Exhibit 10.8

SEVERANCE AGREEMENT

        THIS AGREEMENT is entered into as of July 26, 2002, by and between
Applied Films Corporation, a Colorado corporation, and Lawrence Firestone (the
“Executive”).

        WHEREAS, the Executive currently serves as a key employee of the Company
and his services and knowledge are valuable to the Company in connection with
the management of one or more of the Company’s principal operating facilities,
departments or subsidiaries; and

        WHEREAS, the Board has determined that it is in the best interests of
the Company and its stockholders to secure the Executive’s continued services
and to ensure the Executive’s continued dedication and objectivity in the event
of any threat or occurrence of, or negotiation or other action that could lead
to, or create the possibility of, a Change in Control of the Company, without
concern as to whether the Executive might be hindered or distracted by personal
uncertainties and risks created by any such possible Change in Control, and to
encourage the Executive’s full attention and dedication to the Company, the
Board has authorized the Company to enter into this Agreement.

        NOW, THEREFORE, for and in consideration of the promises and the mutual
covenants and agreements herein contained, the Company and the Executive hereby
agree as follows:

SECTION 1. TERM.

        This Agreement will commence on the Effective Date and shall continue in
effect for three (3) years from the Effective Date. However, at the end of such
three (3) year period and, if extended, at the end of each additional year
thereafter, the term of this Agreement shall be extended automatically for three
(3) additional years, unless the Board delivers written notice one hundred
eighty (180) days prior to the end of such term, or extended term, to the
Executive, that this Agreement will not be extended. If the Board delivers such
written notice, this Agreement will terminate at the end of the term, or
extended term, then in progress. Notwithstanding the foregoing, no such action
shall be taken by the Board during any period of time when the Board has
knowledge that any Person has taken steps reasonably calculated to effect a
Change in Control until, in the opinion of the Board, such Person has abandoned
or terminated its efforts to effect a Change in Control; and provided further,
that in no event shall this Agreement be terminated after a Change in Control.

        However, in the event a Change in Control occurs during the original or
any extended term, this Agreement will remain in effect for the longer of: (i)
twenty-four (24) months beyond the month in which such Change in Control
occurred; or (ii) until all obligations of the Company hereunder have been
fulfilled, and until all benefits required hereunder have been paid to the
Executive.

SECTION 2. DEFINITIONS.

        Whenever used in this Agreement, the following terms shall have the
meanings set forth below and, when the meaning is intended, the initial letter
of the word is capitalized.

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  2.1   “Base Salary” means the salary of record paid to the Executive as annual
salary, excluding amounts received under incentive or other bonus plan, whether
or not deferred.

  2.2   “Beneficial Owner” shall have the meaning ascribed to such term in Rule
13d-3 of the General Rules and Regulations under the Exchange Act.

  2.3   “Beneficiary” means the persons or entities designated or deemed
designated by the Executive pursuant to Section 11.3.

  2.4   “Board” means the Company's Board of Directors.

  2.5   “Cause” means: (a) the Executive’s willful and continued failure to
substantially perform his duties with the Company which do not differ, in any
material respect, from the Executive’s duties and responsibilities during the
ninety (90) day period immediately prior to a Change in Control (other than any
such failure resulting from Disability or occurring after issuance by the
Executive of a Notice of Termination for Good Reason), after a written demand
for substantial performance is delivered to the Executive that specifically
identifies the manner in which the Company believes that the Executive has
willfully failed to substantially perform his duties, and after the Executive
has failed to resume substantial performance of his duties on a continuous basis
within fourteen (14) calendar days of receiving such demand; (b) the Executive’s
willfully engaging in conduct (other than conduct covered under (a) above) which
is demonstrably and materially injurious to the Company, monetarily or
otherwise; or (c) the Executive’s having been convicted of a felony. For
purposes of this subparagraph, no act, or failure to act, on the Executive’s
part shall be deemed “willful”unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that the action or
omission was in the best interests of the Company.

