Exhibit 10.5
                              EMPLOYMENT AGREEMENT

     AGREEMENT,  dated as of the  15th  day of  August,  1996,  between  C-PHONE
CORPORATION (formerly Target Technologies,  Inc.), a New York corporation having
its executive office at 6714 Netherlands Drive, Wilmington, North Carolina 28405
(the "Company"), and David DeSimone, residing at 2365 Kimbrough Court, Dunwoody,
GA 30350 (the "Employee").

     The Company  desires to employ the Employee on the terms and conditions set
forth herein, and the Employee desires to accept such employment.

     In  consideration  of the  undertakings  set forth in this  Agreement,  and
intending to be legally bound, the parties agree as follows:

     1. GENERAL AGREEMENT FOR SERVICES. The Company employs the Employee and the
Employee accepts employment, upon the terms and conditions of this Agreement.

     2. TERM OF  EMPLOYMENT.  The  Employee  shall be  available to commence and
shall  commence  full-time  employment  on  September  3,  1996.  Subject to any
provisions of this Agreement  governing  extension or early  termination of this
Agreement, the term of employment shall be two years (the "Initial Term"). After
the Initial Term, this Agreement shall continue for successive terms of one year
unless  terminated  by either party giving notice of intention not to renew this
Agreement  at least 90 days prior to the end of the Initial  Term or the renewal
term then in effect.

     3. DUTIES.
        ------

     (a) The Employee shall devote the Employee's  attention and energies to the
business of the Company and its affiliates,  if any, on a full-time  basis,  and
shall not, during the term of this  Agreement,  be engaged in any other business
activity,  whether or not such business  activity is pursued for gain, profit or
other  pecuniary  advantage;  but this shall not be construed as preventing  the
Employee from investing the Employee's assets in such manner as will not require
the  Employee  to expend any time or effort in regard  thereto or to perform any
services in connection therewith.

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<PAGE>

     (b) The  Employee  shall serve the Company and its  affiliates  faithfully,
diligently and in good faith.

     (c) The  Employee  shall  perform  such  services as may be required of the
Employee  by  the  Company  and  its  affiliates,   under  and  subject  to  the
instructions,  directions  and control of the Board of Directors  and the senior
executives of the Company,  including  without  limitation  the Company's  chief
executive officer and the Company's chief operating officer.  The Employee shall
serve  initially as the Vice President of Sales & Marketing of the Company.  The
Employee's  primary  responsibility  shall be to perform those duties reasonably
required  of, and related to, the  Employee's  position and such other duties as
may be assigned  to the  Employee  from time to time which are not  inconsistent
with those  customarily  assigned to senior  employees  of the  Company.  If the
Employee is elected as a director of the Company or is promoted to a more senior
position  within the Company,  during the term of this  Agreement,  the Employee
shall serve in such capacities without further remuneration.

     (d) At all times  during the term of this  Agreement,  the  Employee  shall
adhere to all  rules and  regulations  that have been or that  hereafter  may be
established by the Company for the conduct of its employees.

     (e) The  Employee  shall  be  based at the  Company's  principal  executive
office.  Travel  and  temporary  work  assignments  at  other  locations  may be
required,  but  shall  be of a kind  and  frequency  common  for the  Employee's
position or shall result from periodic  assignment to tasks  appropriate for the
Employee.

     (f) The  Employee  affirms  that the  Employee is in good  health,  with no
chronic or recurring illness,  and is insurable at normal rates. If requested by
the Company, the Employee shall cooperate in applying for and obtaining,  at the
Company's expense, key-man insurance for the benefit of the Company.

     4. COMPENSATION.  As and for full and complete compensation to the Employee
for the services  the Employee  agrees to render  pursuant  hereto,  the Company
agrees to pay to the Employee and the Employee agrees to accept the following:

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<PAGE>

     (a) The Company shall pay the Employee during the term of this Agreement an
annual salary of no less than  $100,000.00  (the "Base Salary") payable in equal
bi-weekly  installments,  or as otherwise  may be the practice of the Company in
making salary payments.

