8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

March 17 , 2006 ( March 16, 2006)

Date of Report (Date of earliest event reported)

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Delaware	333-120412	58-2342021
(State or other jurisdiction of incorporation)	(Commission File No.)	(IRS Employer Identification No.)

420 Lexington Avenue, Suite 518

New York, NY 10170

(Address of principal executive offices, including zip code)

Registrant's telephone number, including area code: (212) 972-2000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers

On March 16, 2006 Fusion Telecommunications International, Inc. (‘Fusion”) appointed Matthew D. Rosen as Chief Executive Officer to succeed Marvin S. Rosen, who remains as Chairman.

Mr. Rosen served as President and Chief Operating Officer since August 2003, Executive Vice President and Chief Operating Officer between February 2002 and August 2003, Executive Vice President and President of Global Operations between November 2000 and January 2002 and as President, US Operations between March 2000 and November 2000. From 1998 to 2000, he held various management positions including President of the Northwest and New England Operations for Expanets, a $1.3 billion integrated network communications service provider. From 1996 to 1998 he was Corporate Director of Operations for Oxford Health Plans, a $4 billion health care company, where he worked on developing and executing turnaround strategies. Prior to his role as Corporate Director of Operations, Mr. Rosen held an executive position in a start-up healthcare technology subsidiary of Oxford where he was an integral part in developing strategy and building its sales, finance and operations departments. Prior to Oxford, Mr. Rosen was an investment banker in Merrill Lynch’s corporate finance department. Mr. Rosen is the son of our Chairman and former Chief Executive Officer, Marvin Rosen.

Mr. Rosen’s employment agreement was amended to extend the term until June 30, 2008, provided that the term shall extend for an additional one year unless terminated by either side on 90 days notice. The agreement provides for an annual salary of not less than $350,000, with a minimum annual bonus equal to 25% of his annual salary. In the event that we achieve a positive EBITDA for two successive quarters, he will be paid a one-time bonus equal to 50% of his annual salary then in effect. In the event that the employment is terminated without cause, including by change of control, the agreement provides that Mr. Rosen will receive unpaid base salary accrued through the effective date of the termination plus any pro-rata bonus and a lump sum of 200% of his base salary and 200% of his highest annual bonus for the three years preceding his termination. The agreement also provides for a one year non-compete provision. In the event of a sale of the company for an amount in excess of $100 million, Mr. Rosen would receive a bonus equal to 2% of proceeds between $100 million and $200 million, 3% of proceeds between $200 million and $300 million, 4% of proceeds between $300 million and $400 million, and 5% of proceeds over $400 million.

Item 9.01 Financial Statements and Exhibits

(c)Exhibits

99.1   Amended and Restated Employment Agreement between Registrant and Matthew D. Rosen.

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned thereunto duly authorized.

	Fusion Telecommunications International, Inc.
March 13 , 2006	By:	/s/ Matthew D. Rosen
		Matthew D. Rosen, President and Chief Executive Officer

2

EXHIBIT INDEX

EXHIBIT NUMBER	DESCRIPTION
99.1	Amendment and Restated Employment Agreement Between Registrant and Matthew D. Rosen.

3

EX-99.1

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the 16th day of March, 2006 by and between Fusion Telecommunications International, Inc., a Delaware corporation (hereinafter called the "Company"), and Matthew Rosen (hereinafter called the "Executive").

Recitals

A.The Employee and the Company entered into an employment agreement on November 11, 2004 providing for Employee’s employment with the Company as President and Chief Operating Officer (“2004 Agreement”).

B.The Board of Directors of the Company (the "Board") desires to amend the 2004 Agreement to assure the Executive’s continued employment as Chief Executive Officer and to compensate him therefore.

C.The Board has determined that this Agreement will reinforce and encourage the Executive's continued attention and dedication to the Company.

D.The Executive is willing to make his services available to the Company on the terms and conditions hereinafter set forth.

Agreement

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

1 1.Employment.

