Document:

EMPLOYMENT AGREEMENT

                           DATED AS OF OCTOBER 1, 1999

                                     BETWEEN

                             VODAVI TECHNOLOGY, INC.

                                       AND

                                 WILLIAM J. HINZ
<PAGE>
                                TABLE OF CONTENTS

                                                                            PAGE
                                                                            ----
1. Employment................................................................. 1

2. Time Occupation............................................................ 1

3. Compensation and other Benefits............................................ 1

   (a) Base Salary............................................................ 1

   (b) Bonus.................................................................. 1

   (c) Reimbursement.......................................................... 1

   (d) Fringe Benefits........................................................ 2

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................................... 3

   (a) Interests to be Protected.............................................. 3

   (b) Non-Competition........................................................ 4

   (c) Non-Solicitation of Employees.......................................... 4

   (d) Confidential Information............................................... 4

   (e) Return of Books and Papers............................................. 5

   (f) Disclosure of Information.............................................. 5

   (g) Assignment............................................................. 5

   (h) Equitable Relief....................................................... 5

   (i) Restrictions Separable................................................. 5

   (j) Survival............................................................... 6

6. Miscellaneous.............................................................. 6

   (a) Notices................................................................ 6

   (b) Indulgences; Waivers................................................... 6

   (c) Controlling Law........................................................ 7

   (d) Binding Nature of Agreement; Successors and Assigns.................... 7

   (e) Execution in Counterparts.............................................. 7

   (f) Provisions Separable................................................... 7

                                      -i-
<PAGE>
                          TABLE OF CONTENTS (Continued)

   (g) Entire Agreement....................................................... 7

   (h) Paragraph Headings..................................................... 7

   (i) Number of Days......................................................... 8

                                      -ii-
<PAGE>
                              EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT  AGREEMENT  ("Agreement") is made as of October 1, 1999, to
be effective as of October 1, 1999 (the "Effective  Date") by and between VODAVI
TECHNOLOGY,  INC.,  a  Delaware  corporation  ("Employer")  and  WILLIAM J. HINZ
("Employee").

                                  WITNESSETH:

     Employer  desires to employ  Employee and  Employee  desires to accept such
employment, all on the terms and conditions hereinafter set forth.

     NOW,  THEREFORE,  in  consideration  of the  premises  and  of  the  mutual
covenants set forth in this Agreement, the parties hereto agree as follows:

     1.  EMPLOYMENT.  Employer  hereby  employs  Employee,  and Employee  hereby
accepts such employment,  as Chairman of the Board of Employer and in such other
executive  capacities and for such other executive  duties and services as shall
from time to time be mutually agreed upon by Employer and Employee.

     2. TIME OCCUPATION.  Employee shall devote such time, attention and efforts
to  the  performance  of  Employee's  duties  under  this  Agreement  as  deemed
necessary,  and shall serve Employer faithfully and diligently.  Notwithstanding
the foregoing,  Employer acknowledges and agrees that Employee currently holds a
full-time  position with another company and,  therefor,  Employee shall only be
obligated  to render  services to Employer  under this  Agreement on a part-time
basis.

     3. COMPENSATION AND OTHER BENEFITS.

          (a) BASE SALARY.  Employer shall pay to Employee,  as compensation for
the  services  rendered  by Employee  during  Employee's  employment  under this
Agreement,  a base  salary at a rate of $75,000  per annum (the "Base  Salary").
Employer shall pay the Base Salary in accordance with the Company's  established
payroll procedures.

          (b) BONUS. In addition to the Base Salary,  Employee shall be eligible
to receive annual bonus compensation (the "Bonus") in an amount to be set by the
Compensation  Committee of the Company's Board of Directors,  at the committee's
sole and exclusive discretion.

          (c)  REIMBURSEMENT.  Employer shall reimburse  Employee for all travel
and  entertainment  expenses and other ordinary and necessary  business expenses
incurred by Employee in connection  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  for  federal  income tax
purposes.  Reimbursements  shall  be made by  Employer  in  accordance  with the
Company's normal expense policies and procedures.
<PAGE>
          (d) FRINGE BENEFITS.  Employee shall be entitled to participate in any
group insurance, pension, retirement, vacation, expense reimbursement, and other
plans,  programs,  and  benefits  approved  by the Board of  Directors  and made
available from time to time to executive  employees of Employer generally during
the term of Employee's  employment  hereunder.  The foregoing shall not obligate
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 the Effective Date and shall continue until  September 30, 2001. The
term of Employee's employment hereunder shall automatically renew for successive
one-year  terms,  unless and until  terminated  by either party  giving  written
notice to the other not less than 30 days  prior to the end of the  then-current
term or as otherwise set forth in SECTION 4(b).