     (b) The Employee  shall be granted stock options to purchase  shares of the
Company's  stock  under the  Company's  1994 Stock  Option  Plan as set forth on
Schedule A - Employee  Stock  Options  (which  schedule is hereby made a part of
this agreement).

     (c) During the term of this  Agreement,  the Employee  shall receive a cash
bonus  based  upon  sales  performance  as set forth on  Schedule B - Cash Bonus
(which schedule is hereby made a part of this agreement).  During the first year
of employment, the Employee shall have the right to receive advances against the
cash bonus in the amount of $7,500 per three month period.  The advance shall be
payable  at the end of  each  three  month  period  during  such  first  year of
employment. If earned cash bonuses are less than the total advances, the deficit
shall be repaid by the Employee and, if not repaid,  may be deducted from future
compensation payments.

     (d) In consideration for the Employee's  relocation to the Wilmington area,
the Employee shall receive a non-accountable  relocation  expense payment as set
forth on Schedule C - Relocation  Package (which  schedule is hereby made a part
of this agreement).

     (e) The Company, in its sole and absolute discretion,  at any time and from
time to time, may increase the  compensation to be paid to the Employee,  either
permanently  or  for a  limited  period,  or  pay to  the  Employee  such  bonus
compensation as the Company may determine in its sole discretion.

     (f) All  compensation  paid to the Employee shall be subject to withholding
and deductions to the extent required by applicable law.

     (g) The Employee  shall be eligible to  participate in and to be covered by
each life insurance,  accident insurance,  health insurance and hospitalization,
or other plan or benefit, if any, effective generally (and not only with respect
to a specific  individual  or  individuals)  with  respect to  employees  of the

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<PAGE>

Company, if the Employee shall be eligible under the terms of such plan, without
restriction or limitation by reason of this Agreement. Nothing contained herein,
however, shall be construed to require the Company to establish any plans not in
existence  on the date  hereof,  to continue  any plans in existence on the date
hereof,  or to prevent the Company from modifying and/or  terminating any of the
plans in  existence  on the date  hereof,  and no such act or omission  shall be
deemed to affect this Agreement or any of the provisions contained herein.

     (h) Each full year of this  Agreement,  the Employee shall be entitled to a
vacation  of two weeks  with  full  compensation.  The  Employee  shall  also be
entitled  to all paid  holidays  given by the  Company to its senior  employees.
Vacation days not taken shall not  accumulate  and shall not be available to the
Employee  in  subsequent  years  of  this  Agreement,  unless  the  Employee  is
restricted  from  taking any  planned  vacation  at the  written  request of the
Company.  Vacations  shall be coordinated  with the chief  executive  officer or
chief operating officer of the Company,  shall be scheduled by the Employee with
due regard to the Employee's activities and responsibilities for the Company and
shall not be for a continuous period of more than two weeks.

     (i) The  Employee  shall be entitled to  reimbursement  for all  reasonable
out-of-pocket expenses incurred in performing the Employee's services hereunder,
within the limits of authority which may be established by the Company from time
to time,  provided  that the Employee  properly  accounts  for such  expenses in
accordance with the Company policy.


     5. CONFIDENTIALITY.
        ---------------

     (a) The Employee shall treat as confidential any proprietary,  confidential
or non-public  information  relating to the business or interests of the Company
or any affiliate of the Company, including,  without limitation,  business plans
or technical projects of the Company or any affiliate, and any research datum or
result, invention,  customer list, process or other work product developed by or
for the  Company or any  affiliate,  whether on the  premises  of the Company or
elsewhere ("Confidential Information"). The Employee shall not disclose, utilize
or make  accessible  in any manner or in any form any  Confidential  Information
other than in connection with  performing the services  required of the Employee
under this Agreement, without the prior consent of the Company.  Notwithstanding

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<PAGE>

the  foregoing,  the  provisions  of this  Section  5(a)  shall not apply to any
Confidential Information which is, or at some later date becomes, publicly known
under  circumstances  involving no breach of this Agreement or which is required
to be  disclosed  pursuant to order or  requirement  of a court,  administrative
agency or other  governmental  body,  provided  that the  Company has been given
appropriate  notice  of such  proceeding  and an  opportunity  to  contest  such
disclosure.