1.1Employment and Term. The Company hereby agrees to employ the Executive and the Executive hereby agrees to serve the Company, on the terms and conditions set forth herein, for the period commencing on the date hereof and expiring on September 30, 2008 (the "Initial Term") unless sooner terminated as hereinafter set forth; provided, however, that com-men-cing on September 8, 2008 the Initial Term of this Agreement shall automatically be extended for one additional year unless at least ninety (90) days prior to such date, the Company shall have delivered to the Executive or the Executive shall have delivered to the Company written notice that the term of the Executive's employment hereunder will not be extended.

1.2Duties of Executive. The Executive shall serve as the Chief Executive Officer of the Company and shall have powers and authority superior to any other officer or employee of the Company or of any subsidiary of the Company. The Executive shall be required to report solely to, and shall be subject solely to the supervision and direction of the Board of Directors and no other person or group shall be given authority to supervise or direct Executive in the performance of his duties. In addition, the Executive shall regularly consult with the Chairman of the Board with respect to the Company's business and affairs. The Executive shall devote substantially all his working time and attention to the business and affairs of the Company (excluding any vacation and sick leave to which the Executive is entitled), render such services to the best of his ability, and use his reasonable best efforts to promote the interests of the Company. It shall not be a violation of this Agreement for the Executive to (A) serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill speaking engagements or teach at educational institutions, and (C) manage personal investments, so long as such activities do not significantly interfere with the performance of the Executive’s responsibilities as an employee of the Company in accordance with this Agreement.

1.3Place of Performance. In connection with his employ-ment by the Company, the Executive shall be based at the Company's principal executive offices except for travel reasonably necessary in connection with the Company's business.

2.Compensation.

2.1Base Salary. Commencing on the effective date of this Agreement, the Executive shall receive a base salary at the annual rate of not less than $350,000 (the "Base Salary") beginning as of December 31, 2005 and during the term of this Agreement, with such Base Salary payable in installments consistent with the Company's normal payroll sched-ule, sub-ject to applicable withholding and other taxes. The Base Salary shall also be reviewed, every six months, for merit increases and may, by action and in the discretion of the Compensation and Nominating Committee established by the Board, be increased at any time or from time to time. The Base Salary shall also be increased at any time and from time to time as shall be substantially consistent with increases in base salary awarded in the ordinary course of business to other key executives of the Company and its subsidiaries. The Base Salary, if increased, shall not thereafter be decreased for any reason.

2.2Incentive Compensation. The Executive shall be entitled to receive such bonus payments or incentive compensation as may be determined at any time or from time to time by the Board (or any authorized committee thereof) in its discretion. Such potential bonus payments and/or incentive compensation shall be considered at least annually by the Board or committee. In no event shall Executive’s annual bonus be less than 25% of Executive’s annual salary then in effect. In the event that the Company achieves positive Earnings Before Income Tax, Depreciation and Amortization (“EBITDA”) for two successive fiscal quarters, Executive will be immediately paid a one time bonus equal to 50% of his annual salary then in effect. Thereafter, the Compensation Committee shall review Executive’s bonus at least annually; provided , however that for each successive fiscal year that the Company achieves positive EBITDA, the Executive’s minimum annual bonus will not be less than 50% of his annual salary then in effect.

2.3Stock Option.

(a) The Executive shall be entitled to participate in all stock option plans (the “Plans”) in effect during the term of this Agreement.

(b) The Company hereby agrees that all options granted to Executive will have a three year vesting schedule.

(c)Notwithstanding the preceding clause (b), the Option shall become immediately exercisable as to 100% of the shares of Common Stock not otherwise vested upon any termination of Executive’s employment pursuant to Section 4.5 hereof, it being agreed that the Company shall cooperate in good faith to afford the Executive the right to exercise the Option in full immediately prior to any "Change in Control" (as hereinafter defined). In the event that Executive is terminated pursuant to Section 4.5, Executive shall have the greater of (i) five years after termination, or (ii) the remaining term of the option, in order to exercise his options.