          (b) TERMINATION UNDER CERTAIN CIRCUMSTANCES.  Notwithstanding anything
to the contrary herein contained:

               (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 duties under this Agreement as the result of illness or
other incapacity, with or without reasonable accommodation, for a period of more
than 12 consecutive weeks, or for more than 12 weeks within any 12-month period,
as determined by Employer for purposes of compliance with the Family and Medical
Leave Act, Employer may, at its option,  and upon notice to Employee,  terminate
Employee's employment and this Agreement effective on the date of that notice;

               (iii)  UNILATERAL  DECISION  BY  EMPLOYER.  Employer  may, at its
option,  upon  notice to  Employee,  terminate  Employee's  employment  and this
Agreement effective on the date of that notice.

               (iv)  FAILURE  TO REMAIN A  DIRECTOR  OR  CHAIRMAN  OF THE BOARD.
Employer  may, at its option and upon notice to Employee,  terminate  Employee's
employment and this Agreement  effective on the date of that notice in the event
that Employee (i) resigns as Chairman of the Board or as a director of Employer,
(ii)  is  not  re-elected  to  Employer's   Board  of  Directors  by  Employer's
stockholders,  or (iii) is not  re-nominated  to the  position  of  Chairman  by
Employer's Board of Directors;

               (v) UNILATERAL DECISION BY EMPLOYEE. Employee may, at his option,
and upon notice to Employer,  terminate Employee's employment and this Agreement
effective on the date of that notice;

               (vi) 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  notice to  Employee,  if the
termination  of  Employee's  employment  is "for  cause."  For  purposes of this
SECTION 4(b)(vi), "for cause" shall

                                       2
<PAGE>
mean discharge  resulting from a determination by Employer that Employee (A) has
been convicted of a felony involving  dishonesty,  fraud, theft or embezzlement,
(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 would constitute a felony in any jurisdiction  involved,  (C)
has violated Employer's policies prohibiting sexual harassment or discrimination
or harassment or  discrimination  of any other  protected  basis under  federal,
state or local law, or (D) has willfully and  persistently  breached or violated
any of the provisions of this Agreement, and such breach or violation shall have
continued  for a period of 10 days after  Employer  shall  have  given  Employee
written notice specifying the nature thereof in reasonable detail; or

               (vii) CHANGE OF CONTROL.  In the event of a Change of Control (as
defined  below),  Employer or Employee  may, at their  respective  option,  upon
notice to the other,  terminate  Employee's  employment  by providing  the other
party with 30 days'  written  notice after the  effective  date of the Change of
Control. For the purposes of this Agreement,  the term "Change of Control" shall
mean the  approval by a majority of  Employer's  Board of  Directors  of (A) any
merger or consolidation in which Employer is not the surviving  entity,  (B) any
reverse  merger  in  which  the  Company  is the  surviving  entity,  or (C) any
transaction  involving the sale of all or substantially all of Employer's assets
to any  person  other  than a  wholly  or  majority  owned  direct  or  indirect
subsidiary of Employer.

          (c)  RESULT  OF  TERMINATION.  In  the  event  of the  termination  of
Employee's  employment  pursuant to SECTIONS  4(B)(I),  (IV), (V) or (VI) above,
Employee shall receive no further  compensation  under this Agreement and all of
Employee's unvested Options shall be cancelled.  In the event of the termination
of Employee's  employment pursuant to SECTION 4(B)(II) or (III) above,  Employee
shall continue to receive his base salary and benefits for the remaining term of
this  Agreement.  Such payments will be payable in one lump-sum amount within 10
days of the event of termination.

          (d) RESULT OF CHANGE OF CONTROL. As incentive for Employee to actively
pursue the best interests of Employer's  stockholders,  in the event of a Change
of Control (as that term is defined in SECTION 4(B)(VI) of this Agreement), then
(i) Employee  shall earn a minimum bonus of $50,000,  which shall be paid in one
lump sum payment  within ten business days from the effective date of the Change
of Control, and (ii) any options that were granted to Employee on April 22, 1999
that remain  unvested as of the  effective  date of the Change of Control  shall
become fully vested and exercisable as of such effective  date. In addition,  in
the event of the  termination  of  Employee's  employment  pursuant  to  SECTION
4(B)(VII)  above  Employee  shall receive the greater of (A) his base salary and
benefits  for the  remaining  period  of this  Agreement  or (B)  $75,000.  Such
payments  will be payable in one lump-sum  amount within 10 days of the event of
termination.