     (b)  All  business  and  technical  records,  information  relating  to the
business of the Company and its affiliates,  papers, documents,  correspondence,
or studies containing information relating to the Company and its affiliates, in
all cases irrespective of the manner in which such information is kept or stored
("business  records"),  made or kept by the  Employee  or under  the  Employee's
possession or control shall be and remain the property of the Company, and shall
be surrendered to the Company upon the termination of the Employee's employment.
Upon such  termination,  the  Employee  shall not take  with  him,  publish,  or
disclose,  or otherwise use, without the consent of the chief executive  officer
of the Company, any business records.

     (c) The Employee agrees that during the period of the Employee's employment
hereunder  and for a period of two years  following  the date  upon  which  such
employment shall terminate, the Employee shall not, in any capacity,  compete or
attempt  to  compete  with  the  business  of  the  Company;  and  the  Employee
acknowledges that a portion of the payments being made to the Employee hereunder
are being made, in part, as consideration for such noncompetition agreement. The
Employee  represents  and  agrees  that in the event of the  termination  of the
Employee's employment hereunder, the Employee's experiences and capabilities are
such that the Employee can obtain  employment in a non-competing  business,  and
that the  enforcement  of a remedy by way of  injunction  will not  prevent  the
Employee from earning a livelihood.  The Employee further  represents and agrees
that  the  covenants  contained  in this  Section  5(c)  are  necessary  for the
protection of the Company's  legitimate business interests and are reasonable in
scope and content.

     (d) The  provisions of this Section 5 on the part of the Employee  shall be
construed as an agreement  independent of any other provision  contained in this
Agreement  and  shall  be  enforceable  in both  law and  equity,  including  by

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<PAGE>

temporary or permanent  restraining order,  notwithstanding the existence of any
claim or cause of action of the Employee against the Company or any affiliate of
the Company, whether predicated on this Section 5 or otherwise.

     (e) The Employee  agrees that all processes,  technologies  and inventions,
including  new  contributions,   improvements,  ideas  or  discoveries,  whether
patentable  or not,  conceived,  developed,  invented  or made by or  under  the
supervision of the Employee  (collectively,  "Inventions" ) during the period of
the Employee's employment by the Company, shall belong to the Company,  provided
that the  Inventions  grow out of the  Employee's  work with the  Company or are
related  in any  manner to any  business  (commercial  or  experimental)  of the
Company.  The Employee  agrees that the Employee shall promptly (i) disclose all
Inventions  to the  Company,  (ii)  assign to the  Company,  without  additional
compensation,  all patents  and other  rights to all  Inventions  for the United
States and all foreign  countries,  (iii) sign all papers necessary to carry out
the above,  and (iv) give  testimony  (but without  expense to the  Employee) in
support  of the  Employee's  inventorship.  In the event that any  Invention  is
described  in a patent  application  or is  disclosed  to third  parties  by the
Employee,  directly or  indirectly,  within one year after leaving the employ of
the  Company,  it is to be presumed  that the  Invention  was  conceived or made
during the period of the  Employee's  employment  by the  Company.  The Employee
agrees  that the Company  shall be  entitled to shop rights with  respect to any
Invention  conceived or made by the Employee during the period of the Employee's
employment  by the  Company  that is not  related in any manner to any  business
(commercial or  experimental)  of the Company but which was conceived or made on
the  Company's  time or with the use of the  Company's  facilities or materials.
Attached as an exhibit to this  Agreement is a complete list of any  Inventions,
patented  or  unpatented  (including  a brief  description  thereof),  which the
Employee  conceived or made prior to the  Employee's  employment by the Company,
and which the Employee desires to exclude from this Agreement. There is no other
contract to assign  Inventions that is now in existence between the Employee and
any other person, firm or corporation,  unless indicated on the exhibit, if any,
attached  to this  Agreement,  and unless a copy of any such other  contract  is
attached to such exhibit.

