<PAGE>
 
                                                                   Exhibit 10.10
                                                                   -------------

                              EMPLOYMENT AGREEMENT
                                        

          THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
as of June 26, 1998 (the "Effective Date"), by and between Talton Holdings,
Inc., a Delaware corporation (the "Company"), and Donald B. Vaello (the
"Executive").

                                    RECITALS
                                        
          WHEREAS, the Company is the owner of the outstanding shares of capital
stock of (i) Talton Telecommunications Corporation, an Alabama corporation
("TTC"), (ii) AmeriTel Pay Phones, Inc., a Missouri corporation ("AmeriTel"),
(iii) Talton STC, Inc., a Delaware corporation ("Talton STC"), (iv) Talton
Invision, Inc., a Delaware corporation ("Talton Invision"), and (v) MOG
Communications, Inc., an Alabama corporation ("MOG") (the Company, TTC,
AmeriTel, Talton STC, Talton Invision, MOG and their respective affiliates and
subsidiaries are sometimes referred to herein individually as a "Talton Entity"
and collectively as the "Talton Entities");

          WHEREAS, the Company desires to employ the Executive and the Executive
desires to furnish services to the Company and/or the other Talton Entities on
the terms and conditions hereinafter set forth;

          WHEREAS, the parties desire to enter into this Agreement in order to
set forth the terms and conditions of the employment relationship of the
Executive with the Talton Entities;

          WHEREAS, the Executive and the Company each acknowledge and agree that
the terms and conditions of employment set forth below are reasonable and
necessary in order to protect the legitimate business interests of the Talton
Entities and to compensate the Executive for information, knowledge and
experience brought to or gained from the Talton Entities;

          NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth below, the parties hereby agree as follows:

          1.  EMPLOYMENT.  The Company hereby agrees to employ the Executive,
and the Executive hereby accepts such employment, on the terms and conditions
hereinafter set forth.


          2.  EMPLOYMENT PERIOD.  The period of employment of the Executive by
the Company hereunder (the "Employment Period") shall commence on the Effective
Date and shall end on June 30, 2001, (unless earlier terminated in accordance
with Section 5 of the Agreement).  Commencing on July 1, 2001, the Employment
Period shall be extended for successive one-year periods (individually, a
"Renewal Period"), unless a notice not to extend this Agreement shall have been
given by either party hereto to the other not later than 90 days immediately
preceding the commencement of the Renewal Period (or unless earlier terminated
in accordance with Section 5 of this Agreement).  Unless the context otherwise
requires, the Employment Period hereunder shall for purposes of this Agreement
be deemed to include the current Renewal Period (if any).

          3.  POSITION AND DUTIES.  The Executive shall, within reason, devote
his full time, attention, skills and energies during the Employment Period to
the business of the Talton Entities, performing such specific functions on
behalf of the Talton Entities and holding such executive positions as the Board
of Directors or the Chairman of the Board of the Company or any Talton Entity
may direct, all of which shall be substantially consistent with the functions of
an executive officer within the industry in which the Talton Entities are
engaged.

          4.  COMPENSATION AND RELATED MATTERS.

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          (a) BASE SALARY.  During the Employment Period, the Company shall pay
the Executive a base salary at the rate specified in Exhibit A (the "Base
Salary"), which Base Salary shall be paid in equal installments in accordance
with the Company's payroll policy, subject to Section 5 below.

          (b) BONUS.  During the Employment Period, the Executive shall be
eligible for the annual bonus as specified in Exhibit A.

          (c) OPTIONS.  The Executive shall be eligible to be awarded options to
purchase the Company's common stock, as specified in Exhibit A.

          (d) OTHER BENEFITS.  During the Employment Period, the Executive shall
be entitled to and eligible for group health insurance coverage and any other
fringe benefits in accordance with policies applicable generally to salaried
Executives of the Company.  The Executive shall also be entitled to paid
vacation and other paid absences during the Employment Period in accordance with
policies applicable generally to salaried Executives of the Company.