(d)The Company shall take all action reasonably requested by the Executive to permit any “cashless” exercise of the Option that is permitted under the Plan.

(e)Upon proper exercise of an Option, the Executive shall be deemed for all purposes the owner of the shares of Common Stock that are purchasable upon such exercise.

(f)The provisions of the Plan shall not be adversely modified as to the Executive without the Executive’s prior written consent.

3.Expense Reimbursement and Other Benefits.

3.1Expense Reimbursement. During the term of Execu-tive's employ-ment here-under, the Company, upon the sub-mis-sion of reasonable supporting docu-menta-tion by the Executive, shall reim-burse the Executive for all reason-able expenses actually paid or incurred by the Executive in the course of and pursuant to the business of the Company, including expenses for travel and entertainment.

3.2Incentive, Savings and Retirement Plans. During the Initial Term, the Executive shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs applicable to other key executives of the Company and its subsidiaries, in each case comparable to those currently in effect or as subsequently amended. Such plans, practices, policies and programs, in the aggregate, shall provide the Executive with compensation, benefits and reward opportunities at least as favorable as the most favorable of such compensation, benefits and reward opportunities provided at any time hereafter with respect to other key executives.

3.3Welfare Benefit Plans. During the Initial Term, the Executive and/or the Executive’s family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and its subsidiaries (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death and travel accident insurance plans and programs), at least as favorable as the most favorable of such plans, practices, policies and programs in effect at any time hereafter with respect to other key executives.

3.4Working Facilities. During the term of Executive's employment hereunder, the Company shall furnish the Executive with an office, a secretary and such other facilities and services suitable to his position and adequate for the performance of his duties hereunder.

3.5Vacation. During the Initial Term, the Executive shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company and its subsidiaries as in effect at any time hereafter with respect to other key executives of the Company and its subsidiaries; provided, however, that in no event shall Executive be entitled to fewer than five weeks paid vacation per year.

4.Termination.

4.1Termination for Cause. Notwithstanding anything contained to the con-trary in this Agreement, this Agreement may be terminated by the Company for Cause. As used in this Agreement, "Cause" shall only mean (i) an act or acts of personal dishonesty taken by the Executive and intended to result in substantial personal enrichment of the Executive at the expense of the Company, (ii) subject to the following sentences, repeated violation by the Executive of the Executive's material obligations under this Agreement which are demonstrably willful and deliberate on the Executive’s part and which are not remedied in a reasonable period of time after receipt of written notice from the Company, or (iii) the conviction of the Executive for any criminal act which is a felony. Upon any determination by the Company's Board of Directors that Cause exists under clauses (i) and (ii) of the preceding sentence, the Company shall cause a special meeting of the Board to be called and held at a time mutually convenient to the Board and Executive, but in no event later than ten (10) business days after Executive's receipt of the notice contemplated by clauses (i) and (ii). Executive shall have the right to appear before such special meeting of the Board with legal counsel of his choosing to refute any determination of Cause specified in such notice, and any termination of Executive's employment by reason of such Cause determination shall not be effective until Executive is afforded such opportunity to appear. Any termination for Cause pursuant to clause (i) or (iii) of the first sentence of this Section 4.1 shall be made in writing to Executive, which notice shall set forth in detail all acts or omissions upon which the Company is relying for such termina-tion. Upon any termination pursuant to this Section 4.1, the Executive shall be entitled to be paid his Base Salary to the date of termination and the Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of termination).

4.2Disability. Notwithstanding anything contained in this Agreement to the contrary, the Company, by written notice to the Executive, shall at all times have the right to terminate this Agreement, and the Executive's employment hereunder, if the Exe-cutive shall, as the result of mental or physical incapacity, illness or disability, fail to perform his duties and respon-sibilities provided for herein for a period of more than one hundred twenty (120) consecutive days in any 12-month period. Upon any termination pursuant to this Section 4.2, the Executive shall be entitled to be paid his Base Salary for the remaining term of the Agreement. In the event that the Agreement has less than six months remaining at such time, Executive shall be entitled to a payment equal to six months of his Base Salary. In addition, Executive shall be entitled to reimbursement for all business expenses incurred prior to his disability.