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<PAGE>

         6.  TERMINATION.
             -----------

     (a) DEATH. In the event that the Employee shall die during the term of this
Agreement,  then,  notwithstanding  any other provisions  hereof, the Employee's
employment  hereunder and the term of this Agreement shall terminate  forthwith.
In addition to any unpaid compensation then accrued, the Employee's Estate shall
be entitled to receive the proceeds of any life insurance on the Employee's life
if and to the extent then maintained by the Company for the Employee's  specific
benefit.

     (b) DISABILITY.  If the Employee shall become incapacitated during the term
of this Agreement to such an extent that the Employee shall be unable to perform
the Employee's duties hereunder, and such incapacity shall continue for at least
six  consecutive  weeks or for at least 60 days in any twelve month period,  the
Company may, at or at any time  thereafter,  and during the  continuance of such
incapacity,  give notice to the Employee of the  termination  of the  Employee's
employment  hereunder on an date stated in such notice,  and, in such event, the
Employee's  employment  hereunder and the term of this Agreement shall terminate
on such date;  PROVIDED,  HOWEVER,  that such  termination  shall not affect any
disability payments otherwise due hereunder to the Employee. Irrespective of the
foregoing,  the Employee  also may be  terminated by the Company at such time as
the  Employee  becomes  unable to  perform  any  duties  hereunder  by reason of
disability,  as defined in the Employer's disability insurance coverage, if any,
if the Employee is then entitled to disability payments under such coverage at a
rate at least equal to two-thirds of the Employee's Base Salary.

     (c) FOR CAUSE. If, during the term of this Agreement, the employment of the
Employee by the Company should  terminate by reason of the Employee's  voluntary
action,  or by the Company  for  "Cause",  then the  Company's  obligations  for
payment or delivery of salary,  incentive bonus, if any, and other  entitlements
under  this  Agreement  with  respect  to  any  future  period  shall  thereupon
terminate. Written notice of termination for Cause shall be given by the Company
to the  Employee  and shall be  effective  upon  receipt.  For  purposes of this
Agreement,  Cause includes (i) the  Employee's (a) willful  refusal to carry out
specific  lawful  directions  of the Board of  Directors,  the  chief  executive
officer of the  Company or the chief  operating  officer of the  Company,  which
directions  shall be consistent  with the provisions of this  Agreement,  or (b)
refusal,  failure or  inability  to  perform  part of the  Employee's  duties or

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<PAGE>

responsibilities  to the Company and its affiliates,  which refusal,  failure or
inability,  whether under  subclause (a) or subclause (b) of this clause (i), is
not  remedied  promptly,  but in no event  later  than,  five days after  notice
thereof to the  Employee,  (ii) the  Employee's  commission  of an act of fraud,
misappropriation or dishonesty (including  falsification of information (such as
with respect to the Employee's prior experience or ability,  among other things)
given to the Company in connection  with the Employee's  hire) to the Company or
any of its affiliates or falsification  of a written  document  delivered to the
Company or any of its affiliates or on the Company's or such affiliate's behalf,
(iii) the  Employee's  commission  of a crime  with  respect  to  which,  in the
reasonable judgment of the Company, the Employee is likely to be incarcerated or
as a result of which the Company,  in its  reasonable  judgment,  determines  it
would be  inappropriate  for the  Employee  to  continue  as an  employee of the
Company,  and (iv) notice of intention to breach any of the terms or  conditions
of this Agreement.

     (d) WITHOUT CAUSE. If, during the term of this Agreement, the employment of
the Employee shall be terminated by the Company without Cause,  then the Company
shall continue to pay the Employee the Employee's Base Salary, during the lesser
of (I) the balance of the current term of this Agreement, or (ii) two months, on
the normal salary payment  dates.  The Employee shall have no duty to attempt to
mitigate  such  obligation  of  the  Company;   PROVIDED,   HOWEVER,   that  any
compensation  thereafter earned by the Employee from any other source during the
foregoing period shall be offset against such obligation of the Company.  In the
event of such termination,  all other obligations of the Company to the Employee
under this  Agreement  arising  and  accruing  after the date of the  Employee's
termination shall terminate,  except as otherwise  specifically  provided to the
contrary under this Agreement or by applicable  law. The Employee shall have the
right to elect to  terminate  this  Agreement,  and treat  such  termination  as
non-voluntary by the Employee and a termination without Cause by the Company, if
the Employee does not receive from the Company any compensation or other payment
due to the  Employee  (pursuant  to this  Agreement)  within ten days after such
compensation or other payment is due; PROVIDED,  HOWEVER,  that the Company does
not remedy such action within  fifteen days after notice thereof by the Employee
to the Company.

