             e.  Continue Employee's coverage in all benefit programs in
                 which he was participating on the date of his termination
                 of employment until the earlier of (1) the end of the
                 Employment Period or Renewal Period, or (2) the date he
                 receives equivalent coverage and benefits under plans and
                 programs of a subsequent employer.

         3.6 CONSEQUENCES OF TERMINATION

             a. In the event of a termination of this Agreement for any
                reason and unless otherwise agreed to by the parties hereto,

                (i) all obligations incurred by the Employee on behalf of the
                    Employer, including any and all lease obligations signed by
                    the Employee related to the performance of his duties
                    hereunder, including but not limited to residence lease
                    agreements between the Employee and third parties, shall be
                    voided on or about the effective date of such termination or
                    fully assumed by the Employer or successor.


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                                     - 7 -


               (ii) all loan collateral pledged by the Employee shall be
                    returned to him as soon as practicable, and replaced by
                    collateral of similar value by the Company.

                    It is the expressed understanding of the parties hereto that
                    as soon as practicable after the effective date of the
                    Employee's termination of employment, or termination of the
                    lease relating to the occupancy of a certain domicile used
                    by the Employee and other business related persons, all
                    personal property of the Employee will be returned to the
                    principal place of residence of the Employee at the expense
                    of the Employer.

             b. In the event that the Employer fails to comply in full with the
                requirements of subparagraph (a) of this section, the Employee's
                Annual Salary shall be paid, or continue to be paid, until
                compliance is rendered in full, and such payments shall be
                addition to any severance payments and not set off against same.

IV. COVENANTS NOT TO COMPETE

         4.1 The Employee agrees that (i) during the Employment Period and any
Renewals thereof, or in the event of a termination pursuant to Section 3.3 and,
thereafter for a period of two (2) years or (ii) in the event of a termination
pursuant to Sections 3.4 or 3.5 and for the period from the effective date of
such termination until the expiration of a period of twelve months following his
resignation upon Redesignation for the Interim Period as defined in Section 1.4,
he will not act as a principal, agent, employee, employer, consultant, control
person, stockholder, director or co-partner of any person, firm, business entity
other than the Employer, or in any individual representative capacity
whatsoever, directly or indirectly, without the express consent of the Employer:

          (a) engage or participate or be employed in any business whose
products or services are competitive with those of the Employer in the world;
provided, however, that the ownership by the Employee of not more than three
percent (3%) of a corporation or similar business venture shall not be deemed to
be a violation of this covenant as long as the Employee does not become a
controlling person or actively involved in the management of such corporation or
business venture;

          (b) approach, solicit business from, or otherwise do business or deal
with any customer of the Employer in connection with any product or service
competitive with any provided by the Employer; provided, however, the Employee
may approach, solicit business from, or otherwise do business or deal with any
subsidiary or division of any customer of the Employer provided that such
customer's division or subsidiary does not provide a product or service
competitive with any provided by the Employer.


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                                     - 8 -


          (c) approach, counsel, solicit, assist to solicit or attempt to induce
any person who is then in the employ of the Employer, its affiliates or
subsidiaries to leave the employ of the Employer, or employ, or attempt to
employ on behalf of any person or entity any such person or persons who at any
time during the preceding six months was in the employ of the Employer;

          (d) aid or counsel any other person, firm, corporation or business
entity to do any of the above.

          For purposes of this Section 4.1, the term "customer" shall mean (i)
any person or entity who was a customer of the Employer at any time during the
last two months of the Employee's employment by the Employer; (ii) any
prospective customer to whom the Employer had made a presentation, or similar
offering of product(s) during the last year of the Employee's employment by the
Employer.

          The Employee acknowledges (i) that his position with the Employer
requires performance of services which are special, unique, extraordinary and
intellectual in character and places him in a position of confidence and trust
with the customers and employees of the Employer, through which, among other
things, he shall obtain knowledge of such organization's "technical information"
and "know how" and become acquainted with their customers, in which matters such
organizations have substantial proprietary interests, (ii) that the restrictive
covenants set forth above are necessary in order to protect and maintain such
proprietary interests and other legitimate business interests of the Company,
and (iii) that the Employer would not have entered into this agreement unless
such covenants were included herein.

          The Employee also acknowledges that the business of the Employer
presently extends throughout the world, that he has personally supervised or
engaged in such business on behalf of the Employer, or will do so pursuant to
the terms of this Agreement, and, accordingly, it is reasonable that the
restrictive covenants set forth above are not more limited as to geographic area
than is set forth therein. The Employee also represents to the Employer that the
enforcement of such covenants will not prevent the Employee from earning a
livelihood.

          If any of the provisions of this Section, or any part thereof, is
hereinafter construed to be invalid or unenforceable, the same shall not affect
the remainder of such provision or provisions, which shall be given full effect,
without regard to the invalid portions. If any of the provisions of this
Section, or any part thereof, is held to be unenforceable because of the
duration of such provision, the area covered thereby or the type of conduct
restricted therein, the parties agree that the court making such determination
shall have the power to modify the duration, geographic area and/or other terms
of such provision and, as so modified, said provision shall then be enforceable.
In the event that the courts of any one or more jurisdictions shall hold such
provisions wholly or partially unenforceable by reason of the scope thereof or
otherwise, it is the intention of the parties hereto that such determination not
bar or in any way affect the


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                                     - 9 -


Employer's right to the relief provided for herein in the courts of any other
jurisdictions as to breaches or threatened breaches of such provisions in
such other jurisdictions, the above provisions as they relate to each
jurisdiction being, for this purpose, severable into diverse and independent
covenants.

