Exhibit 10.8
EMPLOYMENT AGREEMENT
     THIS EMPLOYMENT AGREEMENT (“Agreement”), effective this 1st day of
February, 2010 (“Effective Date”), is entered into between American Locker Group
Incorporated, a Delaware corporation (the “Employer”), and Paul M. Zaidins (the
“Executive”).
WITNESSETH
     WHEREAS, the Employer desires to employ the Executive as President, and the
Executive desires to assist in the development and oversee the implementation of
the goals and objectives of the Employer in accordance with the policies
established by the Board of Directors of Employer; and
     WHEREAS, the Employer desires to be ensured of the Executive’s continued
active participation in the business of the Employer; and
     WHEREAS, the parties desire to specify the terms and conditions of
Executive’s continuing employment with the Employer and to provide certain
severance benefits which shall be due the Executive if his employment with the
Employer is terminated under specified circumstances.
     NOW THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Definitions.
     The following words and terms shall have the meanings set forth below for
the purposes of this Agreement:
     (a) Base Salary. “Base Salary” shall have the meaning set forth in Section
3(a) hereof.
     (b) Board. “Board” shall mean the Board of Directors of Employer.
     (c) Cause. Termination of the Executive’s employment for “Cause” shall mean
termination because of willful misconduct, Fiduciary Breach, willful violation
of any law, rule or regulation (other than traffic violations or similar
offenses) or final cease-and-desist order; conviction of, or entering a plea of
guilty or no contest to, a crime constituting a felony; chronic addiction to
alcohol, drugs or similar substances affecting the Executive’s ability to
perform his duties hereunder; material breach of any provision of this
Agreement; or gross negligence by the Executive in the performance of his
duties; provided, however, the Executive shall have been informed in writing of
the act, or the failure to act, constituting Cause for termination, and shall
have been provided an opportunity to cure such act or failure to act (if
curable) within thirty (30) days and provided further, if it is not reasonable
to cure such act or failure to act within thirty (30) days, a reasonable period
of additional time will be provided. For purposes of this section, no act or
failure to act on the Executive’s part shall be considered “willful” unless
done, or
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omitted to be done, by the Executive not in good faith and without reasonable
belief that the Executive’s action or omission was in the best interest of the
Employer. Cause shall be determined in good faith by the affirmative vote of a
majority of the Board after the Executive has been provided in writing the facts
and circumstances giving rise to termination for Cause, and the opportunity to
make a presentation to the Board in defense of such facts and circumstances, and
said presentation to the Board may be with the Executive’s counsel.
     (d) Change of Control. “Change of Control” means the occurrence of any of
the following: (i) the adoption of a plan relating to the liquidation or
dissolution of the Employer, (ii) the sale, lease or transfer, in one or a
series of transactions, of all or substantially all of the assets of the
Employer or of the Employer and its subsidiaries taken as a whole, to any Person
or group (as such term is used in Section 13(d)(3) of the Exchange Act),
(iii) the first day on which a majority of the members of the Board are not
Continuing Directors or (iv) any Person or group is or becomes the “beneficial
owner (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of
1934, except that a Person shall be deemed to have “beneficial ownership” all
shares that any such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of shares of Voting Stock of the Company representing more than 35%
of the voting power of all of the Voting Stock of the Company. Notwithstanding
the foregoing, if (iv) occurs due to an Exempted Transaction (as defined below),
such action or actions shall not qualify as a Change of Control. As used herein,
an “Exempted Transaction” shall mean a transaction, or series of transactions,
that has been approved by a majority of the Board and that has, as its primary
purpose, to cause the Employer to no longer be subject to the periodic
reporting, disclosure and other obligations under the Securities Exchange Act of
1934, as amended.
     (e) Continuing Directors. “Continuing Directors” means, as of any date of
determination, any member of the Board who (i) was a member of the Board on
February 1, 2008, or (ii) was nominated for election or elected to the Board
with, or whose election to the Board was approved by, the affirmative vote of a
majority of the Continuing Directors who were members of the Board at the time
of such nomination or election.