  2.6   “Change in Control” means an occurrence of a nature with respect to the
Company that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Exchange Act. Without
limiting the inclusiveness of the definition in the preceding sentence, a Change
in Control shall be deemed to have occurred as of the first day that any one or
more of the following conditions is satisfied:

    (a)   Any Person is or becomes the Beneficial Owner, directly or indirectly,
of securities of the Company representing forty percent (40%) or more of the
combined voting power of the Company’s then outstanding securities; or

    (b)   At any time a majority of the Company’s Board of Directors is
comprised of other than Continuing Directors (for purposes of this section, the
term Continuing Director means a director who was either (i) first elected or
appointed as a director prior to the Effective Date of this Agreement; or (ii)
subsequently elected or appointed as a director if such director was

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      nominated or appointed by at least a majority of the then Continuing
Directors); or

    (c)   Any of the following occur:

      (i)   Any merger or consolidation of the Company, other than a merger or
consolidation in which the voting securities of the Company immediately prior to
the merger or consolidation continue to represent (either by remaining
outstanding or being converted into securities of the surviving entity) fifty
percent (50%) or more of the combined voting power of the Company or surviving
entity immediately after the merger of consolidation with another entity;

      (ii)   Any sale, exchange, lease, mortgage, pledge, transfer, or other
disposition (in a single transaction or a series of related transactions) of
assets or earning power aggregating more than fifty percent (50%) of the
Company’s assets or earning power on a consolidated basis. “Earning power” shall
mean the average EBITDA of the Company for the previous three (3) full fiscal
years.

      (iii)   Any liquidation or dissolution of the Company;

      (iv)   Any reorganization, reverse stock split, or recapitalization of the
Company which would result in a Change in Control; or

      (v)   Any transaction or series of related transactions having, directly
or indirectly, the same effect as any of the foregoing; or any agreement,
contract, or other arrangement providing for any of the foregoing.

  2.7   “Code” means the United States Internal Revenue Code of 1986, as
amended.

  2.8   “Committee” means the Compensation Committee of the Board or any other
committee appointed by the Board to perform the functions of the Compensation
Committee

  2.9   “Company” means Applied Films Corporation, or any successor thereto as
provided in Section 10.

  2.10   “Disability” means that, as a result of the Executive’s incapacity due
to physical or mental illness, the Executive shall have been absent from the
full-time performance of his duties with the Company for twelve (12) consecutive
months and, within thirty (30) calendar days after written notice of suspension
due to Disability is given, the Executive shall not have returned to the
full-time performance of his duties.

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  2.11   “Earned Bonus” means the executive bonus paid or payable to the
Executive with respect to any fiscal year of the Company.

  2.12   “Effective Date” means the date of this Agreement set forth above.

  2.13   “Effective Date of Termination” means (i) the date on which a
Qualifying Termination occurs which triggers the payment of Severance Benefits
under this Agreement, (ii) if the Executive dies, the date of his death, (iii)
if the Executive becomes disabled, the date of his Disability, or (iv) if the
Executive’s termination of employment is not a Qualifying Termination and not
because of his death or Disability, the date specified in a written notice given
pursuant to Section 11.1 prior to termination specifying the effective date of
such termination.

  2.14   “Exchange Act” means the United States Securities Exchange Act of 1934,
as amended.

  2.15   “Good Reason” shall mean, without the Executive’s express written
consent, the occurrence of any one or more of the following:

    (a)   The assignment of the Executive to duties materially inconsistent with
the Executive’s authorities, duties, responsibilities, and status (including
offices, titles, and reporting requirements) as an employee of the Company, or a
reduction or alteration in the nature or status of the Executive’s authorities,
duties, or responsibilities from those in effect during the immediately
preceding fiscal year other than changes substantially all of which are
beneficial to the Executive and which are accompanied by a material and
commensurate increase in compensation;

    (b)   The Company’s requiring the Executive to be based at a location which
is fifty (50) miles farther from the facility which is the Executive’s principal
business office than such distance at the time of the Change in Control, except
for required travel on the Company’s business to an extent substantially
consistent with the Executive’s business obligations in effect in the fiscal
year preceding the Change in Control;

    (c)   A reduction by the Company in the Executive’s Base Salary or a
reduction in the target incentive cash bonus formula not agreed to by a majority
of the participants in the cash bonus plan, in either case as in effect on the
Effective Date or as the same shall be increased from time to time;

    (d)   A material reduction in the Executive’s level of participation in any
of the Company’s short- and/or long-term incentive compensation plans, or
employee benefit or retirement plans, policies, practices, or arrangements in
which the Executive participates as of the Effective Date; provided, however,
that reductions in the levels of participation in any such plans shall not be
deemed to be “Good Reason” if the Executive’s reduced level of participation in
each such program remains substantially consistent with

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      the average level of participation of other Executives who have positions
commensurate with the Executive’s position;

    (e)   A successor to the Company refuses or fails to assume and agree to
perform this Agreement, as contemplated in Section 10;

    (f)   Any termination of Executive’s employment by the Company that is not
effected pursuant to a Notice of Termination; or

    (g)   Any other reason determined in the solediscretion of the Board to be a
“Good Reason.”