4.3Death. In the event of the death of the Executive during the term of his employment hereunder, the Company shall pay to the estate of the deceased Executive an amount equal to the Base Salary for the remaining term of this Agreement. In the event that the Agreement has less than six months remaining at such time, Executive shall be entitled to a payment equal to six months of his Base Salary. In addition, Executive shall be entitled to reimbursement for all business expenses incurred prior to his death.

4.4 Optional Termination Notwithstanding anything contained in this Agreement to the contrary, the Executive, by giving thirty days notice to the Company, have the right to terminate this Agreement at his sole discretion. Upon any termination pursuant to this Section 4.4, the Execution shall be entitled to be paid his Base Salary to the date of termination and the Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of termination), unless the Executive and the Company agree to a different arrangement.

4.5Termination Without Cause. At any time the Com-pany shall have the right to terminate Executive's employ-ment here-under by written notice to Executive; provided, however, that the Company shall (i) pay to Executive any unpaid Base Salary accrued through the effective date of termination spe-cified in such notice, and any pro-rata bonus that would be payable had Executive completed a full year of employment, and (ii) pay to the Executive in a lump sum, in cash within 30 days after the date of employment termination, an amount equal to 200% of his Base Salary then in effect and 200% of his highest annual bonus for the three years preceding Executive’s termination. The Company shall be deemed to have terminated the Executive's employment pursuant to this Section 4.4 if such employment is terminated (i) by the Company without Cause, or (ii) by the Executive voluntarily for "Good Reason." For purposes of this Agreement, "Good Reason" means

(a)the assignment to the Executive of any duties inconsistent in any respect with the Executive's position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 1.2 of this Agreement, or any other action by the Company which results in a dimi-nution in such position, authority, duties or responsi-bilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

(b)any failure by the Company to comply with any of the provisions of Section 2, Section 3, or Section 16 of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Executive;

(c)the Company's requiring the Executive to be based at any office or location more than 25 miles from Grand Central Station in New York, New York, except for travel reasonably required in the performance of the Executive's responsibilities;

(d) any change in the designation of the particular executive that the Executive is obligated to report to under Section 1.2 hereof;

(f)any purported termination by the Company of the Executive's employment otherwise than as expressly permitted by this Agreement;

(g)any failure by the Company to comply with and satisfy Section 10(c) of this Agreement; or

(h)any termination by the Executive for any reason during the six-month period following the effective date of any "Change in Control".

For purposes of this Section 4.5, any good faith determination of "Good Reason" made by the Executive shall be conclusive.

5.Change in Control. For purposes of this Agreement, a “Change in Control” shall mean:

(a)The acquisition (other than by or from the Company), at any time after the date hereof, by any person, entity or "group", within the mean-ing of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the "Exchange Act"), of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either the then outstand-ing shares of common stock or the combined voting power of the Company's then outstanding voting securities entitled to vote generally in the election of directors; or

(b)All or any of the twelve (12) individuals who, as of the date hereof, constitute the Board (as of the date hereof the "Incumbent Board") cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company's share-holders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board (other than an election or nomination of an individual whose ini-tial assumption of office is in connection with an actual or threatened election contest relating to the election of the directors of the Company, as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board; or

(c)Approval by the shareholders of the Company of (A) a reorganization, merger or consolidation with respect to which persons who were the share-holders of the Company immediately prior to such reorganiza-tion, merger or consolidation do not, immediately thereafter, own more than 75% of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated company's then out-standing voting securi-ties, (B) a liquidation or dissolution of the Company, or (C) the sale of all or substantially all of the assets of the Company, unless the approved reorganization, merger, consolidation, liquidation, dissolution or sale is subsequently abandoned.