5.       COMPETITION AND CONFIDENTIAL INFORMATION.

          (a)  INTERESTS  TO BE  PROTECTED.  For purposes of this SECTION 5, the
term "Employer" shall include Vodavi  Technology,  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 essential services
for Employer during the term of

                                       3
<PAGE>
Employee's  employment  with Employer.  Employee will be exposed to, have access
to,  and  be  required  to  work  with a  considerable  amount  of  Confidential
Information  (as  defined  below).  The parties  also  expressly  recognize  and
acknowledge that the personnel of Employer have been trained by and are valuable
to Employer and that Employer will incur  substantial  expense in recruiting and
training  personnel if it must hire new personnel or retrain existing  personnel
to fill vacancies.  The parties also expressly recognize that it could seriously
impair  the  goodwill  and  diminish  the value of  Employer's  business  should
Employee compete with Employer in any manner whatsoever. The parties acknowledge
that this  covenant  has an  extended  duration;  however,  they agree that this
covenant is reasonable,  and it is necessary for the protection of Employer, its
stockholders,  and  employees.  For these and other  reasons,  and the fact that
there are many other  employment  opportunities  available  to  Employee  if his
employment  with  Employer is  terminated,  the parties are in full and complete
agreement that the following  restrictive  covenants are fair and reasonable and
are entered into freely, voluntarily, and knowingly. Furthermore, each party was
given the opportunity to consult with independent  legal counsel before entering
into this Agreement.

          (b)  NON-COMPETITION.  During the term of Employee's  employment  with
Employer and for the period ending 12 months after the termination of Employee's
employment with Employer,  regardless of the reason therefor, Employee shall not
(whether  directly  or  indirectly,  as owner,  principal,  agent,  stockholder,
director,  officer, manager,  employee,  partner,  participant,  or in any other
capacity) engage in or become financially interested in any competitive business
conducted  within the Restricted  Territory (as defined below).  As used herein,
the term "competitive business" shall mean any business that designs,  develops,
markets, or supports commercial telephone systems,  commercial grade telephones,
voice processing systems  (including,  but not limited to, automated  attendant,
voice  mail or fax mail,  or  interactive  voice  response),  computer-telephony
integration  products,  and related  computer  software  products;  and the term
"Restricted  Territory"  shall  mean  any area in which  Employer  conducts  its
business during Employee's employment hereunder.

          (c)  NON-SOLICITATION  OF  EMPLOYEES.  During  the term of  Employee's
employment  and for a period of 12 months after the  termination  of  Employee's
employment with Employer,  regardless of the reason therefor, Employee shall not
directly or indirectly,  for himself,  or on behalf of, or in conjunction  with,
any other person, company,  partnership,  corporation,  or other entity, seek to
hire or hire any of Employer's  personnel or employees 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 or trade secret information, whether patentable or not,
relating to the business of Employer (the "Confidential  Information")  obtained
by Employee in the course of  Employee's  employment,  and  Employee  shall not,
unless  first  authorized  in  writing  by  Employer,  disclose  to,  or use for
Employee's benefit or for the benefit of any person,  firm or entity at any time
either  during  or  subsequent  to  the  term  of  Employee's  employment,   any
Confidential  Information,  except as required in the  performance of Employee's
duties on behalf of Employer.  For  purposes  hereof,  Confidential  Information
shall  include  without  limitation  any  technical  plans and drawings or other
reproductions  or materials of any kind; any financial  information with respect
to Employer or its business; any trade secrets,  knowledge,  or information with

                                       4
<PAGE>
respect to products,  processes,  inventions,  formulae, software, source codes,
object codes,  algorithms,  and services  provided;  any  operating  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 or dealing with the purchasing, sales, advertising,  promotional, or
distribution policies or practices of Employer.

          (e) RETURN OF BOOKS AND PAPERS.  Upon the  termination  of  Employee's
employment  with Employer for any reason,  Employee  shall  deliver  promptly to
Employer all samples or demonstration models,  catalogues,  manuals,  memoranda,
drawings,  software,  source or object code, formulae,  and specifications,  and
operating procedures;  all cost, pricing, and other financial data; all supplier
and 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  Information  relating to the business of Employer,  which
Employee may then have in his possession whether prepared 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 of Employer,  whether  patentable  or not,
conceived  or made by Employee,  either  alone or jointly  with  others,  during
working  hours or otherwise,  during the entire period of Employee's  employment
with Employer, or within six months thereafter.

          (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 months thereafter, 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  and  all  applications,  assignments,  and  other
instruments  that Employer  shall deem  necessary or  appropriate  to apply for,
obtain,  or  maintain  Letters  Patent of the  United  States or of any  foreign
country, 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  is  established,  Employer  shall  be
entitled to preliminary and permanent  injunctive  relief as well as damages and
an equitable  accounting of all earnings,  profits,  and other benefits  arising
from such  violation,  which  right shall be  cumulative  and in addition to any
other rights or remedies to which  Employer  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 those provisions would remain in effect shall be
extended for a period of time equal to that period beginning when such violation
commenced and ending when the activities  constituting such violation shall have
been finally terminated in good faith.