    The existence of Good Reason shall not be affected by the Executive’s
incapacity due to physical or mental illness. The Executive’s continued
employment shall not constitute a waiver of the Executive’s rights with respect
to any circumstance constituting Good Reason.

  2.16   “Notice of Termination” has the meaning set forth in Section 3.7.

  2.17   “Person” shall have the meaning ascribed to such term in Section
3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a “group”as provided in Section 13(d).

  2.18   “Qualifying Termination” means any of the events described in Section
3.2, the occurrence of which triggers the payment of Severance Benefits under
this Agreement.

  2.19   “Severance Benefits” means the payment of severance compensation as
provided in Section 3.3.

SECTION 3. SEVERANCE BENEFITS.

        3.1 Right To Severance Benefits. The Executive shall be entitled to
receive from the Company Severance Benefits, as described in Section 3.3, if
there has been a Change in Control and if, within the six (6) month period prior
to the effective date of a Change in Control and after the Board became aware
that any Person was seeking to effect a Change of Control, or within twenty-four
(24) months following the effective date of a Change in Control, the Executive’s
employment with the Company shall end for any reason specified in Section 3.2.

        The Executive shall not be entitled to receive Severance Benefits if he
is terminated for Cause, or if his employment with the Company ends due to death
or Disability or due to a voluntary termination of employment by the Executive
without Good Reason.

        3.2 Qualifying Termination. The occurrence of any one or more of the
following events within the six (6) month period prior to the effective date of
a Change in Control and after the Board became aware that any Person was seeking
to effect a Change of Control, or within twenty-four (24) months following the
effective date of a Change in Control shall trigger the payment of Severance
Benefits to the Executive under this Agreement:

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    (a)   An involuntary termination of the Executive’s employment by the
Company for reasons other than Cause;

    (b)   A voluntary termination by the Executive for Good Reason; or

    (c)   The Company or any successor company breaches any of the provisions of
this Agreement.

        3.3 Description Of Severance Benefits. If the Executive becomes entitled
to receive Severance Benefits, as provided in Sections 3.1 and 3.2, the Company
shall pay to the Executive and provide him with the following:

    (a)   A lump sum cash amount equal to: (i) one times the highest rate of the
Executive’s annualized Base Salary rate in effect within the three (3) yearsup
to and including the Effective Date of Termination, plus (ii) one times the
Executive’s average Earned Bonus over the two (2) full fiscal years prior to the
Change in Control; if the Executive has not been eligible for an Earned Bonus
for two (2) fiscal years, such average Earned bonus shall be deemed to be the
Executive’s target bonus for the current fiscal year multiplied by the decimal
equivalent of the average percentage of target bonus paid to the Company’s
Executive Management Team in the last two (2) fiscal years; if the Executive has
been eligible for an Earned Bonus for the last full fiscal year but not for the
last two (2) full fiscal years, such Average Earned Bonus shall be the average
of (i) the Executive’s actual Earned Bonus for the last full fiscal year, and
(ii) the Executive’s target bonus for the current fiscal year multiplied by the
decimal equivalent of the average percentage of target bonus paid to the
Company’s Executive Management Team in the penultimate full fiscal year prior to
the Change in Control; provided, that any amount to be paid pursuant to this
Section 3.3(a) shall be reduced by any other amount of severance relating to
salary or bonus continuation to be received by the Executive upon termination of
employment of the Executive under any salary or bonus continuation guideline,
plan, agreement, policy or arrangement of the Company and any severance payments
the Company is required to make pursuant to the requirements of any United
States or foreign law or regulation.