(d)The approval by the Board of the sale, distribution and/or other transfer or action (and/or series of sales, distributions and/or other transfers or actions from time to time or over a period of time), that results in the Company's ownership of less than 50% of the Company's current assets.

6.Sale of Company Bonus. In the event that the Company or substantially all of the assets of the Company are sold,whether for cash or securities or a combination thereof ( the “Consideration”) then the Executive shall be entitled to a bonus, , equal to the following: (i) under $100 million purchase price, the Executive shall not be entitled to a bonus hereunder; (ii) between $100 million and $199,999,999 purchase price, the Executive shall be entitled to a bonus equal to 2% of the Consideration price; (iii) between $200 million and $299,999,999 purchase price, the Executive shall be entitled to a bonus (“Sale of the Company Bonus”) equal to 3% of the Consideration; (iv) between $3 million and $399,999,999, the Executive shall be entitled to a bonus equal to 4% of the Consideration or (v) over $400 million purchase price, the Executive shall be entitled to 5% of the Consideration. To the extent possible, the Company shall pay the Sale of the Company Bonus in cash. If the Company is unable to pay the Sale of the Company Bonus in cash, than the Company may pay the sale of the Company Bonus in Consideration or a combination of cash and Consideration.

7.Restrictive Covenants.

7.1Nondisclosure. During his employment and for twelve (12) months thereafter, Executive shall not divulge, com-muni-cate, use to the detriment of the Company or for the benefit of any other person or persons, or misuse in any way, any Confiden-tial Information (as hereinafter defined) pertaining to the business of the Company. Any Confidential Information or data now or hereafter acquired by the Executive with respect to the business of the Company shall be deemed a valuable, special and unique asset of the Company that is received by the Executive in confidence and as a fiduciary, and Executive shall remain a fidu-ciary to the Company with respect to all of such information. For purposes of this Agreement, "Confidential Information" means all material information about the Company's business disclosed to the Executive or known by the Executive as a consequence of or through his employment by the Company (including information conceived, originated, discovered or developed by the Executive) after the date hereof, and not generally known.

7.2Nonsolicitation of Employees. While employed by the Company and for a period of twelve (12) months thereafter, Executive shall not directly or indirectly, for himself or for any other person, firm, corpo-ration, partnership, association or other entity, attempt to employ or enter into any contractual arrangement with any employee or former employee of the Company, unless such employee or former employee has not been employed by the Company for a period in excess of six months.

7.3Covenant Not to Compete. Executive will not, at any time, during the term of this Agreement, and for one (1) year thereafter, either directly or indirectly, engage in, with or for any enterprise, institution, whether or not for profit, business, or company, competitive with the business (as identified herein) of Employer as such business may be conducted on the date thereof, as a creditor, guarantor, or financial backer, stockholder, director, officer, consultant, advisor, employee, member, or otherwise of or through any corporation, partner-ship, association, sole proprietorship or other entity; provided, that an investment by Employee, his spouse or his children is permitted if such investment is not more than four percent (4%) of the total debt or equity capital of any such competitive enterprise or business. As used in this Agreement, the business of Employer shall be deemed to include any business which directly competes with the Company in the provision of traditional voice services, VoIP services, private network services, Internet access services and Internet based video conferencing services. The covenant not to compete for one year after termination shall only be effective if the Executive has received all compensation due to him pursuant to this Agreement, and is receiving compensation during the time of the non compete. The Company shall have the right in its sole discretion to waive the non-compete.

7.4Injunction. It is recognized and hereby acknowledged by the parties hereto that a breach by the Executive of any of the covenants contained in Section 7.1, 7.2 or 7.3 of this Agreement will cause irreparable harm and damage to the Company, the monetary amount of which may be virtually impossible to ascertain. As a result, the Executive recognizes and hereby acknowledges that the Company shall be entitled to an injunction from any court of competent juris-diction enjoining and restraining any violation of any or all of the covenants contained in this Section 6 by the Executive or any of his affiliates, associates, partners or agents, either directly or indirectly, and that such right to injunction shall be cumulative and in addition to whatever other remedies the Company may possess.