     (f) Date of Termination. “Date of Termination” shall mean (i) if the
Executive’s employment is terminated for Cause or Disability, the date specified
in the Notice of Termination; and (ii) if the Executive’s employment is
terminated for any other reason not specified in (i), the date on which a Notice
of Termination is given or as specified in such Notice.
     (g) Disability. Termination by the Employer of the Executive’s employment
based on “Disability” shall mean termination because the Executive is unable to
perform the essential functions of his position due to a physical or mental
impairment which either: (i) qualifies the Executive for disability benefits
under the applicable long-term disability plan maintained by the Employer or any
subsidiary or, if no such plan applies, which would qualify the Executive for
disability benefits under the Federal Social Security System; or (ii) extends
for a period of at least four (4) consecutive months or more than six (6) months
in any twelve (12) month period.
     (h) Exchange Act. “Exchange Act” shall mean the Securities Exchange Act of
1934, as amended.

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     (i) Fiduciary Breach. “Fiduciary Breach” shall mean the Executive’s breach
of his fiduciary duty to the Company or the Executive’s intentional misconduct,
which breach or misconduct involves personal profit.
     (j) Good Reason. Termination by the Executive of the Executive’s employment
for “Good Reason” shall mean termination by the Executive, on thirty (30) days’
written notice to Employer, based on:
          (i) Without the Executive’s express written consent, (i) a demotion of
the Executive to a position within the Employer that is subordinate to the
President of the Employer or (ii) a material adverse change made by the Employer
in the Executive’s functions, duties or responsibilities as President, as such
duties exist of the date hereof;
          (ii) Without the Executive’s express written consent, a reduction by
the Employer in the Executive’s Base Salary, as such salary may be increased
from time to time or, except to the extent permitted by Section 3(b) hereof, a
material reduction in the package of fringe benefits required to be provided to
the Executive pursuant to this Agreement, taken as a whole;
          (iii) Without the Executive’s express written consent, the relocation
of the Executive outside Dallas or Tarrant County, Texas;
          (iv) The occurrence of a Change of Control, provided such termination
by the Executive shall occur within six (6) months following such Change of
Control.
     (k) ICP. “ICP” shall mean the American Locker Group Incentive Compensation
Plan as it may be amended from time to time.
     (l) Notice of Termination. Any purported termination of the Executive’s
employment by the Employer for any reason, including without limitation, for
Cause on Disability, or by the Executive for any reason, including without
limitation for Good Reason, shall be communicated by a written “Notice of
Termination” to the other party hereto. For purposes of this Agreement, a
“Notice of Termination” shall mean a dated notice which: (i) indicates the
specific termination provision in this Agreement relied upon; (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive’s employment under the provision so indicated;
(iii) specifies a Date of Termination, which shall be not less than thirty
(30) nor more than ninety (90) days after such Notice of Termination is given,
except in the case of the Employer’s termination of the Executive’s employment
for Cause, for which the Date of Termination may be the date of the notice; and
(iv) is given in the manner specified in Section 11 hereof.
     (m) Person. “Person” shall mean an individual, partnership, corporation,
business trust, limited liability company, limited liability partnership, joint
stock company, trust, unincorporated association, joint venture or other entity.

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     (n) Voting Stock. “Voting Stock” shall mean all classes of capital stock of
the Employer then outstanding and normally entitled to vote in elections of
directors of the Employer.
2. Term of Employment.
     (a) Employer hereby employs the Executive to serve as President of Employer
and Executive hereby accepts said employment and agrees to render such services
to the Employer, on the terms and conditions set forth in this Agreement. Unless
extended as provided in this Section 2, this Agreement shall terminate three
(3) years after the Effective Date.
     (b) During the term of this Agreement, the Executive shall perform such
executive services for the Employer as is consistent with his title and shall
devote such time, attention and energies to the business of the Employer as the
Board reasonably deems necessary to build stockholder value. Executive may
during the term hereof be involved in other business activities so long as such
activities, individually or collectively, do not materially interfere with the
performance of Executive’s duties hereunder and as long as Executive notifies
the Board (by written notice to the Chairman of the Board) prior to the
commencement of such activities; provided that Executive shall not be required
to notify the Board of any activities if such activities consist solely of
passive investment activities.