    (b)   A lump sum cash amount equal to the sum of (i) the Executive’s unpaid
Base Salary and accrued vacation pay through the Effective Date of Termination,
(ii) the Executive’s average Earned Bonus over the two (2) full fiscal years
prior to the Change in Control, multiplied by a fraction, the numerator of which
is the number of days completed in the then-existing fiscal year through the
Effective Date of Termination, and the denominator of which is three hundred
sixty-five (365) less any Earned Bonus already paid to the Executive with
respect to such fiscal year; if the Executive has not been eligible for an
Earned Bonus for two (2) fiscal years, such average Earned bonus shall be deemed
to be the Executive’s target bonus for the current fiscal year multiplied by the
decimal equivalent of the average percentage of target bonus paid to the
Company’s Executive Management Team in the last two (2) fiscal years; if the
Executive has been eligible for an

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      Earned Bonus for the last full fiscal year but not for the last two (2)
full fiscal years, such Average Earned Bonus shall be the average of (i) the
Executive’s actual Earned Bonus for the last full fiscal year, and (ii) the
Executive’s target bonus for the current fiscal year multiplied by the decimal
equivalent of the average percentage of target bonus paid to the Company’s
Executive Management Team in the penultimate full fiscal year prior to the
Change in Control; (iii) any Earned Bonus for the previous fiscal year which has
not yet been paid, and (iv) any compensation previously deferred by the
Executive other than pursuant to any deferred stock plan or any tax qualified
plan (together with any interest and earnings thereon), in each case to the
extent not previously paid.

    (c)   A continuation of the welfare benefits of health care, life and
accidental death and dismemberment, and disability insurance coverage for twelve
(12) months after the Effective Date of Termination. These benefits shall be
provided to the Executive at the same premium cost, and at the same coverage
level, as in effect as of the Executive’s Effective Date of Termination. If,
however, the premium cost and/or level of coverage shall change for all
employees of the Company, the cost and/or coverage level, likewise, shall change
for each Executive in a corresponding manner. The continuation of these welfare
benefits shall be discontinued prior to the end of the twelve (12) month period
or the date on which the Executive has available substantially similar benefits
from a subsequent employer, as determined by the Committee. For purposes of this
section, the Executive shall be deemed to be on paid leave of absence during
such twelve (12) month period.

    (d)   To the extent not previously paid or provided, the Company shall
timely pay or provide to the Executive any other amounts or benefits required to
be paid or provided or which the Executive is eligible to receive under any
plan, program, policy or practice or contract or agreement of the Company and
its affiliated companies through the Effective Date of Termination, and the
payments received and the time period over which benefits are payable under
Section 3.3(a) shall be included for determining participation eligibility,
vesting and the amount of any benefit.

        3.4 Vesting of Options. Upon a Change in Control, all unvested options
to purchase Company stock held by the Executive shall become fully vested
immediately.

        3.5 Termination For Disability. Following a Change in Control, if the
Executive’s employment is terminated due to Disability, the Executive shall
receive his Base Salary through the Effective Date of Termination, at which
point in time the Executive’s benefits shall be determined in accordance with
the Company’s disability, insurance, and other applicable plans and programs
then in effect.

        3.6 Termination For Death. Following a Change in Control, if the
Executive’s employment is terminated by reason of his death, the Executive shall
receive his Base Salary through the Effective Date of Termination, at which
point in time the Executive’s benefits shall be determined in accordance with
the Company’s survivor’s benefits, insurance, and other applicable plans and
programs of the Company then in effect.

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        3.7 Termination For Cause, Or Other Than For Good Reason. Following a
Change in Control, if the Executive’s employment is terminated either: (a) by
the Company for Cause; or (b) by the Executive other than for death or
Disability and other than for Good Reason, the Company shall pay the Executive
his full Base Salary and accrued vacation through the Effective Date of
Termination, at the rate then in effect, plus all other amounts to which the
Executive is entitled under any compensation plans of the Company, at the time
such payments are due, and the Company shall have no further obligations to the
Executive under this Agreement.

        3.8 Notice Of Termination. Any termination by the Company for Cause or
by the Executive for Good Reason shall be communicated by a Notice of
Termination. For purposes of this Agreement, a “Notice of Termination” shall
mean a written notice which shall indicate the specific termination provision in
this Agreement relied upon, and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive’s
employment under the provision so indicated.

SECTION 4. FORM AND TIMING OF SEVERANCE BENEFITS.

        4.1 Form And Timing Of Severance Benefits. The Severance Benefits
described in Sections 3.3(a), 3.3(b), and 3.3(d) shall be paid in cash to the
Executive in a single lump sum as soon as practicable following the Effective
Date of Termination, but in no event beyond thirty (30) days from such date.