          (i)  RESTRICTIONS  SEPARABLE.  If the scope of any  provision  of this
SECTION 5 is found by a Court to be too broad to permit  enforcement to its full
extent, then such provision shall be enforced to the maximum extent permitted by
law. The parties  agree that the scope of any provision of 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 every
restriction  set forth in this SECTION 5 is  independent  and severable from the

                                       5
<PAGE>
others, and no such restriction shall be rendered unenforceable by virtue of the
fact that, for any reason,  any other 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 set forth in this SECTION 5 shall survive the termination
of this Agreement and Employee's employment by either Employer or Employee under
SECTION 4 of this Agreement.

6.       MISCELLANEOUS.

          (a) NOTICES. All notices, requests,  demands, and other communications
required  or  permitted  under this  Agreement  shall be in writing and shall be
deemed to have been duly given,  made and received (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 receipt  requested,  postage  prepaid and addressed as provided below, or
(iv)  if  by a  courier  delivery  service  providing  overnight  or  "next-day"
delivery,  on the next business day after deposit with such service addressed as
follows:

                          (1)  If to Employer:

                               Vodavi Technology, Inc.
                               8300 East Raintree Drive
                               Scottsdale, Arizona  85260
                               Attention:  President

                               with a copy given in the manner
                               prescribed above, to:

                               Greenberg Traurig
                               One East Camelback Road
                               Phoenix, Arizona  85012
                               Attention:  Robert S. Kant, Esq.

                          (2)  If to Employee:

                               William J. Hinz
                               11869 E. Gold Dust Avenue
                               Scottsdale, Arizona  85259

Either party may alter the address to which  communications  or copies are to be
sent by  giving  notice  of such  change  of  address  in  conformity  with  the
provisions of this paragraph for the giving of notice.

          (b)  INDULGENCES;  WAIVERS.  Neither  any failure nor any delay on the
part of either party to exercise any right,  remedy,  power,  or privilege under
this  Agreement  shall  operate  as a waiver  thereof,  nor shall any  single or
partial exercise of any right, remedy, power, or privilege preclude any other or
further exercise of the same or of any other right, remedy,

                                       6
<PAGE>
power,  or  privilege,  nor shall any waiver of any  right,  remedy,  power,  or
privilege with respect to any occurrence be construed as a waiver of such right,
remedy,  power,  or privilege  with respect to any other  occurrence.  No waiver
shall be binding unless executed in writing by the party making the waiver.

          (c) CONTROLLING LAW. This Agreement and all questions  relating to its
validity, interpretation,  performance and enforcement, shall be governed by and
construed in accordance  with the laws of the state of Arizona,  notwithstanding
any Arizona or other conflict-of-interest provisions to the contrary.

          (d)  BINDING  NATURE  OF  AGREEMENT;   SUCCESSORS  AND  ASSIGNS.  This
Agreement  shall be binding upon and inure to the benefit of the parties  hereto
and their respective heirs, personal representatives,  successors,  and assigns;
provided  that  because  the  obligations  of  Employee  hereunder  involve  the
performance of personal  services,  such  obligations  shall not be delegated by
Employee. For purposes of this Agreement,  successors and assigns shall include,
but not be limited to, any individual, corporation, trust, partnership, or other
entity  that  acquires a majority  of the stock or assets of  Employer  by sale,
merger,  consolidation,  liquidation,  or other form of transfer.  Employer will
require  any  successor  (whether  direct  or  indirect,  by  purchase,  merger,
consolidation or otherwise) to all or  substantially  all of the business and/or
assets of Employer to expressly  assume and agree to perform  this  Agreement in
the same  manner and to the same  extent  that  Employer  would be  required  to
perform it if no such succession had taken place.

          (e) EXECUTION IN  COUNTERPARTS.  This Agreement may be executed in any
number of  counterparts,  each of which  shall be deemed  to be an  original  as
against  any party  whose  signature  appears  thereon,  and all of which  shall
together  constitute one and the same  instrument.  This Agreement  shall become
binding when one or more  counterparts  hereof,  individually or taken together,
shall bear the signatures of the parties reflected hereon as the signatories.

          (f)  PROVISIONS  SEPARABLE.  The  provisions  of  this  Agreement  are
independent of and separable from each other, and no provision shall be affected
or rendered  invalid or  unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.

          (g) ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding  between the parties  hereto  with  respect to the subject  matter
hereof   and   supersedes   all  prior  and   contemporaneous   agreements   and
understandings, inducements and conditions, express or implied, oral or written,
except as herein  contained.  The express terms hereof control and supersede any
course of  performance  and/or usage of the trade  inconsistent  with any of the
terms  hereof.  This  Agreement  may not be modified or amended other than by an
agreement in writing.

