AMENDED EMPLOYMENT AGREEMENT

 

                          AMENDED EMPLOYMENT AGREEMENT

                          ----------------------------

 

      AMENDED EMPLOYMENT   AGREEMENT (this "Agreement"),   dated as of the 1st day

of June, 2005 ("Effective Date"), by and among Encompass Group Affiliates, Inc.,

a Delaware corporation ("Encompass"), Advanced Communication Technologies, Inc.,

a Florida Corporation   ("ACT"),   and Martin Nielson, an individual whose address

is 12111 Hilltop Drive,   Los Altos Hills, CA   ("Executive").   Encompass and ACT,

together with any and all of their respective subsidiaries, shall be referred to

collectively   herein as the "Company." This Amended Employment   Agreement amends

and replaces the Employment Agreement   ("Original   Agreement") between Executive

and the Company dated as of June 24, 2004 ("Original Effective Date").

 

                                   WITNESSETH

 

 

      WHEREAS,   on December 30, 2004, ACT acquired a majority of the outstanding

common stock of Pacific Magtron International Corp. ("PMIC").

 

      NOW,   THEREFORE,   in   consideration   of the mutual   covenants and promises

herein   contained,   and other good and valuable   consideration,   the receipt and

sufficiency   of which are   hereby   acknowledged,   the   parties   hereto   agree as

follows:

 

       1. Employment.

 

            (a)   Encompass   hereby   employs   Executive,   and   Executive   accepts

employment with Encompass,   as Chief Executive Officer,   or such other executive

position with similar   responsibilities   and duties of a chief executive officer

of a company.

 

            (b) ACT hereby   employs   Executive,   and   Executive   hereby   accepts

employment with ACT, as Senior Vice President,   or such other executive position

with similar responsibilities and duties of a senior vice president of a company

as may be determined by the Board of Directors of ACT (the "Board") from time to

time during the Employment Period (as defined below).

 

            (c) Executive is currently a member of the Board.

 

            (d) In addition   to his duties set forth in this   Paragraph 1 and in

Paragraph   3 below,   Executive   shall at the   request of the ACT CEO (as defined

below) or the Board   serve as an   officer   or   director   of   subsidiary   of ACT,

without   additional   compensation   and subject to any policy of the Compensation

Committee of the Board (the "Compensation   Committee") with regard to directors'

fees.

 

      2. Term.   The initial   term of this   Agreement   commenced   on the Original

Effective Date and will expire on the second   anniversary   thereof (the "Initial

Employment   Period"),   unless earlier   terminated in accordance   with its terms;

provided,   however,   that the   Company   shall have the option of   retaining   the

services   of   Executive,   on the   terms   set   forth   in this   Agreement,   for an

additional   one-year   period by providing   Executive with written notice thereof

not less than thirty (30) days prior to the expiration of the Initial Employment

Period (the "Option Period" and together with the Initial Employment Period, the

"Employment   Period").   Unless earlier terminated in accordance   herewith,   upon

expiration of the Option   Period,   this   Agreement   shall be deemed to have been

extended for additional   terms of successive one year periods   commencing on the

day after the expiration of the then current Employment Period.

 

 

<PAGE>

 

      3. Employment and Duties.

 

            3.1 Duties and Responsibilities.

 

            (a) Executive's area of responsibility   during the Employment Period

shall be that of Chief Executive   Officer of Encompass and such senior executive

position of ACT to which the Board might appoint him.   Executive   shall directly

report to the Chief   Executive   Officer   of ACT (the "ACT   CEO"),   or such other

senior executive officer of ACT, as determined from time to time by the Company.

The   services to be   rendered by   Executive   pursuant   to this   Agreement   shall

consist of such services as defined and directed by the Board or the ACT CEO.

 

            (b) During the Employment Period,   Executive shall serve the Company

faithfully and to the best of his ability; shall devote his entire working time,

attention,   energy and skill to his   employment   and the benefit and business of

the Company;   and shall use his best efforts,   skills and ability to promote its

interests   and to   perform   such   duties as from time to time may be   reasonably

assigned   to him and are   consistent   with his   titles   and   positions   with the

Company.