        4.2 Withholding Of Taxes. The Company shall be entitled to withhold from
any amounts payable under this Agreement all taxes which are legally required to
be withheld (including, without limitation, any United States federal taxes and
any other state, city, or local taxes or foreign taxes), and are actually paid
to such governmental authority by the Company.

SECTION 5. EXCISE TAX EQUALIZATION PAYMENT.

        5.1 Excise Tax Equalization Payment. If the Executive becomes entitled
to Severance Benefits or any other payment or benefit under this Agreement, or
under any other agreement with or plan of the Company (in the aggregate, the
“Total Payments”), if all or any part of the Total Payments will be subject to
the tax (the “Excise Tax”) imposed by Section 4999 of the Code (or any similar
tax that may hereafter be imposed), the Company shall pay to the Executive in
cash an additional amount (the “Gross-Up Payment”) in such amount such that
after payment by the Executive of any federal, state, and local income tax,
penalties, interest, and Excise Tax upon the Gross-Up Payment provided for by
this Section 5.1 (including FICA and FUTA), the Executive retains an amount of
the Gross-Up Payment equal to the Excise Tax upon the Total Payments. Such
payment shall be made by the Company to the Executive as soon as practical
following the Effective Date of Termination, but in no event beyond thirty (30)
days from such date.

        5.2 Tax Computation. For purposes of determining whether any of the
Total Payments will be subject to the Excise Tax and the amounts of such Excise
Tax:

  (a)   Any other payments or benefits received or to be received by the
Executive in connection with a Change in Control of the Company or the
Executive’s

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    termination of employment (whether pursuant to the terms of this Agreement
or any other plan, arrangement, or agreement with the Company, or with any
Person whose actions result in a Change in Control of the Company or any Person
affiliated with the Company or such Persons) shall be treated as “parachute
payments” within the meaning of Section 280G(b) (2) of the Code, and all “excess
parachute payments” within the meaning of Section 280G(b) (1) shall be treated
as subject to the Excise Tax, unless in the opinion of tax counsel as supported
by the Company’s independent auditors and acceptable to the Executive, such
other payments or benefits (in whole or in part) do not constitute parachute
payments, or unless such excess parachute payments (in whole or in part)
represent reasonable compensation for services actually rendered within the
meaning of Section 280G(b) (4) of the Code in excess of the base amount within
the meaning of Section 280G(b) (3) of the Code, or are otherwise not subject to
the Excise Tax;

  (b)   The amount of the Total Payments which shall be treated as subject to
the Excise Tax shall be equal to the lesser of: (i) the total amount of the
Total Payments; or (ii) the amount of excess parachute payments within the
meaning of Section 280G(b) (1) (after applying clause (a) above); and

  (c)   The value of any noncash benefits or any deferred payment or benefit
shall be determined by the Company’s independent auditors in accordance with the
principles of Sections 280G(d) (3) and (4) of the Code.

        For purposes of determining the amount of the Gross-Up Payment, the
Executive shall be deemed to pay federal income taxes at the highest marginal
rate of federal income taxation in the calendar year in which the Gross-Up
Payment is to be made, and to pay state and local income taxes at the highest
marginal rate of taxation in the state and locality of the Executive’s residence
on the Effective Date of Termination, net of the maximum reduction in federal
income taxes which could be obtained from deduction of such state and local
taxes.

        5.3 Subsequent Recalculation. If the Internal Revenue Service adjusts
the computation of the Company under Section 5.2 so that the Executive did not
receive the intended net benefit, the Company shall reimburse the Executive for
the full amount necessary to make the Executive whole, including a market rate
of interest, as determined by the Committee.

SECTION 6. THE COMPANY’S PAYMENT OBLIGATIONS.

        The Company’s obligation to make the payments and the arrangements
provided for herein shall be absolute and unconditional, and shall not be
affected by any circumstances, including, without limitation, any offset,
counterclaim, recoupment, defense, or other right which the Company may have
against the Executive or anyone else, except that the Company shall have the
right to set off any indebtedness of the Executive to the Company for borrowed
money which indebtedness is represented by a promissory note. All amounts
payable by the Company hereunder shall be paid without notice or demand. Each
and every payment made hereunder by the Company shall be final, and the Company
shall not seek to recover all or any part of such payment from the Executive or
from whomsoever may be entitled thereto, for any reasons whatsoever.