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<PAGE>

     7.  INDEMNITY  OF EMPLOYEE FOR GOOD FAITH ACTS AND  OMISSIONS.  The Company
agrees to  indemnify,  defend  and hold the  Employee  harmless  of and from any
liability, loss, expense, claim, cost, or other damage whatsoever arising out of
or in connection  with any act or omission of the Employee,  taken or omitted in
good  faith in any  capacity  in which the  Employee  is acting  for,  or at the
request of, the Company, to the extent permitted by applicable law.

     8. MISCELLANEOUS PROVISIONS.
        ------------------------

     (a) ENTIRE  AGREEMENT.  This Agreement sets forth the entire  agreement and
understanding between the parties with respect to the employment of the Employee
by  the  Company  and  supersedes  all  prior   agreements,   arrangements   and
understandings between the parties with respect thereto.

     (b)  MODIFICATION.  This  Agreement may be amended,  modified,  superseded,
canceled,  renewed or extended, and the terms or covenants hereof may be waived,
only by an instrument  executed by the party to be charged,  or in the case of a
waiver, by the party waiving compliance.

     (c)  WAIVER.  The  failure of either  party at any time or times to require
performance  of any  provision  of this  Agreement in no manner shall affect the
right at a later time to enforce the same. No waiver by either party of a breach
of any term or  covenant  contained  in this  Agreement,  whether  by conduct or
otherwise, in any one or more instances, shall be deemed to be or construed as a
further or continuing  waiver of any such breach,  or a waiver of any other term
or covenant contained in this Agreement.

     (d)  NOTICES.   All   notices,   demands,   consents,   waivers  and  other
communications  ("Communications")  given under this Agreement may be in writing
and shall be given  (and  shall be deemed  to have  been  duly  given)  upon the
earlier of actual  receipt,  one  business  day after  being sent by telegram or
telecopier  or three  business  days after being sent by registered or certified
mail to the parties at the addresses set forth above or to such other address as
either party may hereafter specify by notice to the other party.  Simultaneously
with sending a Communication to the Company,  a copy of the Communication  shall
be sent to Warshaw Burstein Cohen Schlesinger & Kuh, LLP, 555 Fifth Avenue,  New
York,  New York  10017,  Attention:  Arthur A. Katz,  Esq.  Irrespective  of the
foregoing, notice of change of address shall be effective only upon receipt.

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<PAGE>

     (e) GOVERNING LAW. This Agreement and any  supplemental  agreements  hereto
shall be construed in  accordance  with and governed by the laws of the State of
North Carolina  applicable to contracts  made and to be performed  wholly within
such state and the courts of said state,  including the federal courts  therein,
shall have sole and  exclusive  jurisdiction  of the  parties and of the subject
matter of their  respective  agreements.  Venue for any legal action shall be in
New Hanover County,  North Carolina and in any legal action between the parties,
service of process may be accomplished by certified mail..

     (f) ATTORNEYS' FEES AND DISBURSEMENTS. In the event that either party takes
legal action to enforce any of the provisions of this Agreement,  the prevailing
party  shall  be  entitled  to  recover  all  reasonable  expenses  incurred  in
connection therewith.

     (g)   ASSIGNABILITY.   This  Agreement,   and  the  Employee's  rights  and
obligations  hereunder,  may not be  assigned by the  Employee.  The Company may
assign its rights,  together with its obligations  hereunder,  to a successor by
merger or to a purchaser of substantially all of its assets, and such rights and
obligations shall inure to, and be binding upon, any such successor.

     (h) BINDING  EFFECT.  This Agreement shall be binding upon and inure to the
benefit  of the  parties  and their  respective  legal  representatives,  heirs,
successors and permitted assigns.