 

            (c) During the Employment Period, in addition to any other duties or

responsibilities the Company gives to Executive,   Executive shall be required to

sign, and shall sign, all certifications and such other documents or instruments

required of an executive of a public   company or otherwise by (i) the Securities

and Exchange Commission, (ii) any exchange or association on which the Company's

shares of capital stock are listed, (iii) any federal, state or local authority,

(iv) any other governmental,   quasi-governmental   or non-governmental   entity or

organization   (foreign or domestic)   that   regulates or has   authority   over the

Company, and/or (v) the Company in connection with any of the foregoing.

 

            3.2 Observance of Rules and Regulations. Executive agrees to observe

and comply with all applicable   laws and   regulations,   as well as the rules and

regulations of the Company, with respect to the performance of his duties.

 

            3.3 Resignation   from Other   Positions.   Executive has resigned from

any and all other positions he may hold as an officer or director with any other

company prior to the Original Effective Date, other than the Company;   provided,

however,   that   notwithstanding   the foregoing,   Executive shall be permitted to

remain as (i) an outside director,   but not as Chairman,   of Hy-Tech   Technology

Group,   Inc. and Emerging Delta Corp., and (ii) Chairman of Altos Bancorp,   Inc.

("Altos")   for so long as Altos   remains a privately   held   company   that is not

required to file periodic and other   reports   pursuant to Section 13(a) or 15(d)

of the Securities Exchange Act of 1934, as amended.

 

 

                                       2

<PAGE>

 

      4. Compensation; Benefits and Expenses.

 

            4.1 Acquisition Bonuses.

 

            (a)   Upon   execution   of the   Original   Agreement,   ACT   granted   to

Executive,   and Executive shall receive,   50,000,000   shares of ACT's restricted

common   stock,   priced at $.01 per share,   of which (i)   12,500,000   shares will

fully vest on July 1, 2005, and (ii)   37,500,000   shares will fully vest on July

1, 2006 (together, the "ACT Shares"); provided, as to each vesting traunch, that

Executive is then employed by the Company;   and provided further that the number

of ACT Shares shall be adjusted   accordingly   for stock   splits,   reverse   stock

splits   and   other   recapitalizations    effected   by   ACT.   Notwithstanding   the

foregoing, in the event Executive's employment with the Company is terminated by

the Company   without   "cause" prior to the expiration of the Initial   Employment

Period, a pro-rata amount of otherwise unvested ACT Shares,   based on the number

of days elapsed during the applicable fiscal year, shall become fully vested and

payable by the Company.

 

            (b) Within   five (5)   business   days after the   consummation   of the

transaction   contemplated by that certain Agreement,   dated May 27, 2004, by and

among Encompass and HYTT, Encompass paid to Executive $15,000 in cash.

 

            (c) Within   five (5)   business   days after the later to occur of (i)

the   consummation of the   acquisition of a majority of the outstanding   stock of

Pacific   Magtron   International   Corp.,   Encompass paid to Executive   $15,000 in

cash.

 

            4.2 Base Salary.

 

            (a) As   compensation   for the   services   to be   rendered   hereunder,

during agreement year ending on June 23, 2005,   Encompass shall pay to Executive

an annual base salary (the "Base Salary") of $225,000; during the agreement year

ending June 23, 2006,   the Base Salary shall be $175,000;   and during the Option

Period,   the Base Salary shall be $200,000.   The Base Salary shall be payable in

accordance with usual payroll practices of the Company.

 

            (b) The Base Salary   payable by   Encompass   for any period   shall be

reduced by any cash   compensation   for such period paid to Executive by PMIC (or

its   subsidiaries)   or any other   indirect or direct   majority   or wholly   owned

subsidiary of Encompass or ACT.

 

            4.3 Bonus.

 

            (a) For each   fiscal   year or   portion   thereof   after the   Original

Effective   Date and during   the   Employment   Period,   the   Company   shall pay to

Executive an annual   performance   bonus, in cash and/or restricted stock of ACT,

in an amount   determined at the sole discretion of the   Compensation   Committee,

taking into account Executive's   contribution to ACT's consolidated net earnings

and   stock   appreciation   during   such   fiscal   year (the   "Overall   Performance

Bonus").

 

            (b)   Immediately   following   each fiscal year,   Encompass   shall set

aside for the payment of Encompass   executive   bonuses,   an amount equal to five

percent (5%) of net income of Encompass   during such fiscal year (the "Encompass

Bonus Pool").   For each fiscal year or portion   thereof after the Effective Date

and during the Employment   Period,   the Company shall pay to Executive an annual

performance bonus, in cash and/or restricted stock of ACT, equal to a portion of

the Encompass Bonus Pool, as determined by the   Compensation   Committee,   in its

sole   discretion (the   "Encompass   Performance   Bonus" and together with the ACT

Performance Bonus, the "Performance Bonuses").   The Performance Bonuses shall be

paid by Encompass to the extent payable in cash and by ACT to the extent payable

in stock.