8.Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

9.Notices: Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been given when delivered by hand or when deposited in the United States mail, by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Company:	Fusion Telecommunications Intl, Inc. 420 Lexington Avenue - Suite 518 New York, New York 10170 Attention: CEO
If to the Executive:	Matthew Rosen 420 Lexington Avenue, Suite 518 New York, New York 10170
with a copy to:	Gersten Savage LLP 600 Lexington Avenue New York, New York 10022 Attention: Jay M. Kaplowitz

or to such other addresses as either party hereto may from time to time give notice of to the other in the aforesaid manner.

10.Successors.

(a)This Agreement is personal to the Executive and without the prior written consent of the Company shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives.

(b)This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c)The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the busi-ness and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to per-form it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as herein-before defined and any successor to its business and/or assets which assumes and agrees to perform this Agreement by operation of law or otherwise.

11.Severability. The invalidity of any one or more of the words, phrases, sentences, clauses or sections contained in this Agreement shall not affect the enforceability of the remain-ing portions of this Agreement or any part thereof, all of which are inserted conditionally on their being valid in law, and, in the event that any one or more of the words, phrases, sentences, clauses or sections contained in this Agreement shall be declared invalid, this Agreement shall be construed as if such invalid word or words, phrase or phrases, sentence or sentences, clause or clauses, or section or sections had not been inserted. If such invalidity is caused by length of time or size of area, or both, the otherwise invalid provision will be considered to be reduced to a period or area which would cure such invalidity.

12.Waivers. The waiver by either party hereto of a breach or violation of any term or provision of this Agreement shall not operate nor be construed as a waiver of any subsequent breach or violation.

13.Damages. Nothing contained herein shall be con-strued to prevent the Company or the Executive from seeking and recover-ing from the other damages sustained by either or both of them as a result of its or his breach of any term or provision of this Agreement.

14.No Third Party Beneficiary. Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or give any person (other than the parties hereto and, in the case of Executive, his heirs, personal representative(s) and/or legal represen-tative) any rights or remedies under or by reason of this Agreement.

15.Full Settlement. The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement. The Company agrees to pay, to the full extent permitted by law, all legal fees and expenses which the Executive may rea-sonably incur as a result of any contest (regardless of the outcome thereof) by the Company or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to Section 16 of this Agreement), plus in each case interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Code.

16.Certain Reduction of Payments by the Company.

(d)Anything in this Agreement to the con-trary notwithstanding, in the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or dis-tributed or distributable pursuant to the terms of this Agreement or otherwise (a "Payment"), would be nondeduc-tible by the Company for Federal income tax purposes because of Section 280G of the Code, then the aggregate present value of amounts payable or distributable to or for the benefit of the Executive pursuant to this Agreement (such payments or distribu-tions pursuant to this Agreement are hereinafter referred to as "Agreement Payments") shall be reduced to the Reduced Amount. The "Reduced Amount" shall be an amount expressed in present value which maximizes the aggregate present value of Agreement Payments without causing any Pay-ment to be nondeductible by the Company because of Section 280G of the Code. Anything to the contrary notwithstand-ing, if the Reduced Amount is zero and it is determined fur-ther that any Payment which is not an Agreement Payment would nevertheless be nondeductible by the Company for Federal income tax purposes because of Section 280G of the Code, then the aggregate present value of Payments which are not Agreement Payments shall also be reduced (but not below zero) to an amount expressed in present value which maximizes the aggregate present value of Payments without causing any Payment to be nondeductible by the Company be-cause of Section 280G of the Code. For purposes of this Section 16, present value shall be determined in accordance with Section 280G(d)(4) of the Code. Any amount which is not paid in the taxable year in which it was originally scheduled to be paid as a result of the postponement thereof pursuant hereto shall be payable in the next succeeding taxable year in which such payment will not result in the disallowance of a deduction pursuant to either Section 162(m) or 280G of the Code; provided, however, that all postponed payments shall be placed in a Rabbi trust or similar vehicle for the benefit of the Executive in such a way that the amounts so transferred are not taxable to such person or deductible by the Company until payment from such vehicle to the Executive is made. In the event a payment has been made to the Executive, but then disallowed as a deduction by the Internal Revenue Service and return of the payment is required into the trust, said payment to the Executive shall be treated as a loan and said payment to the trust shall be treated as repayment of said loan. The Company shall not pledge, hypothecate or otherwise encumber any amounts held in the trust or other similar vehicle for the benefit of the Executive hereunder.