          (h) PARAGRAPH  HEADINGS.  The paragraph headings in this Agreement are
for  convenience  only; they form no part of this Agreement and shall not affect
its interpretation.

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<PAGE>
          (i) NUMBER OF DAYS.  In  computing  the number of days for purposes of
this  Agreement,  all days shall be counted,  including  Saturdays,  Sundays and
holidays; provided, however, that if the final day of any time period falls on a
Saturday,  Sunday or holiday,  then the final day shall be deemed to be the next
day that is not a Saturday, Sunday or holiday.

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                        VODAVI TECHNOLOGY, INC.

                                        By: /s/ Gregory K. Roeper
                                        ----------------------------------------
                                        Its: President

                                        EMPLOYEE

                                        /s/ William J. Hinz
                                        ----------------------------------------
                                        William J. HinzEMPLOYMENT AGREEMENT

                           DATED AS OF OCTOBER 1, 1999

                                     BETWEEN

                             VODAVI TECHNOLOGY, INC.

                                       AND

                                GREGORY K. ROEPER
<PAGE>
                                TABLE OF CONTENTS
                                                                            PAGE
                                                                            ----
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................................... 3

   (a) Interests to be Protected.............................................. 3

   (b) Non-Competition........................................................ 4

   (c) Non-Solicitation of Employees.......................................... 4

   (d) Confidential Information............................................... 4

   (e) Return of Books and Papers............................................. 5

   (f) Disclosure of Information.............................................. 5

   (g) Assignment............................................................. 5

   (h) Equitable Relief....................................................... 5

   (i) Restrictions Separable................................................. 5

   (j) Survival............................................................... 5

6. Miscellaneous.............................................................. 6

   (a) Notices................................................................ 6

   (b) Indulgences; Waivers................................................... 6

   (c) Controlling Law........................................................ 7

   (d) Binding Nature of Agreement; Successors and Assigns.................... 7

   (e) Execution in Counterparts.............................................. 7

   (f) Provisions Separable................................................... 7

                                      -i-
<PAGE>
                          TABLE OF CONTENTS (Continued)

   (g) Entire Agreement....................................................... 7

   (h) Paragraph Headings..................................................... 7

   (i) Number of Days......................................................... 7

                                      -ii-
<PAGE>
                              EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT  AGREEMENT  ("Agreement") is made as of October 1, 1999, to
be effective as of October 1, 1999 (the "Effective  Date") by and between VODAVI
TECHNOLOGY,  INC.,  a Delaware  corporation  ("Employer")  and GREGORY K. ROEPER
("Employee").

                                  WITNESSETH:

     Employer  desires to employ  Employee and  Employee  desires to accept such
employment, all on the terms and conditions hereinafter set forth.

     NOW,  THEREFORE,  in  consideration  of the  premises  and  of  the  mutual
covenants set forth in this Agreement, the parties hereto agree as follows:

     1.  EMPLOYMENT.  Employer  hereby  employs  Employee,  and Employee  hereby
accepts such  employment,  as President and Chief Operating  Officer of Employer
and in such other executive  capacities and for such other executive  duties and
services  as shall from time to time be mutually  agreed  upon by  Employer  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  Employer  faithfully  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 by Employee during Employee's employment under this Agreement,
a base  salary at a rate of  $148,500  per annum (the "Base  Salary").  Employer
shall pay the Base Salary in accordance with the Company's  established  payroll
procedures.

          (b) BONUS. In addition to the Base Salary,  Employee shall be eligible
to receive annual bonus compensation (the "Bonus") in an amount to be set by the
Compensation  Committee of the Company's Board of Directors,  at the committee's
sole and exclusive discretion.

          (c)  REIMBURSEMENT.  Employer shall reimburse  Employee for all travel
and  entertainment  expenses and other ordinary and necessary  business expenses
incurred by Employee in connection  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  for  federal  income tax
purposes.  Reimbursements  shall  be made by  Employer  in  accordance  with the
Company'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  benefits  approved  by the Board of  Directors  and made
available from time to time

<PAGE>
to  executive  employees  of Employer  generally  during the term of  Employee's
employment  hereunder.  The  foregoing  shall not obligate  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 the Effective Date and shall continue until  September 30, 2001. The
term of Employee's employment hereunder shall automatically renew for successive
one-year  terms,  unless and until  terminated  by either party  giving  written
notice to the other not less than 30 days  prior to the end of the  then-current
term or as otherwise set forth in SECTION 4(B).