          (e) RELOCATION.  The Executive shall be reimbursed for reasonable out-
of-pocket expenses incurred in relocating to the Dallas-Ft. Worth, Texas area.

          5.  TERMINATION.

          (a) TERMINATION FOR CAUSE.  Prior to the end of the Employment Period,
the Company may terminate the Executive's employment under this Agreement for
"Cause".  For purposes of this Agreement, the Company shall have Cause to
terminate the Executive's employment hereunder in the event the Executive: (i)
has committed any act of willful misconduct, embezzlement or wrongful conversion
of money or property belonging to any Talton Entity, or any act of fraud or
dishonesty that affects the business of or relates to any of the Talton
Entities; (ii) is convicted of a felony at any time hereafter; (iii) has failed
to comply with any material directive of the Board of Directors or the Chairman
of the Board of the Company related to his employment duties and such failure is
duly recorded in the Company's corporate minutes; or (iv) has willfully and
continually failed to substantially perform his duties hereunder (other than any
such failure resulting from the Executive's death or disability), and such
failure is duly recorded in the corporate minutes and continues for more than 10
days after written notice thereof to the Executive.  If the Executive's
employment is terminated by the Company for Cause, the Company shall pay the
Executive any Base Salary accrued or owing to the Executive hereunder through
the date of termination, less any amounts owed by the Executive to any Talton
Entity, and the Company shall have no further liability or obligation to the
Executive hereunder.

          (b) TERMINATION WITHOUT CAUSE.  Prior to the end of the Employment
Period, the Company may terminate the Executive's employment under this
Agreement for a reason other than Cause or no reason whatsoever (i.e., without
Cause).  If the Company terminates the Executive's employment without Cause
prior to the expiration of the Employment Period, the Company's liability to the
Executive is limited to an amount equal to the Executive's annual Base Salary
(the "Severance Payment").  The Company may, at its option, pay the Severance
Payment in a lump sum within 30 days after the date of termination of
employment, or pay the Severance Payment over a twelve month period (commencing
effective as of the date of termination of employment) in equal installments in
accordance with the Company's payroll policy.  If the Company terminates
employment of the Executive because he has become disabled such that he is
unable to perform the essential functions of his job (with reasonable
accommodation), any such termination shall be deemed to be a termination without
Cause pursuant to this Agreement.  Similarly, the Executive's employment shall
terminate upon his death, and shall be deemed a termination by the Company
without Cause, with payments of the Severance Payment hereunder to be made to
the Executive's estate.

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          6.  CONFIDENTIAL INFORMATION, REMOVAL OF DOCUMENTS,
              DEVELOPMENTS AND NON-COMPETITION, RELEASE.

          (a) CONFIDENTIAL INFORMATION.  The Executive shall hold in a fiduciary
capacity for the benefit of the Company and the other Talton Entities all trade
secrets, confidential information, proprietary information, knowledge and data
relating to the Talton Entities and/or the businesses or investments of the
Talton Entities which may have been obtained by the Executive during the
Executive's employment by the Company or any other Talton Entity including such
information with respect to any products, improvements, formulas, designs or
styles, processes, services, customers, suppliers, marketing techniques,
methods, know-how, data, future plans or operating practices ("Confidential
Information").  Except as may be required or appropriate in connection with his
carrying out his duties under this Agreement, the Executive shall not, without
the prior written consent of the Company or as may otherwise be required by law
or legal process, communicate or divulge any such Confidential Information to
anyone other than the Company and those designated by the Company.

          (b) REMOVAL OF DOCUMENTS.  All records, files, drawings, letters,
memoranda, reports, computer data, computer disks, electronic storage media,
documents, models and the like relating to the business of the Company and/or
the business of any of the other Talton Entities, which the Executive prepares,
uses or comes into contact with and which contain Confidential Information shall
be the exclusive property of the Company to be used by the Executive only in the
performance of his duties for the Company and shall not be removed by the
Executive from the premises of any Talton Entity (without the written consent of
the Company) during or after the Employment Period unless such removal shall be
required or appropriate in connection with his carrying out his duties under
this Agreement, and, if so removed by the Executive, shall be returned to such
Talton Entities immediately upon termination of the Executive's employment
hereunder, or earlier request by the Company (with the Executive retaining no
copies thereof nor any notes or other records relating thereto).

