**Exhibit 10.61****EMPLOYMENT AGREEMENT****EFFECTIVE AS OF JANUARY 1, 2006****BETWEEN****VODAVI TECHNOLOGY, INC.****AND****GREGORY K. ROEPER**
 

 
TABLE OF CONTENTS       1. Employment  1 2. Full Time Occupation  1 3. Compensation and other Benefits  1   (a) Salary  1   (b) Bonus  1   (c) Reimbursement  1   (d) Fringe Benefits  1 4. Term of Employment  2   (a) Employment Term  2   (b) Termination Under Certain Circumstances  2   (c) Result of Termination  3   (d) Result of Change of Control  3 5. Competition and Confidential Information  4   (a) Interests to be Protected  4   (b) Non-Competition  4   (c) Non-Solicitation of Employees  5   (d) Confidential Information  5   (e) Return of Books and Papers  5   (f) Disclosure of Information  5   (g) Assignment  6   (h) Equitable Relief  6   (i) Restrictions Separable  6   (j) Survival  6 6. Miscellaneous  6   (a) Notices  6   (b) Indulgences; Waivers  7   (c) Controlling Law  7   (d) Binding Nature of Agreement; Successors and Assigns  7   (e) Execution in Counterparts  8   (f) Provisions Separable  8   (g) Entire Agreement  8   (h) Paragraph Headings  8   (i) Number of Days  8 
 

 
**EMPLOYMENT AGREEMENT**     THIS EMPLOYMENT AGREEMENT (“Agreement”) is made as of January 31, 2006, to be effective as ofJanuary 1, 2006 (the “Effective Date”) by and between VODAVI TECHNOLOGY, INC., a Delawarecorporation (“Employer”) and GREGORY K. ROEPER (“Employee”).**RECITALS**     Employer desires to employ Employee and Employee desires to accept such employment, all on theterms and conditions hereinafter set forth.**AGREEMENT**     **NOW, THEREFORE**, in consideration of the premises and of the mutual covenants set forth in thisAgreement, the parties hereto agree as follows:     1. **Employment**. Employer hereby employs Employee, and Employee hereby accepts such employment,as President and Chief Executive Officer of Employer and in such other executive capacities and forsuch other executive duties and services as shall from time to time be mutually agreed upon byEmployer and Employee.     2. **Full Time Occupation**. Employee shall devote Employee’s entire business time, attention,and efforts to the performance of Employee’s duties under this Agreement, and shall serve Employerfaithfully and diligently and shall not engage in any other employment while employed by Employer.     3. **Compensation and other Benefits.**          (a) **Salary**. Employer shall pay to Employee, as compensation for the services rendered byEmployee during Employee’s employment under this Agreement, a base salary at a rate of (1) $220,000per annum (the “Base Salary”). Employer shall pay the Base Salary in accordance with Employer’sestablished payroll procedures.          (b) **Bonus**. In addition to the Base Salary, Employee shall be eligible to receive annual bonuscompensation (the “Bonus”) in an amount to be set by the Compensation Committee of Employer’s Boardof Directors, at the committee’s sole and exclusive discretion.          (c) **Reimbursement**. Employer shall reimburse Employee for all travel and entertainmentexpenses and other ordinary and necessary business expenses incurred by Employee inconnection with the business of Employer and Employee’s duties under this Agreement. The term“business expenses” shall not include any item not at least partially deductible by Employer forfederal income tax purposes. Reimbursements shall be made by Employer in accordance withEmployer’s normal expense policies and procedures.          (d) **Fringe Benefits**. Employee shall be entitled to participate in any group insurance,pension, retirement, vacation, expense reimbursement, and other plans, programs, and benefitsapproved by the Board of Directors and made available from time to time
 

 
to executive employees ofEmployer generally during the term of Employee’s employment hereunder. The foregoing shall notobligate Employer to adopt or maintain any particular plan, program, or benefit.     4. **Term of Employment.**          (a) **Employment Term**. The term of Employee’s employment hereunder shall commence on theEffective Date and shall continue until December 31, 2006. The term of Employee’s employmenthereunder shall automatically renew for successive one-year terms, unless and until terminated byeither party giving written notice to the other not less than 30 days prior to the end of thethen-current term or as otherwise set forth in Section 4(b).          (b) **Termination Under Certain Circumstances**. Notwithstanding anything to the contrary hereincontained:               (i) **Death**. Employee’s employment and this Agreement shall be automatically terminated,without notice, effective upon the date of Employee’s death.               (ii) **Disability**. If Employee shall fail to perform any of Employee’s essential job dutiesunder this Agreement as the result of illness or other incapacity, with or without reasonableaccommodation, for a period of more than 12 consecutive weeks, or for more than 12 weeks within any12-month period, as determined by Employer for purposes of compliance with the Family and MedicalLeave Act, Employer may, at its option, and upon notice to Employee, terminate Employee’semployment and this Agreement effective on the date of that notice.               (iii) **Unilateral Decision of Employer**. Employer may, at its option, upon notice to Employee,terminate Employee’s employment and this Agreement effective on the date of that notice. Areduction in Employee’s responsibilities, as such responsibilities are described in Section1 of this Agreement, by Employer shall constitute a termination under this Section4(b)(iii). Employer’s failure torenew this Agreement upon expiration of the term shall constitute a termination under thisSection 4(b)(iii).               (iv) **Unilateral Decision by Employee**. Employee may, at his option and upon notice toEmployer, terminate Employee’s employment and this Agreement effective on the date of that notice.               (v) **Termination“For Cause”**. Employer may terminate Employee’s employment and this Agreement,and the rights and obligations of the parties hereunder at any time, effective upon written noticeto Employee, if the termination of Employee’s employment is “for cause.” For purposes of thisSection 4(b)(v), “for cause” shall mean discharge resulting from a determination byEmployer that Employee: (A) has been convicted of a felony involving dishonesty, fraud, theft, orembezzlement; (B) has performed an act or failed to act, which if he were prosecuted and convicted,would constitute a crime or offense involving money or property of Employer, or which wouldconstitute a felony in any jurisdiction involved; (C) has violated Employer’s policies prohibitingsexual harassment or discrimination or harassment or discrimination of any other protected basisunder federal, state, or local law; or (D) has willfully and persistently breached or violated anyof the provisions of
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this Agreement, and such breach or violation shall have continued for a periodof 10 days after Employer shall have given Employee written notice specifying the nature thereof inreasonable detail.               (vi) **Change of Control**. In the event of a Change of Control (as defined below), Employer orEmployee may, at their respective option, upon notice to the other, terminate Employee’s employmentby providing the other party with 30 days’ written notice after the effective date of the Change ofControl. For the purposes of this Agreement, the term “Change of Control” shall mean:                    (1) The approval by a majority of Employer’s Board of Directors of (A) any merger orconsolidation in which Employer is not the surviving entity; (B) any reverse merger in which theCompany is the surviving entity; or (C) any transaction involving the sale of all or substantiallyall of Employer’s assets to any person other than a wholly or majority owned direct or indirectsubsidiary of Employer; or                    (2) Individuals who, as of the Effective Date, constitute the Board of Directors of theCompany (the “Incumbent Board”) cease for any reason to constitute at least a majority of theBoard, provided that any person becoming a director subsequent to the Effective Date whoseelection, or nomination for election by the Company’s stockholders, was approved by a vote of atleast a majority of the directors then comprising the Incumbent Board (other than an election ornomination of an individual whose initial assumption of office is in connection with an actual orthreatened election contest relating to the election of the directors of the Company) shall be, forpurposes of this Agreement, considered as though such person were a member of the Incumbent Board.          (c) **Result of Termination**. In the event of the termination of Employee’s employment pursuantto Sections 4(b)(i), (iv), or (v) above, Employee shall receive no furthercompensation under this Agreement and all of Employee’s unvested options shall be cancelled. Inthe event of the termination of Employee’s employment pursuant to Section 4(b)(ii) or(iii) above,               (i) Employee shall receive his Base Salary plus benefits for a one-year period following thedate of termination of Employee’s employment pursuant to this Agreement. Such Base Salary paymentswill be payable in one lump-sum amount within 10 days of the event of termination. Should Employeebecome eligible for benefits in connection with a new employer during the one-year period,Employers obligation for benefits shall cease;               (ii) Employee’s vested options as of the date of termination shall remain outstanding throughthe 120-day period following the then-current term of this Agreement. All of Employee’s unvestedoptions as of the date of termination shall be cancelled; and               (iii) Employer shall forgive any balance owed by Employee pursuant to Employer’s funding ofEmployee’s Group Life Insurance policy.          (d) **Result of Change of Control**. As incentive for Employee to actively pursue the bestinterests of Employer’s stockholders, in the event of a Change of Control