          (b) TERMINATION UNDER CERTAIN CIRCUMSTANCES.  Notwithstanding anything
to the contrary herein contained:

               (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 duties under this Agreement as the result of illness or
other incapacity, with or without reasonable accommodation, for a period of more
than 12 consecutive weeks, or for more than 12 weeks within any 12-month period,
as determined by Employer for purposes of compliance with the Family and Medical
Leave Act, Employer may, at its option,  and upon notice to Employee,  terminate
Employee's employment 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.  A  reduction  in  Employees
responsibilities,  as such  responsibilities  are described in SECTION 1 of this
Agreement,  by  Employer  shall  constitute  a  termination  under this  SECTION
4(B)(III).

               (iv) UNILATERAL DECISION BY EMPLOYEE. Employee may, at his option
and upon notice to Employer,  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  notice to  Employee,  if the
termination  of  Employee's  employment  is "for  cause."  For  purposes of this
SECTION 4(b)(v), "for cause" shall mean discharge resulting from a determination
by  Employer  that  Employee  (A)  has  been  convicted  of a  felony  involving
dishonesty, fraud, theft or embezzlement,  (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 would  constitute a
felony  in any  jurisdiction  involved,  (C) has  violated  Employer's  policies
prohibiting  sexual harassment or discrimination or harassment or discrimination
of any other  protected  basis  under  federal,  state or local law,  or (D) has
willfully and  persistently  breached or violated any of the  provisions of this
Agreement,  and such breach or violation shall have continued for a period of 10
days after

                                       2
<PAGE>
Employer shall have given Employee written notice  specifying the nature thereof
in reasonable detail.

               (vi) CHANGE OF  CONTROL.  In the event of a Change of Control (as
defined  below),  Employer or Employee  may, at their  respective  option,  upon
notice to the other,  terminate  Employee's  employment  by providing  the other
party with 30 days'  written  notice after the  effective  date of the Change of
Control. For the purposes of this Agreement,  the term "Change of Control" shall
mean the  approval by a majority of  Employer's  Board of  Directors  of (A) any
merger or consolidation in which Employer is not the surviving  entity,  (B) any
reverse  merger  in  which  the  Company  is the  surviving  entity,  or (C) any
transaction  involving the sale of all or substantially all of Employer's assets
to any  person  other  than a  wholly  or  majority  owned  direct  or  indirect
subsidiary of Employer.

          (c)  RESULT  OF  TERMINATION.  In  the  event  of the  termination  of
Employee's  employment pursuant to SECTIONS 4(B)(I) (IV) or (V) above,  Employee
shall receive no further compensation under this Agreement and all of Employee's
unvested  Options  shall  be  cancelled.  In the  event  of the  termination  of
Employee's  employment  pursuant to SECTION  4(B)(II) or (III)  above,  Employee
shall continue to receive his base salary and benefits for the remaining term of
this  Agreement.  Such payments will be payable in one lump-sum amount within 10
days of the event of termination.

          (d) RESULT OF CHANGE OF CONTROL. As incentive for Employee to actively
pursue the best interests of Employer's  stockholders,  in the event of a Change
of Control (as that term is defined in SECTION 4(B)(VI) of this Agreement), then
(i) Employee shall earn a minimum bonus of $100,000,  which shall be paid in one
lump sum payment  within ten business days from the effective date of the Change
of Control in the event of a Change of Control,  and (ii) any options  that were
granted to Employee on April 22, 1999 that remain  unvested as of the  effective
date of the Change of Control  shall become fully vested and  exercisable  as of
such effective date. In addition,  in the event of the termination of Employee's
employment pursuant to SECTION 4(B)(VI) above Employee shall continue to receive
the greater of (A) his base salary and benefits for the remaining period of this
Agreement or (B) $148,500.  Such payments will be payable in one lump-sum amount
within 10 days of the event of termination.

     5. COMPETITION AND CONFIDENTIAL INFORMATION.

          (a)  INTERESTS  TO BE  PROTECTED.  For purposes of this SECTION 5, the
term "Employer" shall include Vodavi  Technology,  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 essential services
for Employer during the term of Employee's  employment  with Employer.  Employee
will be exposed to, have access to, and be required to work with a  considerable
amount  of  Confidential  Information  (as  defined  below).  The  parties  also
expressly  recognize  and  acknowledge  that the personnel of Employer have been
trained by and are valuable to Employer and that Employer will incur substantial
expense in  recruiting  and training  personnel if it must hire new personnel or
retrain  existing  personnel  to fill  vacancies.  The  parties  also  expressly
recognize that it could seriously  impair the goodwill and diminish the value of
Employer's  business  should  Employee  compete  with  Employer  in  any  manner
whatsoever. The parties acknowledge that this covenant has an extended duration;

                                       3
<PAGE>
however,  they agree that this covenant is  reasonable,  and it is necessary for
the protection of Employer, its stockholders, and employees. For these and other
reasons,  and the fact  that  there  are  many  other  employment  opportunities
available to Employee if his employment with Employer is terminated, the parties
are in full and complete agreement that the following  restrictive covenants are
fair and  reasonable  and are entered into freely,  voluntarily,  and knowingly.
Furthermore,  each party was given the  opportunity to consult with  independent
legal counsel before entering into this Agreement.