3. Compensation and Benefits.
     (a) For services rendered hereunder by the Executive, the Employer shall
compensate and pay Executive for his services during the term of this Agreement
at a minimum annual gross base salary of One Hundred Seventy Thousand and No/100
Dollars ($170,000.00) for the year ending December 31, 2010 and each year
thereafter (the “Base Salary”), which may be increased from time to time in such
amounts as may be determined by the Board.
     (b) During the term of the Agreement, Executive shall be entitled to
participate in and receive the benefits of any pension or other retirement
benefit plan, 401(k) plan, profit sharing, stock option, employee stock
ownership, incentive compensation, or other plans, benefits and privileges given
to executive level employees of the Employer, to the extent commensurate with
his then duties and responsibilities, as fixed by the Board. The Employer may
amend or terminate any such plan in its discretion, but shall not make any
material changes in such plans, benefits or privileges that would adversely
affect the Executive’s rights or benefits thereunder, other than in an
across-the-board change of benefits to all senior executives of the Employer.
The basis on which the Executive shall be entitled to participate in any such
plans and the benefits to be received by him thereunder shall be governed by the
terms of such respective plans and in the event of any conflict between such
plans and this Agreement, the terms of such plans shall control.
     (c) During the term of this Agreement, the Executive shall be entitled to
four (4) weeks of paid vacation, to be taken in accordance with the Employer’s
normal and customary vacation policies. The Executive shall also be entitled to
all paid holidays to which similarly situated executives and key management
employees of the Employer are entitled. The Executive shall be entitled to paid
leave due to physical illness in each calendar year to be taken and

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determined in accordance with the policies and procedures established from time
to time by the Employer. The Executive shall not be entitled to receive any
additional compensation from the Employer for failure to take a vacation, or
failure to use “sick days,” nor shall Executive be able to accumulate unused
vacation or “sick days,” except to the extent authorized by the Board.
     (d) The Executive shall be entitled to the use of that certain 2008 Ford
Explorer XLT (VIN#1FMEU63E28UA93897) that is currently leased by the Employer
for the remainder of the lease term and all costs of insurance and maintenance
of such vehicle shall be borne by the Employer.
     (e) The Employer hereby irrevocably transfers to Executive the laptop
computer that Employer has provided to the Executive for use in connection with
his employment; provided that, in the event of the termination of the
Executive’s employment hereunder, for any reason, the Employer shall be given
access to such laptop for the limited purpose of retrieving and deleting
information that belongs solely to the Employer.
4. Termination.
     (a) Termination Due to Death. If the Executive’s employment is terminated
by reason of the Executive’s death, the extent to which of any beneficiary of
the Executive shall be entitled to benefits under any benefit plan shall be
determined in accordance with the provisions of such plan or, in the case of the
ICP, as provided in Section 4(l).
     (b) Termination Due to Disability. If the Executive is terminated due to
Disability, the Employer shall maintain and provide for a period ending on the
earlier of: (i) the expiration of the remaining term of employment pursuant
hereto prior to the Notice of Termination; or (ii) the date of the Executive’s
full-time employment by another employer at no increased cost to the Executive,
the Executive’s continued participation in all group insurance, life insurance,
health and accident, disability and other employee benefit plans, programs and
arrangements in which the Executive was entitled to participate immediately
prior to the Date of Termination, provided that if the Executive’s participation
in any such plan, program or arrangement is barred or during such period any
such plan, program or arrangement is discontinued or the benefits thereunder are
materially reduced, the Employer shall arrange to provide the Executive with
benefits substantially similar to those which the Executive was entitled to
receive under such plans, programs and arrangements immediately prior to the
Date of Termination or those which the Executive would have been entitled to
receive had he continued in the employ of the Employer.
     (c) Termination by Executive by Resignation. In the event the Executive
terminates this Agreement by resignation, compensation pursuant to Section 3(a)
of this Agreement shall expire as of the Date of Termination. The extent to
which the Executive shall be entitled to benefits under any benefit plan shall
be determined in accordance with the provisions of such plan or, in the case of
the ICP, as provided in Section 4(l).
     (d) Termination by the Employer Other Than for Death, Disability or Cause.