(e)All determinations required to be made under this Section 16 shall be made by Rothstein, Kass & Company, P.C. or, at the Executive's option, any other nationally or regionally recognized firm of independent public accountants selected by the Executive and approved by the Company, which approval shall not be unreasonably withheld or delayed (the "Accounting Firm"), which shall provide (i) detailed supporting cal-culations both to the Company and the Executive within twenty (20) business days of the termination of Executive’s employment or such earlier time as is requested by the Company, and (ii) an opinion to the Executive that he has substantial authority not to report any excise tax on his Federal income tax return with respect to any Payments. Any such determi-nation by the Accounting Firm shall be binding upon the Com-pany and the Executive. The Executive shall determine which and how much of the Payments shall be eliminated or reduced consistent with the requirements of this Section 15, provided that, if the Executive does not make such determination within ten busi-ness days of the receipt of the calculations made by the Accounting Firm, the Company shall elect which and how much of the Payments shall be eliminated or reduced consistent with the require-ments of this Section 15 and shall notify the Executive promptly of such election. Within five business days there-after, the Company shall pay to or distribute to or for the benefit of the Executive such amounts as are then due to the Executive under this Agreement. All fees and expenses of the Accounting Firm incurred in connection with the determinations contemplated by this Section 16 shall be borne by the Company.

(f)As a result of the uncertainty in the applica-tion of Section 280G of the Code at the time of the initial determina-tion by the Accounting Firm hereunder, it is possi-ble that Payments will have been made by the Company which should not have been made ("Overpayment") or that additional Payments which will not have been made by the Company could have been made ("Under-payment"), in each case, consistent with the calcula-tions required to be made hereunder. In the event that the Accounting Firm, based upon the assertion of a deficiency by the Internal Revenue Service against the Executive which the Accounting Firm believes has a high probability of success, determines that an Overpayment has been made, any such Overpayment paid or distributed by the Company to or for the benefit of the Executive shall be treated for all purposes as a loan ab initio to the Executive which the Executive shall repay to the Company together with interest at the appli-cable federal rate provided for in Section 7872(f)(2) of the Code; provided, however, that no such loan shall be deemed to have been made and no amount shall be payable by the Em-ployee to the Company if and to the extent such deemed loan and payment would not either reduce the amount on which the Executive is subject to tax under Section 1 and Section 4999 of the Code or generate a refund of such taxes. In the event that the Accounting Firm, based upon control-ling pre-cedent or other substantial authority, determines that an Underpayment has occurred, any such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive together with interest at the applicable federal rate provided for in Section 7872(f)(2) of the Code.

17.Reimbursement of Legal Expenses. The Company shall promptly reimburse Executive for all reasonable legal fees incurred by Executive in connection with the preparation, negotiation and execution of this Agreement and ancillary documents.

18.Indemnification. The Company agrees to promptly execute and deliver to Executive an Indemnification Agreement in substantially the same form as set forth on Exhibit A.

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

FUSION TELECOMMUNICATIONS INTERNATIONAL, INC. 

By: ____________________ 

Philip Turits 

Treasurer  

EXECUTIVE: 

____________________ 

Matthew Rosen