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        The Executive shall not be obligated to seek other employment in
mitigation of the amounts payable or arrangements made under any provision of
this Agreement, and the obtaining of any such other employment shall in no event
effect any reduction of the Company’s obligations to make the payments and
arrangements required to be made under this Agreement, except to the extent
provided in Section 3.3(c).

SECTION 7. LEGAL REMEDIES.

        7.1 Payment Of Legal Fees. To the extent permitted by law, the Company
shall reimburse the Executive for all legal fees, costs of litigation,
prejudgment interest, and other expenses incurred in good faith by the Executive
as a result of the Company’s refusal to provide the Severance Benefits to which
the Executive becomes entitled under this Agreement, or as a result of the
Company’s contesting the validity, enforceability, or interpretation of this
Agreement, or as a result of any conflict between the parties pertaining to this
Agreement, if the Executive prevails with respect to any one material issue of
dispute in connection with such legal action.

        7.2 Arbitration. The Executive shall have the right and option to elect
(in lieu of litigation) to have any dispute or controversy arising under or in
connection with this Agreement settled by arbitration, conducted before a panel
of three (3) arbitrators sitting in a location selected by the Executive within
fifty (50) miles from the location of his employment with the Company, in
accordance with the rules of the American Arbitration Association then in
effect.

        Judgment may be entered on the award of the arbitrator in any court
having proper jurisdiction. All expenses of the arbitrators shall be borne by
the Company. If the Executive prevails with respect to any one material issue of
dispute in connection with such arbitration, the Company shall pay to the
Executive the fees and expenses of the counsel for the Executive incurred with
respect to the arbitration.

SECTION 8. OUTPLACEMENT ASSISTANCE.

        Following a Qualifying Termination (as described in Section 3.2), the
Executive shall be reimbursed by the Company for the costs of all outplacement
services obtained by the Executive within the two (2) year period after the
Effective Date of Termination; provided, however, that the total reimbursement
shall be limited to an amount equal to the lesser of fifteen percent (15%) of
the Executive’s Base Salary, or Twenty-Five Thousand and No/100 Dollars
($25,000).

SECTION 9. OBLIGATIONS OF THE EXECUTIVE.

        9.1 Limitation on Executive’s Voluntary Termination. The Executive
agrees that if any Person attempts a Change in Control, he shall not voluntarily
leave the employ of the Company without a Good Reason specified in Section
2.15(b), (c) or 2.15(d), (a) until such attempted Change in Control terminates
or (b) if a Change in Control shall occur, until ninety (90) days following such
Change in Control. For purposes of clause (a) of the preceding sentence, Good
Reason shall be determined as if a Change in Control had occurred when such
attempted Change in Control became known to the Board.

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      9.2 Confidential Information and Non-Solicitation.

        (a)        The Executive acknowledges that, as an employee of the
Company, he will be making use of, acquiring and adding to confidential
information of a special and unique nature and value relating to the Company and
its strategic plan and financial operations. The Executive further recognizes
and acknowledges that all confidential information is the exclusive property of
the Company, is material and confidential, and is critical to the successful
conduct of the business of the Company. Accordingly, the Executive covenants and
agrees that he will use confidential information for the benefit of the Company
only and shall not at any time, directly or indirectly, during the term of this
Agreement or thereafter divulge, reveal or communicate any confidential
information to any person, firm, corporation or entity whatsoever, or use any
confidential information for his own benefit or for the benefit of others. The
Executive also agrees not to engage in any business involving the production or
design of any products that are similar to any of the principal products of the
Company (as determined on the Effective Date of Termination), directly or
indirectly, whether as an employee, proprietor, partner, shareholder, consultant
or otherwise, for one (1) year after the Effective Date of Termination. The
Executive also agrees not to hire or solicit for hire, directly or indirectly,
any employee on the payroll of the Company for any third party during the term
of this Agreement and for one (1) year after the Date of Termination without the
prior written consent of the Company. In no event shall an asserted violation of
the provisions of this Section 9.2 constitute a basis for deferring or
withholding any amounts otherwise payable to the Executive under this Agreement.

        (b)        Any termination of the Executive’s employment or of this
Agreement shall have no effect on the continuing operation of this Section 9.2.