          (c) DEVELOPMENTS.  The Executive will make full and prompt disclosure
to the Company of all inventions, improvements, discoveries, methods,
developments, software and/or works of authorship relating in any way to the
business, activities or affairs of any of the Talton Entities, whether
patentable or not, which are created, made, conceived or reduced to practice (in
whole or in part) by the Executive or under his direction or jointly with others
prior to or during the Employment Period, whether or not during normal working
hours or on the premises of the Company (collectively, "Developments").  The
Executive agrees to assign and does hereby assign to the Company all of his
right, title and interest in and to all Developments and related patents,
copyrights and applications therefor.  The Executive shall do all permissible
things, and take all permissible action, necessary or advisable, in the
Company's sole discretion and at the Company's expense, to cause any other
person related to the Executive or an entity controlled by the Executive having
an interest in a Development to assign to the Company all of such person's or
entity's right, title and interest in and to such Development and related
patents, copyrights and applications therefor. The Executive agrees to cooperate
fully with the Company, both during and after the termination of the Employment
Period, with respect to the procurements, maintenance and enforcement of
copyrights and patents (both in the United States and foreign countries)
relating to Developments.

          (d) NON-COMPETITION.  During (i) the Executive's employment with the
Company and (ii) the one-year period immediately following the expiration or
earlier termination of the Employment Period, the Executive (A) shall not
engage, anywhere within the geographical areas in which any Talton Entity is
then conducting its business operations, directly or indirectly, alone, in
association with or as a shareholder, principal, agent, partner, officer,
director, Executive or consultant of any other organization, in any Competitive
Business; (B) shall not solicit or encourage any officer, Executive, independent
contractor, vendor or consultant of any of the Talton Entities to leave the
employ of, or otherwise cease his relationship with, any of the Talton Entities;
and (C) shall not solicit, divert or take away, or attempt to divert or to take
away, the business or patronage of any of the customers or accounts, or
prospective customers or accounts, of any Talton Entity, which were contacted,
solicited or served by any Talton Entity during the time the Executive was
employed by any Talton Entity.  If the Executive violates any of the provisions
of this Section 6(d), following his termination of employment, the computation
of the time period provided herein shall be tolled from the first date of the
breach until the earlier of (i) the date judicial relief is obtained by the
Company, (ii) the Company states in writing that it will seek no judicial relief
for said violation, or (iii) the Executive provides satisfactory evidence to the
Company that such breach has been remedied.

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If, at any time, the provisions of this Section 6(d) shall be determined to be
invalid or unenforceable, by reason of being vague or unreasonable as to area,
duration or scope of activity, this Section 6(d) shall be considered divisible
and shall become and be immediately amended to only such area, duration and
scope of activity as shall be determined to be reasonable and enforceable by the
court or other body having jurisdiction over the matter; and the Executive
agrees that this Section 6(d) as so amended shall be valid and binding as though
any invalid or unenforceable provision had not been included herein. For
purposes of this Section 6, Executive and the Company agree that Competitive
Business shall mean (i) the inmate telephone business, (ii) the pay telephone
business, (iii) the business of selling, leasing or otherwise providing law
enforcement management systems, jail management systems, victim notification
systems and/or other tracking or record systems to inmate, jail or correctional
facilities, (iv) the billing, collection and/or validation business, and/or (v)
any line of business in which the Talton Entities derive 10% or more of their
annual revenue and which they designate as a separate line of business for
financial reporting purposes on the date of termination or expiration of the
Employment Period.