          (b)  NON-COMPETITION.  During the term of Employee's  employment  with
Employer and for the period ending 12 months after the termination of Employee's
employment with Employer,  regardless of the reason therefor, Employee shall not
(whether  directly  or  indirectly,  as owner,  principal,  agent,  stockholder,
director,  officer, manager,  employee,  partner,  participant,  or in any other
capacity) engage in or become financially interested in any competitive business
conducted  within the Restricted  Territory (as defined below).  As used herein,
the term "competitive business" shall mean any business that designs,  develops,
markets, or supports commercial telephone systems,  commercial grade telephones,
voice processing systems  (including,  but not limited to, automated  attendant,
voice  mail or fax mail,  or  interactive  voice  response),  computer-telephony
integration  products,  and related  computer  software  products;  and the term
"Restricted  Territory"  shall  mean  any area in which  Employer  conducts  its
business during Employee's employment hereunder.

          (c)  NON-SOLICITATION  OF  EMPLOYEES.  During  the term of  Employee's
employment  and for a period of 12 months after the  termination  of  Employee's
employment with Employer,  regardless of the reason therefor, Employee shall not
directly or indirectly,  for himself,  or on behalf of, or in conjunction  with,
any other person, company,  partnership,  corporation,  or other entity, seek to
hire or hire any of Employer's personnel or employees, with the exception of his
Executive Assistant,  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 or trade secret information, whether patentable or not,
relating to the business of Employer (the "Confidential  Information")  obtained
by Employee in the course of  Employee's  employment,  and  Employee  shall not,
unless  first  authorized  in  writing  by  Employer,  disclose  to,  or use for
Employee's benefit or for the benefit of any person,  firm or entity at any time
either  during  or  subsequent  to  the  term  of  Employee's  employment,   any
Confidential  Information,  except as required in the  performance of Employee's
duties on behalf of Employer.  For  purposes  hereof,  Confidential  Information
shall  include  without  limitation  any  technical  plans and drawings or other
reproductions  or materials of any kind; any financial  information with respect
to Employer or its business; any trade secrets,  knowledge,  or information with
respect to products,  processes,  inventions,  formulae, software, source codes,
object codes,  algorithms,  and services  provided;  any  operating  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 or dealing with the purchasing, sales, advertising,  promotional, or
distribution policies or practices of Employer.

                                       4
<PAGE>
          (e) RETURN OF BOOKS AND PAPERS.  Upon the  termination  of  Employee's
employment  with Employer for any reason,  Employee  shall  deliver  promptly to
Employer all samples or demonstration models,  catalogues,  manuals,  memoranda,
drawings,  software,  source or object code, formulae,  and specifications,  and
operating procedures;  all cost, pricing, and other financial data; all supplier
and 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  Information  relating to the business of Employer,  which
Employee may then have in his possession whether prepared 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 of Employer,  whether  patentable  or not,
conceived  or made by Employee,  either  alone or jointly  with  others,  during
working  hours or otherwise,  during the entire period of Employee's  employment
with Employer, or within six months thereafter.

          (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 months thereafter, 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  and  all  applications,  assignments,  and  other
instruments  that Employer  shall deem  necessary or  appropriate  to apply for,
obtain,  or  maintain  Letters  Patent of the  United  States or of any  foreign
country, 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  is  established,  Employer  shall  be
entitled to preliminary and permanent  injunctive  relief as well as damages and
an equitable  accounting of all earnings,  profits,  and other benefits  arising
from such  violation,  which  right shall be  cumulative  and in addition to any
other rights or remedies to which  Employer  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 those provisions would remain in effect shall be
extended for a period of time equal to that period beginning when such violation
commenced and ending when the activities  constituting such violation shall have
been finally terminated in good faith.

          (i)  RESTRICTIONS  SEPARABLE.  If the scope of any  provision  of this
SECTION 5 is found by a Court to be too broad to permit  enforcement to its full
extent, then such provision shall be enforced to the maximum extent permitted by
law. The parties  agree that the scope of any provision of 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 every
restriction  set forth in this SECTION 5 is  independent  and severable from the
others, and no such restriction shall be rendered unenforceable by virtue of the
fact that, for any reason,  any other 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 set forth in this SECTION 5 shall survive the termination
of this

                                       5
<PAGE>
Agreement and Employee's employment by either Employer or Employee under SECTION
4 of this Agreement.