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(as that term is definedin Section 4(b)(vi) of this Agreement), then (i) Employee shall earn the Change in ControlBonus the , which shall be paid in one lump sum payment within ten business days from the effectivedate of the Change of Control in the event of a Change of Control; and (ii) any options held byEmployee that remain unvested as of the effective date of the Change of Control shall become fullyvested and exercisable as of such effective date. For purposes of this Agreement, the “Change inControl Bonus” shall be based on the value of the transaction resulting in the Change of Controland, at a minimum, shall be equal to $150,000 plus 1.5% of the transaction value in excess of$26,000,000.In addition, in the event of the termination of Employee’s employment pursuant to Section4(b)(vi) above Employee shall continue to receive his Base Salary and benefits for a one-yearperiod following the date of termination of Employee’s employment pursuant to this Agreement. SuchBase Salary payments will be payable in one lump-sum amount within 10 days of the event oftermination. Should Employee become eligible for benefits in connection with a new employer duringthe one-year period, Employers obligation for benefits shall cease.Finally, Employer shall forgive any balance owed by Employee pursuant to Employer’s funding ofEmployee’s Group Life Insurance policy.     5. **Competition and Confidential Information.**          (a) **Interests to be Protected**. For purposes of this Section 5, the term “Employer” shall include VodaviTechnology, Inc. and any entity that is a direct or indirect subsidiary of Vodavi Technology, Inc.during the term of this Agreement. The parties acknowledge that Employee will perform essentialservices for Employer during the term of Employee’s employment with Employer. Employee will beexposed to, have access to, and be required to work with a considerable amount of ConfidentialInformation (as defined below). The parties also expressly recognize and acknowledge that thepersonnel of Employer have been trained by and are valuable to Employer and that Employer willincur substantial expense in recruiting and training personnel if it must hire new personnel orretrain existing personnel to fill vacancies. The parties also expressly recognize that it couldseriously impair the goodwill and diminish the value of Employer’s business should Employee competewith Employer in any manner whatsoever. The parties acknowledge that this covenant has an extendedduration; however, they agree that this covenant is reasonable, and it is necessary for theprotection of Employer, its stockholders, and employees. For these and other reasons, and the factthat there are many other employment opportunities available to Employee if his employment withEmployer is terminated, the parties are in full and complete agreement that the followingrestrictive covenants are fair and reasonable and are entered into freely, voluntarily, andknowingly. Furthermore, each party was given the opportunity to consult with independent legalcounsel before entering into this Agreement.          (b) **Non-Competition**. During the term of Employee’s employment with Employer and for theperiod ending 12 months after the termination of Employee’s employment with Employer, regardless ofthe reason therefore, Employee shall not (whether directly or indirectly, as owner, principal,agent, stockholder, director, officer, manager, employee, partner, participant, or in any othercapacity) engage in or become financially interested in any competitive business conducted withinthe Restricted Territory (as defined
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below). As used herein, the term “competitive business” shallmean any business that designs, develops, markets, or supports commercial telephone systems,commercial grade telephones, voice processing systems (including, but not limited to, automatedattendant, voice mail, or fax mail), computer-telephony integration products, and related computersoftware products; and the term “Restricted Territory” shall mean any area in which Employerconducts its business during Employee’s employment hereunder.          (c) **Non-Solicitation of Employees**. During the term of Employee’s employment and for a periodof 12 months after the termination of Employee’s employment with Employer, regardless of the reasontherefore, Employee shall not directly or indirectly, for himself, or on behalf of, or inconjunction with, any other person, company, partnership, corporation, or other entity, seek tohire or hire any of Employer’s personnel or employees, with the exception of his ExecutiveAssistant, for the purpose of having such employee engage in services that are the same, similar,or related to the services that such employee provided for Employer.          (d) **Confidential Information**. Employee shall maintain in strict secrecy all confidential ortrade secretinformation, whether patentable or not, relating to the business of Employer (the“Confidential Information”) obtained by Employee in the course of Employee’s employment, andEmployee shall not, unless first authorized in writing by Employer, disclose to, or use forEmployee’s benefit or for the benefit of any person, firm, or entity at any time either during orsubsequent to the term of Employee’s employment, any Confidential Information, except as requiredin the performance of Employee’s duties on behalf of Employer. For purposes hereof, ConfidentialInformation shall include without limitation any technical plans and drawings or otherreproductions or materials of any kind; any financial information with respect to Employer or itsbusiness; any trade secrets, knowledge, or information with respect to products, processes,inventions, formulae, software, source codes, object codes, algorithms, and services provided; anyoperating procedures, techniques, or know-how; any business methods or forms; any names, addresses,or data on suppliers or customers; and any business policies or other information relating to ordealing with the purchasing, sales, advertising, promotional, or distribution policies or practicesof Employer.          (e) **Return of Books and Papers**. Upon the termination of Employee’s employment with Employerfor any reason, Employee shall deliver promptly to Employer all samples or demonstration models,catalogues, manuals, memoranda, drawings, software, source or object code, formulae, andspecifications, and operating procedures; all cost, pricing, and other financial data; all supplierand customer information; all other written or printed materials that are the property of Employer(and any copies of them); and all other materials which may contain Confidential Informationrelating to the business of Employer, which Employee may then have in his possession whetherprepared by Employee or not.          (f) **Disclosure of Information**. Employee shall disclose promptly to Employer, or its nominee,any and all ideas, designs, processes, and improvements of any kind relating to the business ofEmployer, whether patentable or not, conceived or made by Employee, either alone or jointly withothers, during working hours or otherwise, during the entire period of Employee’s employment withEmployer, or within six months thereafter.
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          (g) **Assignment**. Employee hereby assigns to Employer or its nominee the entire right, title,and interest in and to all inventions, discoveries, and improvements, whether patentable or not,that Employee may conceive or make during Employee’s employment with Employer, or within six monthsthereafter, and which relate to the business of Employer. Whenever requested to do so by Employer,whether during the period of Employee’s employment or thereafter, Employee shall execute any andall applications, assignments, and other instruments that Employer shall deem necessary orappropriate to apply for, obtain, or maintain Letters Patent of the United States or of any foreigncountry, or to protect otherwise the interest of Employer therein.          (h) **Equitable Relief**. In the event a violation of any of the restrictions contained in this Section 5 isestablished, Employer shall be entitled to preliminary and permanent injunctive relief as well asdamages and an equitable accounting of all earnings, profits, and other benefits arising from suchviolation, which right shall be cumulative and in addition to any other rights or remedies to whichEmployer may be entitled. In the event of a violation of any provision of Sections 5(b),5(c), 5(f), or 5(g) of this Agreement, the period for which thoseprovisions would remain in effect shall be extended for a period of time equal to that periodbeginning when such violation commenced and ending when the activities constituting such violationshall have been finally terminated in good faith.          (i) **Restrictions Separable**. If the scope of any provision of this Section 5 is foundby a Court to be too broad to permit enforcement to its full extent, then such provision shall beenforced to the maximum extent permitted by law. The parties agree that the scope of any provisionof this Section 5 may be modified by a judge in any proceeding to enforce this Agreement,so that such provision can be enforced to the maximum extent permitted by law. Each and everyrestriction set forth in this Section 5 is independent and severable from the others, andno such restriction shall be rendered unenforceable by virtue of the fact that, for any reason, anyother or others of them may be unenforceable in whole or in part.          (j) **Survival**. Employer and Employee acknowledge and agree that the obligations and rights setforth in this Section 5 shall survive the termination of this Agreement and Employee’semployment by either Employer or Employee under Section 4 of this Agreement.     6. **Miscellaneous.**          (a) **Notices**. All notices, requests, demands, and other communications required or permittedunder this Agreement shall be in writing and shall be deemed to have been duly given, made, andreceived (i) if personally delivered, on the date of delivery, (ii) if by facsimile transmission,24 hours after transmitter’s confirmation of the receipt of such transmission, (iii) if mailed,three days after deposit in the United States mail, registered or certified, return receiptrequested, postage prepaid and addressed as provided below, or (iv) if by a courier deliveryservice providing overnight or “next-day” delivery, on the next business day after deposit withsuch service addressed as follows:
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          (1) If to Employer:             Vodavi Technology, Inc.      4717 East Hilton Avenue      Suite 400      Phoenix, Arizona 85034      Attention: Chairman of the Board      Fax: (480) 483-0144             with a copy given in the manner