V. CONFIDENTIAL INFORMATION

         5.1 DISCLOSURE OF INFORMATION. The Employee recognizes and acknowledges
that the financial information, trade secrets, technical information, and
confidential or proprietary information of the Employer, including such
information as may exist from time to time, and information as to the identity
of customers or prospective customers of the Employer and other similar items,
are valuable, special and unique assets of the Employer's business, access to
and knowledge of which are essential to the performance of the duties of the
Employee hereunder. The Employee will not, during or after the term hereof, in
whole or in part, disclose such secrets or confidential, technical or
proprietary information to any person, firm, corporation, association or other
entity for any reason or purpose whatsoever, nor shall the Employee make use of
any such property or information for his own purpose or for the benefit of any
person, firm, corporation or other entity (except the Employer) under any
circumstances, during or after the term hereof, provided that after the term
hereof these restrictions shall not apply to such secrets or information which
are then in the public domain (provided that the Employee was not responsible,
directly or indirectly, for such secrets or information entering the public
domain without the consent of the Employer).

         5.2 OWNERSHIP OF INVENTIONS. All of the Employee's right, title and
interest in all developments or improvements devised or conceived by the
Employee, alone or with others, during his working hours, as well as in all
developments or improvements devised or conceived by the Employee, alone or with
others, which relate to any business in which the Employer is then engaged or
contemplating engaging in, regardless of when devised or conceived, is the
exclusive property of the Employer. The Employee shall promptly disclose all
such developments and improvements to the Employer. The Employee shall not use
or disclose any such developments or improvements, other than in furtherance of
the Employer's business, without the Employer's prior written consent

         5.3 RETURN MEMORANDA. Employee hereby agrees to deliver promptly to the
Employer on termination of his employment, or at any other time the Employer may
so request, all memoranda, notes, records, reports, manuals, drawings and other
documents (and all copies thereof) relating to the Employer's business and all
property associated therewith, which he may then possess or have under his
control.

VI. INJUNCTIVE RELIEF

         6.1 The Employee acknowledges that the remedy at law for any breach or
threatened breach of Articles IV and V hereof by the Employee will be
inadequate, and that, accordingly, the Employer shall, in addition to all other
available remedies


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                                     - 10 -


(including without limitation , seeking such damages as it can be shown it
has sustained by reason of such breach), be entitled to injunctive relief
without being required to post bond or other security, and without having to
prove the inadequacy of the available remedies at law. The Employee agrees
not to plead or defend on grounds of adequate remedy at law or any similar
defense in any action by the Employer against him, or injunctive relief, or
for specific performance of any of his obligations pursuant to Articles IV
and V hereof. Nothing herein shall be construed as prohibiting the Employer
from pursuing any other remedies for such breach or threatened breach.

VII. MISCELLANEOUS PROVISIONS

         7.1 NOTICES AND COMMUNICATIONS. All notices and communications
hereunder shall be in writing and shall be hand-delivered or sent postage
prepaid by registered or certified mail, return receipt requested, to the
address first above written or to such other address of which notice shall have
been given in the manner herein provided.

         7.2 ENTIRE AGREEMENT. All prior or contemporaneous agreements and
understandings between the parties with respect to the subject matter of this
Agreement are superseded by this Agreement, and this Agreement constitutes the
entire understanding between the parties. This Agreement may not be modified,
amended, changed or discharged except by a writing signed by both parties
hereto, and then only to the extent therein set forth.

         7.3 ASSIGNMENT. This Agreement may be assigned by the Employer and
shall be binding upon and inure to the benefit of the Employer's assigns and
successors. The services to be performed by the Employee pursuant to this
Agreement may not be assigned by the Employee.

         7.4 WAIVER. No waiver of any breach of this Agreement or of any
objection to any act or omission connected herewith shall be implied or claimed
by any party, or be deemed to constitute a consent to any continuation of such
breach, act or omission, unless in a writing signed by the party against whom
enforcement of such waiver or consent is sought, and then only to the extent
therein set forth.

         7.5 INDEMNIFICATION. The Employer will indemnify Employee, to the
maximum extent permitted by applicable law and the By-laws of the Company,
against all costs, charges and expenses incurred or sustained by him in
connection with any action, suit or other reason of his being an officer,
director or employee of the Employer or any subsidiary or affiliate thereof.

          7.6 SECTION HEADINGS. The Section headings of this Agreement are
solely for the purpose of convenience and shall neither be deemed a part of this
Agreement nor used in any interpretation thereof.


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                                     - 11 -


         7.7 GOVERNING LAW. This Agreement and the relationship of the parties
shall be governed by, and construed in accordance with, the laws of the state of
Delaware, or until such time as the Company's state of incorporation may be
changed to another state within the United States, at which point the
relationship of the parties would then be governed by, and construed in
accordance with, the laws of the new state of incorporation.


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                                     - 12 -


         IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the day and year first above written.

                                    MICROTEL INTERNATIONAL, INC.

Dated:                              By:  /s/ ROBERT B. RUNYON
        ------------------------       -----------------------------------------
                                         Robert B. Runyon, Chairman, Executive
                                         Compensation and Management Development
                                         Committee, Board of Directors


Dated:                              By:  /s/ CARMINE T. OLIVA
        ------------------------       -----------------------------------------
                                         Carmine T. Oliva, Employee