     (i)  INVALIDITY.  The  invalidity  of any  part  of this  Agreement  is not
intended to render invalid the remainder of this Agreement.  If any provision of
this Agreement is so broad as to be unenforceable, such provision is intended to
be interpreted to be only so broad as is enforceable.

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<PAGE>

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

C-PHONE CORPORATION



By: /s/ DANIEL FLOHR
   ----------------------------------
        Daniel Flohr, President and
        Chief Executive Officer

EMPLOYEE



    /s/ DAVID DESIMONE
   ----------------------------------
        David DeSimone


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<PAGE>



SCHEDULE A

EMPLOYEE STOCK OPTIONS
----------------------

Stock  Options  under the  Company's  1994 Stock  Option Plan to acquire  40,000
shares  of the  Company's  common  stock  shall  be  granted  as of the  date of
commencement  of employment  (option price is determined by market price at that
time)  and  shall be  exercisable  in  accordance  with the terms of the plan as
follows:

         10,000 shares after one year from date of grant

         10,000 shares after two years from date of grant

         10,000  shares after three years from date of grant

         5,000  shares  after six  months  from date of grant if  C-Phone  sales
         (excluding  the set top box)  equal or  exceed  $3,000,000  for the six
         month period beginning September 1, 1996 through February 28, 1997.

         5,000  shares  after  one year  from  date of grant  if  C-Phone  sales
         (excluding  the set top box)  equal or  exceed  $6,000,000  for the six
         month period beginning March 1, 1997 through August 31, 1997.

Additional stock options under the Company's 1994 Stock Option Plan to acquire a
minimum of 20,000 shares of the Company's common stock shall be granted on terms
and  conditions  established  by the  Compensation  Committee  of the  Board  of
Directors  at the time of the grant  (option  price to be  determined  by market
price at the time of grant) as follows:

         a minimum of 10,000  shares at the first  meeting  of the  Compensation
         Committee of the Board of Directors  occurring after February 28, 1997,
         which  shall be  exercisable  based upon  achieving  performance  goals
         during the twelve month period ending February 28, 1998 ("Fiscal 1998")
         to be  established  by  the  Compensation  Committee  of the  Board  of
         Directors at that time.

         a minimum of 10,000  shares at the first  meeting  of the  Compensation
         Committee of the Board of Directors  occurring after February 28, 1998,
         which  shall be  exercisable  based upon  achieving  performance  goals
         during the twelve month period ending February 28, 1999 ("Fiscal 1999")
         to be  established  by  the  Compensation  Committee  of the  Board  of
         Directors at that time.

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<PAGE>

SCHEDULE B


ANNUAL CASH BONUS FOR C-PHONE SALES ONLY (EXCLUDING SET TOP BOX)
----------------------------------------------------------------

         FOR PERIOD 09/01/96 - 02/28/97
         ------------------------------

         $15,000 bonus if period sales are $2 million, but less than $3 million

         $30,000 bonus if period sales are $3 million, but less than $4 million

         $50,000 bonus if period sales are $4 million, but less than $5 million

         $75,000 bonus if period sales are $5 million, but less than $6 million

         $100,000 bonus if period sales are or exceed $6 million

         FOR FISCAL 1998 & 1999
         ----------------------

         $30,000 bonus if annual sales are $4 million, but less than $6 million

         $60,000 bonus if annual sales are $6 million, but less than $8 million

         $100,000  bonus if  annual  sales  are $8  million,  but less  than $10
         million

         $150,000  bonus if  annual  sales  are $10  million,  but less than $12
         million

         $200,000  bonus if  annual  sales  are $12  million,  but less than $15
         million

         $300,000 bonus if annual sales are $15 million

         If annual sales exceed $15 million,  bonus will be  determined  in good
         faith by the Compensation Committee of the Board of Directors.

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<PAGE>


SCHEDULE C


RELOCATION PACKAGE
------------------

Payment aggregating $35,000 will be made on the following schedule:

         $5,000 At the signing of the Employment Agreement

         $7,500 October 1, 1996

         $22,500  Upon  closing of the sale of the  DeSimone  residence  at 2365
         Kimbrough Court, Dunwoody, GA, 30350

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