 

 

                                       3

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For purposes hereof, "net income" shall mean, with respect to Encompass, for any

fiscal year, the net income (loss) of Encompass for such fiscal year, determined

on a consolidated basis   (consolidated   basis shall include Encompass and all of

its wholly-owned   subsidiaries) in accordance with generally accepted accounting

principals,   consistently   applied;   provided,   however,   that   there   shall   be

excluded   from net   income   (a) the net   income   (loss)   of any   person in which

Encompass has a joint interest with a third party, except to the extent such net

income is actually   paid to Encompass by dividend or other   distribution   during

such fiscal year,   (b) the net income (or loss) of any person   accrued   prior to

the date it   becomes a   subsidiary   of   Encompass   or is merged   into or becomes

consolidated   with   Encompass or its assets are purchased by Encompass,   and (c)

the net income (if   positive) of any   subsidiary of Encompass to the extent that

the   declaration   or payment of dividends or similar   distributions   of such net

income by such   subsidiary (i) is not at that time permitted by operation of the

terms of its   charter or any   agreement,   instrument,   judgment,   decree,   order

statute,   rule or governmental   regulation or (ii) would be subject to any taxes

payable on such dividends or distributions.

 

            (c) In addition to the   Performance   Bonuses,   the Company may grant

restricted   shares of common stock of ACT to Executive,   with a vesting schedule

and   other   terms   established   by   the   Compensation   Committee,   in   its   sole

discretion (the "Incentive Bonus").

 

            (d)   Executive   acknowledges   that   the   amount   of the   Performance

Bonuses and the amount of the   Incentive   Bonus shall at all times be determined

by the Compensation   Committee,   in its sole   discretion.   The Company shall pay

each of the   Performance   Bonuses and the   Incentive   Bonus to Executive   within

thirty (30) days after the Company's   audited results for the applicable   fiscal

year are delivered to the Company,   but in no event later than October 15 of the

immediately following fiscal year.

 

            4.4 Life Insurance.

 

            (a)   During   the   Employment    Period,   the   Company   shall   provide

Executive   with term life   insurance   with a death benefit equal to   $1,000,000,

provided that   Executive is   insurable.   The Company shall pay all premiums with

respect to such life   insurance.   Such life   insurance   may be   provided   either

through the Company's group life insurance programs, by an individual policy, or

by a combination of both group and individual   policies.   Executive shall at all

times designate the beneficiary(ies) of such life insurance.

 

            (b) In addition to Section 4(a) above,   the Company   shall   maintain

"key man" life   insurance on the life of Executive with a death benefit equal to

$2,000,000.   The   Company   shall   pay all   premiums   with   respect   to such life

insurance. The Company shall at all times designate the beneficiary(ies) of such

"key man" life insurance.

 

 

                                        4

<PAGE>

 

            4.5 Other Benefits.   Executive shall also be eligible to participate

in any life and health   insurance   programs that the Company makes   available to

all of its executives of similar seniority.   Executive shall also be eligible to

receive   discretionary   performance   based bonuses as approved and authorized by

the Compensation   Committee,   including any incentive stock programs approved by

ACT's shareholders.

 

            4.6 Business Expenses.   Executive will be reimbursed,   in accordance

with the Company's expense reimbursement policy, for business expenses that have

been   pre-approved by the Board or the ACT CEO upon   presentation of vouchers or

other documents   reasonably necessary to verify the expenditures and sufficient,

in form and substance, to satisfy Internal Revenue Service requirements for such

expenses.

 

            4.7   Vacation.   Executive   shall be   entitled to take up to four (4)

weeks of vacation per calendar year, which shall be taken in accordance with the

Company's   vacation   policy   in   effect   from   time to time   for   executives   of

comparable seniority.

 

      5. No Competitive Activities; Confidentiality; Invention

 

            5.1   General   Restriction.   During the   Employment   Period and for a

period   of   two   (2)   years   thereafter   (the   "Restricted   Period"),   Executive

covenants   and   agrees   that,   except   on be