        (c)        The Executive acknowledges and agrees that the Company will
have no adequate remedy at law, and could be irreparably harmed, if the
Executive breaches or threatens to breach any of the provisions of this Section
9.2. The Executive agrees that the Company shall be entitled to equitable and/or
injunctive relief to prevent any breach or threatened breach of this Section
9.2, and to specific performance of each of the terms hereof in addition to any
other legal or equitable remedies that the Company may have. The Executive
further agrees that he shall not, in any equity proceeding relating to the
enforcement of the terms of this Section 9.2, raise the defense that the Company
has an adequate remedy at law.

SECTION 10. SUCCESSORS AND ASSIGNMENT.

      10.1 Successors To The Company.

        (a)        This Agreement shall not be terminated by any merger or
consolidation of the Company whether the Company is or is not the surviving or
resulting corporation or as a result of any transfer of all or substantially all
of the assets of the Company. In the event of any such merger, consolidation or
transfer of assets, the provisions of this Agreement shall be binding upon the
surviving or resulting corporation or the person or entity to which such assets
are transferred.

        (b)        The Company agrees that concurrently with any merger,
consolidation or transfer of assets referred to in Section 10.1(a), it will
cause any successor or transferee unconditionally to assume, by written
instrument delivered to the Executive (or his Beneficiary

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or estate), all of the obligations of the Company hereunder. Failure of the
Company to obtain such assumption prior to the effectiveness of any such merger,
consolidation or transfer of assets shall be a breach of this Agreement and
shall entitle the Executive to compensation and other benefits from the Company
in the same amount and on the same terms as the Executive would be entitled
hereunder if the Executive’s employment were terminated following a Change in
Control voluntarily for Good Reason. For purposes of implementing the foregoing,
the date on which any such merger, consolidation or transfer becomes effective
shall be deemed the Effective Date of Termination.

        10.2 Assignment By The Executive. This Agreement shall inure to the
benefit of and be enforceable by the Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees, and legatees. If the Executive dies while any amount would still be
payable to him hereunder had he continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the Executive’s Beneficiary. If the Executive has not named a
Beneficiary, then such amounts shall be paid to the Executive’s devisee,
legatee, or other designee, or if there is no such designee, to the Executive’s
estate.

SECTION 11 MISCELLANEOUS.

        11.1.       Notices. For purposes of this Agreement, all notices,
including without limitation, a Notice of Termination, and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given when delivered or five (5) days after deposit in the United
States mail, certified and return receipt requested, postage prepaid, addressed
(1) if to the Executive, to 325 Roxbury Circle, Colorado Springs, Colorado
80906, and if to the Company, to 9586 I-25 Frontage Rd., Longmont, Colorado
80534, attention Chief Executive Officer, with a copy to the Secretary, or (2)
to such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.

        11.2.       Employment Status. Except as may be provided under any other
agreement between the Executive and the Company, the employment of the Executive
by the Company is “at will,” and may be terminated by either the Company or the
Executive at any time, subject to applicable law and subject to the respective
obligations of the Company and the Executive under the terms of this Agreement.

        11.3.       Beneficiaries. The Executive may designate one or more
persons or entities as the primary and/or contingent Beneficiaries of any
Severance Benefits owing to the Executive under this Agreement. Such designation
must be in the form of a signed writing acceptable to the Committee. The
Executive may make or change such designations at any time.

        11.4.       Severability. In the event any provision of this Agreement
shall be held illegal or invalid for any reason, the illegality or invalidity
shall not affect the remaining parts of the Agreement, and the Agreement shall
be construed and enforced as if the illegal or invalid provision had not been
included. Further, the captions of this Agreement are not part of the provisions
hereof and shall have no force and effect.

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        11.5.       Modification. No provision of this Agreement may be
modified, waived, or discharged unless such modification, waiver, or discharge
is agreed to in writing and signed by the Executive and by an authorized member
of the Committee, or by the respective parties’ legal representatives and
successors.

        11.6.       Applicable Law. To the extent not preempted by the laws of
the United States, the laws of the state of Colorado shall be the controlling
law in all matters relating to this Agreement.

        IN WITNESS WHEREOF, the parties have signed this Agreement as of the day
and year written above.

            APPLIED FILMS CORPORATION

By ______________________________
     Thomas Edman
          Its: President

______________________________
Lawrence Firestone  

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