     6. MISCELLANEOUS.

          (a) NOTICES. All notices, requests,  demands, and other communications
required  or  permitted  under this  Agreement  shall be in writing and shall be
deemed to have been duly given, made, and received (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 receipt  requested,  postage  prepaid and addressed as provided below, or
(iv)  if  by a  courier  delivery  service  providing  overnight  or  "next-day"
delivery,  on the next business day after deposit with such service addressed as
follows:

                    (1)     If to Employer:

                            Vodavi Technology, Inc.
                            8300 East Raintree Drive
                            Scottsdale, Arizona 85260
                            Attention:  Chairman of the Board

                            with a copy given in the manner
                            prescribed above, to:

                            Greenberg Traurig
                            One East Camelback Road
                            Phoenix, Arizona 85012
                            Attention:  Robert S. Kant, Esq.

                    (2)     If to Employee:

                            Gregory K. Roeper
                            8300 East Raintree Drive
                            Scottsdale, Arizona 85260

Either party may alter the address to which  communications  or copies are to be
sent by  giving  notice  of such  change  of  address  in  conformity  with  the
provisions of this paragraph for the giving of notice.

          (b)  INDULGENCES;  WAIVERS.  Neither  any failure nor any delay on the
part of either party to exercise any right,  remedy,  power,  or privilege under
this  Agreement  shall  operate  as a waiver  thereof,  nor shall any  single or
partial exercise of any right, remedy, power, or privilege preclude any other or
further exercise of the same or of any other right, remedy, power, or privilege,
nor shall any waiver of any right,  remedy,  power, or privilege with respect to
any  occurrence  be  construed  as a waiver of such  right,  remedy,  power,  or
privilege  with  respect  to any other  occurrence.  No waiver  shall be binding
unless executed in writing by the party making the waiver.

                                       6
<PAGE>
          (c) CONTROLLING LAW. This Agreement and all questions  relating to its
validity, interpretation,  performance and enforcement, shall be governed by and
construed in accordance  with the laws of the state of Arizona,  notwithstanding
any Arizona or other conflict-of-interest provisions to the contrary.

          (d)  BINDING  NATURE  OF  AGREEMENT;   SUCCESSORS  AND  ASSIGNS.  This
Agreement  shall be binding upon and inure to the benefit of the parties  hereto
and their respective heirs, personal representatives,  successors,  and assigns;
provided  that  because  the  obligations  of  Employee  hereunder  involve  the
performance of personal  services,  such  obligations  shall not be delegated by
Employee. For purposes of this Agreement,  successors and assigns shall include,
but not be limited to, any individual, corporation, trust, partnership, or other
entity  that  acquires a majority  of the stock or assets of  Employer  by sale,
merger,  consolidation,  liquidation,  or other form of transfer.  Employer will
require  any  successor  (whether  direct  or  indirect,  by  purchase,  merger,
consolidation or otherwise) to all or  substantially  all of the business and/or
assets of Employer to expressly  assume and agree to perform  this  Agreement in
the same  manner and to the same  extent  that  Employer  would be  required  to
perform it if no such succession had taken place.

          (e) EXECUTION IN  COUNTERPARTS.  This Agreement may be executed in any
number of  counterparts,  each of which  shall be deemed  to be an  original  as
against  any party  whose  signature  appears  thereon,  and all of which  shall
together  constitute one and the same  instrument.  This Agreement  shall become
binding when one or more  counterparts  hereof,  individually or taken together,
shall bear the signatures of the parties reflected hereon as the signatories.

          (f)  PROVISIONS  SEPARABLE.  The  provisions  of  this  Agreement  are
independent of and separable from each other, and no provision shall be affected
or rendered  invalid or  unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.

          (g) ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding  between the parties  hereto  with  respect to the subject  matter
hereof   and   supersedes   all  prior  and   contemporaneous   agreements   and
understandings, inducements and conditions, express or implied, oral or written,
except as herein  contained.  The express terms hereof control and supersede any
course of  performance  and/or usage of the trade  inconsistent  with any of the
terms  hereof.  This  Agreement  may not be modified or amended other than by an
agreement in writing.

          (h) PARAGRAPH  HEADINGS.  The paragraph headings in this Agreement are
for  convenience  only; they form no part of this Agreement and shall not affect
its interpretation.

          (i) NUMBER OF DAYS.  In  computing  the number of days for purposes of
this  Agreement,  all days shall be counted,  including  Saturdays,  Sundays and
holidays; provided, however, that if the final day of any time period falls on a
Saturday,  Sunday or holiday,  then the final day shall be deemed to be the next
day that is not a Saturday, Sunday or holiday.

                                       7
<PAGE>
     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

                                        VODAVI TECHNOLOGY, INC.

                                        By: /s/ William Hinz
                                        ----------------------------------------
                                        Its: Chairman of the Board

                                        EMPLOYEE

                                        /s/ Gregory K. Roeper
                                        ----------------------------------------
                                        Gregory K. Roeper

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