          (e) NON-COMPETITION IN EXPANSION MARKETS.  Executive acknowledges that
a valuable asset of the Talton Entities is the plan of the Company and the other
Talton Entities to extend and expand their business, by acquisition or
otherwise, to areas of the United States of America which the Talton Entities do
not yet serve as of the Effective Date.  Accordingly, during (i) the Executive's
employment with the Company and (ii) the one-year period immediately following
the expiration or earlier termination of the Employment Period, the Executive
shall not engage, anywhere in the United States of America, directly or
indirectly, alone, in association with or as a shareholder, principal, agent,
partner, officer, director, Executive or consultant of any other organization,
in any Competitive Business. If the Executive violates any of the provisions of
this Section 6(e), following his termination of employment, the computation of
the time period provided herein shall be tolled from the first date of the
breach until the earlier of (i) the date judicial relief is obtained by the
Company, (ii) the Company states in writing that it will seek no judicial relief
for said violation, or (iii) the Executive provides satisfactory evidence to the
Company that such breach has been remedied.  If, at any time, the provisions of
this Section 6(e) shall be determined to be invalid or unenforceable, by reason
of being vague or unreasonable as to area, duration or scope of activity, this
Section 6(e) shall be considered divisible and shall become and be immediately
amended to only such area, duration and scope of activity as shall be determined
to be reasonable and enforceable by the court or other body having jurisdiction
over the matter; and the Executive agrees that this Section 6(e) as so amended
shall be valid and binding as though any invalid or unenforceable provision had
not been included herein.

          (f) CONTINUING OPERATION.  Any termination of the Executive's
employment or of this Agreement shall have no effect on the continuing operation
of this Section 6.

          (g) LEGITIMATE BUSINESS INTERESTS.  The Executive has carefully read
and considered the provisions of this Section 6 and, having done so, agrees that
the restrictions set forth herein, including, without limitation, the time and
geographic restrictions set forth above, are fair and reasonable and are
reasonably required for the protection of the legitimate business interests and
goodwill of the Company.

          (h) REMEDIES.  The Executive acknowledges that any violation of any of
the covenants and agreements contained in this Section 6 would result in
irreparable and continuing harm and damage to the Company and the other Talton
Entities which would be extremely difficult to quantify and for which money
damages alone would not be adequate compensation.  Consequently, the Executive
agrees that, in the event he violates or threatens to violate any of these
covenants and agreements, the Company shall be entitled to: (1) entry of an
injunction enjoining such violation and/or requiring the Executive to return all
materials or other proprietary information of the Company and (2) money damages
insofar as they can be determined.  Nothing in this Agreement shall be construed
to prohibit the Company and the other Talton Entities from also pursuing any
other legal or equitable remedy, the parties having agreed that all remedies are
cumulative.  The parties waive the right to a jury trial with respect to any
controversy or claim between or among the parties hereto, including any claim
arising out of or relating to this Agreement or based on or arising from an
alleged tort.

          7.  SEVERABILITY.  Whenever possible, each provision and term of this
Agreement will be interpreted in a manner to be effective and valid, but if any
provision or term of this Agreement is held to be

                                       4
<PAGE>
 
prohibited or invalid, then such provision or term will be ineffective only to
the extent of such prohibition or invalidity, without invalidating or affecting
in any manner whatsoever the remainder of such provision or term or the
remaining provisions or terms of this Agreement.

            8. WAIVER.  The rights and remedies of the parties to this Agreement
are cumulative and not alternative.  Neither the failure nor any delay by any
party in exercising any right, power or privilege under this Agreement will
operate as a waiver of such right, power or privilege, and no single or partial
exercise of any such right, power or privilege will preclude any other or
further exercise of such right, power or privilege.  To the maximum extent
permitted by applicable law, (a) no claim or right arising out of this Agreement
can be discharged by one party, in whole or in part, by a waiver or renunciation
of the claim or right unless in writing signed by the other party; (b) no waiver
that may be given by a party will be applicable except in the specific instance
for which it is given; and (c) no notice to or demand on one party will be
deemed to be a waiver of any obligation of such party or of the right of the
party giving such notice or demand to take further action without notice or
demand as provided in this Agreement.

           9.  SUCCESSORS AND ASSIGNS.  This Agreement shall be binding upon and
inure to the benefit of the Company and its affiliates, successors and assigns,
and the Executive and his assigns, heirs and legal representatives.  Each of the
Talton Entities (and their respective affiliates, successors and assigns) shall
be third party beneficiaries of this Agreement and may independently enforce and
benefit from the terms hereof.

          10.  OTHER AGREEMENTS; INDEMNIFICATION.  The Executive hereby
represents that, except as he has disclosed in writing to the Company, the
Executive is not bound by the terms of any agreement with any previous employer
or other party to refrain from using or disclosing any trade secret or
confidential or proprietary information in the course of the Executive's
employment with the Company or to refrain from competing, directly or
indirectly, with the business of such previous employer or any other party.  The
Executive further represents that his performance of all of the terms of this
Agreement does not and will not breach any agreement to keep in confidence
proprietary information, knowledge or data acquired by the Executive in
confidence or in trust prior to the date of this Agreement, and the Executive
will not disclose to the Company or any other Talton Entity or induce the
Company or any other Talton Entities to use any confidential or proprietary
information or material belonging to any previous employer or others.  The
Executive hereby indemnifies and agrees to defend and hold the Company and the
other Talton Entities harmless from and against any and all damages,
liabilities, losses, costs and expenses (including, without limitation,
reasonable attorneys' fees and the costs of investigation) resulting or arising
directly or indirectly from any breach of the foregoing representations or from
allegations, claims, proceedings or actions by third parties relating to the
confidential information belonging to them and disclosed by the Executive to the
Company or any other Talton Entity.

          11.  WITHHOLDING.  Any payments provided for in this Agreement shall
be paid net of any applicable withholding of taxes required under federal, state
or local law.

          12.  RECITALS; HEADINGS; CONSTRUCTION.  The Recitals set forth in the
preamble of this Agreement shall be deemed to be included and form an integral
part of this Agreement.  The headings of Sections in this Agreement are provided
for convenience only and will not affect its construction or interpretation.
All references to "Section" or "Sections" refer to the corresponding Section or
Sections of this Agreement unless otherwise specified.  All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require.  Unless otherwise expressly provided, the word "including" does not
limit the preceding words or terms.  All references herein to the word "or"
shall mean "and/or."  The parties, in acknowledgment that all of them have been
represented by counsel and that this Agreement has been carefully negotiated,
agree that the construction and interpretation of this Agreement and other
documents entered into in connection herewith shall not be affected by the
identity of the party or parties under whose direction or at whose expense this
Agreement and such documents were prepared or drafted.

          13.  TIME OF ESSENCE.  With regard to all dates and time periods set
forth or referred to in this Agreement, time is of the essence.

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          14.  GOVERNING LAW.  This Agreement shall be governed by the
substantive laws of the State of Delaware, without regard to its conflicts of
laws principles.  In particular, Delaware substantive law will govern any
controversy or claim between or among the parties hereto, including any claim
arising out of or relating to this Agreement or based on or arising from an
alleged tort.

          15.  ENTIRE AGREEMENT.  This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior written and oral agreements and
understandings between the parties with respect to the subject matter of this
Agreement.  This Agreement may not be amended except by a written agreement
executed by both parties.

          16.  NOTICES.  Any notice, demand or other communication which may or
is required to be given under this Agreement shall be in writing and shall be:
(a) personally delivered; (b) transmitted by United States postage prepaid mail,
registered or certified mail, return receipt requested; (c) transmitted by
reputable overnight courier service such as Federal Express; or (d) transmitted
by legible facsimile (with answer back confirmation) to the parties' respective
addresses as set forth opposite their signatures hereto).  Except as otherwise
specified herein, all notices and other communications shall be deemed to have
been duly given on (i) the date of receipt if delivered personally, (ii) 2
calendar days after the date of posting if transmitted by registered or
certified mail, return receipt requested, (iii) the first (1st) business day
after the date of deposit if transmitted by reputable overnight courier service
or (iv) the date of transmission with confirmed answer back if transmitted by
facsimile, whichever shall first occur.  A notice or other communication not
given as herein provided shall only be deemed given if and when such notice or
communication is actually received in writing by the party to whom it is
required or permitted to be given.  The parties may change their address for
purposes hereof by notice given to the other parties in accordance with the
provisions of this Section, but such notice shall not be deemed to have been
duly given unless and until it is actually received by the other party.

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          17.  COMMON LAW OR OTHER DUTIES.  The Executive's duties obligations,
and agreements hereunder are in addition to (and not in limitation of) any
duties or obligations under common law or statute owed to the Company or the
other Talton Entities by the Executive by reason of his position as officer,
director or Executive, as applicable, of the Company or the other Talton
Entities.

          18.  INDEMNIFICATION.

          (a)  To the fullest extent permitted by law, the Company shall
indemnify the Executive against, and the Executive shall be entitled without
further act on his part to indemnify from the Company for, all expenses
("Expenses") (including the amount of judgments and the amount of reasonable
settlements made with a view to the curtailment of costs of litigation, other
than amounts paid to Company itself) reasonably incurred by him in connection
with or arising out of any action, suit or proceeding in which he may be
involved by reason of his being or having been a director or officer of the
Company and/or any other Talton Entity, whether or not he continues to be such
director or officer at the time of incurring such Expenses; provided, however,
that such indemnity shall not include any Expenses incurred by any such director
or officer in respect of such matters as to which he shall be finally adjudged
in any such action, suit or proceeding to have been derelict in the performance
of his duty as such director or officer; provided, further, that in no event
shall anything contained here be so construed as to protect, or to authorize the
Company to indemnify the Executive against any liability to the Company or to
its security holders to which he would otherwise be subject by reason of his
willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of his office as such director or officer.  The
foregoing right of indemnification shall inure to the benefit of the heirs,
executors or administrators of the Executive and shall be in addition to all
other rights to which such director or officer may be entitled as a matter of
law.

          (b)  Expenses incurred by the Executive shall be paid by the Company
in advance of the final disposition of any action, but only on condition that
such advances shall be repaid by the Executive if it is ultimately determined
that indemnification of such Expenses is not authorized under section (a) above.

          19.  COUNTERPARTS.  This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.

                                      7
<PAGE>
 
            IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
     
                          COMPANY:
                 
                           TALTON HOLDINGS, INC.,
                           a Delaware corporation
                        
                 
                           By:       /s/ TODD W. FOLLMER
                                  ----------------------
                           Name:       Todd W. Follmer
                           Title:      Chief Executive Officer
                 
                           Address:    8201 Tristar Drive
                           Irving, Texas 75063
                 
                           Telephone:  (972) 988-3737
                           Facsimile:  (972) 988-3774
                
                 
                           EXECUTIVE:
                 
                
                 
                           By:    /s/ DONALD B. VAELLO
                                  --------------------
                           Name:    DONALD B. VAELLO
                 
                           Address:    423 Arch Bluff
                           San Antonio, Texas  78216
                
                 
                           Telephone:  (210) 545-3344
                           Facsimile:  (210) 545=4658
                
                 
                  

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                                   EXHIBIT A
                                        


(a)  Base Salary:      $200,000 per year.


(b)  Bonus:            Bonus program to be established whereby Executive could
                       earn an additional amount up to 50% of Base Salary based
                       upon achieving performance objectives to be determined
                       and may be in excess of such amount in the event such
                       objectives are exceeded. In addition to the foregoing
                       bonus, the Executive will receive a special bonus for
                       1998 in the amount of $30,000 payable on or before
                       December 31, 1998.

(c)  Options:          Executive will be eligible to participate in the
                       Company's stock option program, and subject to Board
                       approval, will be awarded options to purchase the
                       equivalent of 200 common shares of Company stock, having
                       a strike price equal to the fair market value of the
                       Company's common stock on the date of issuance of the
                       options. Such options shall be subject to such vesting
                       requirements as are established by the Board.

                                       9