If this Agreement is terminated by the Employer for reasons other than death,
Disability or Cause, effective the Date of Termination, the Employer shall pay
to the Executive a cash payment equal

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to twelve (12) months Base Salary at the salary level in effect on the Date of
Termination. These payments shall be made in accordance with the Employer’s
normal payroll procedures. Thereafter, the Employer’s obligation to pay
compensation pursuant to Section 3 of this Agreement shall expire. In addition
thereto, the Employer shall maintain and provide for a period ending at the
earlier of (i) the expiration of the remaining term of employment pursuant
hereto prior to the Notice of Termination or (ii) the date of the Executive’s
full-time employment by another employer at no increased cost to the Executive,
the Executive’s continued participation in all group insurance, life insurance,
health and accident, disability and other employee benefit plans, programs and
arrangements in which the Executive was entitled to participate immediately
prior to the Date of Termination, provided that If the Executive’s participation
in any such plan, program or arrangement is barred or during such period any
such plan, program or arrangement is discontinued or the benefits thereunder are
materially reduced, the Employer shall arrange to provide the Executive with
benefits substantially similar to those which the Executive was entitled to
receive under such plans, programs and arrangements immediately prior to the
Date of Termination or those which the Executive would have been entitled to
receive had he continued in the employ of the Employer. Executive shall, as a
condition to receiving the payment described in this Section 4(d) execute a full
and complete release of the Employer from any further obligation under this
Agreement, in form and substance reasonably satisfactory to Employer and
Executive.
     (e) Termination for Cause. Upon a termination by the Employer for Cause,
the Employer shall have no further obligation to pay compensation to the
Executive effective the Date of Termination. The extent to which the Executive
shall be entitled to benefits under a plan described in Section 3 upon such
termination shall be determined in accordance with the provisions of such plan
or, in the case of the ICP, as provided in Section 4(l).
     (f) Termination by the Executive for Good Reason. If the Executive
terminates this Agreement for the reasons specified in clauses (i), (ii) or
(iii) of the definition of Good Reason, the Executive shall be entitled to
receive the same payments and benefits specified in Section 4(d) of this
Agreement, subject to the limitations stated therein and in this Section 4(f).
If the Executive terminates this Agreement for the reasons specified in clauses
(iv) of the definition of Good Reason, the Executive shall be entitled to
receive his monthly Base Salary for a number of months (the “Payment Period”)
equal to the product of two (2) months multiplied by the number of full years
during which the Employee shall be employed prior to Executive’s termination of
this Agreement; provided, however, that the Payment Period shall not be shorter
than twelve (12) months and shall not be longer than twenty-four (24) months.
All payments pursuant to this Section 4(f) shall be made shall be made in
accordance with the Employer’s normal payroll procedures. For purposes of
calculating the Payment Period, the Employer and the Executive agree that the
Executive’s employment with the Employer commenced on November 8, 2006.
          The Executive shall, as a condition to receiving the payments
described in this Section 4(f), (i) execute a full and complete release of the
Employer from any further obligation under this Agreement, in form and substance
reasonably satisfactory to the Employer and the Executive and (ii) make himself
available to the Employer on a reasonable basis, during normal business hours
(not to exceed 40 hours a week), but at the Employer’s expense, for three months

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following the termination of his employment for purposes of assisting the
Executive’s successor as president of the Company.
     (g) Termination by Mutual Consent. Notwithstanding any of the foregoing
provisions of this Section 4, if at any time during the course of this Agreement
the parties by mutual consent decide to terminate it, they shall do so by
separate agreement setting forth the terms and conditions of such termination.
     (h) Cooperation with Employer After Termination of Employment. Following
termination of the Executive’s employment for any reason, the Executive shall
fully cooperate with the Employer in all matters relating to the winding up of
his pending work on behalf of the Employer including, but not limited to, any
litigation in which the Employer is involved, and the orderly transfer of any
such pending work to other employees of the Employer as may be designated by the
Employer. The Employer agrees to reimburse the Executive for any out-of-pocket
expenses he incurs in performing any work on behalf of the Employer following
the termination of his employment.
     (i) Full Discharge of Employer Obligations. The amounts payable to the
Executive pursuant to this Paragraph 4 following termination of his employment
shall be in full and complete satisfaction of the Executive’s rights under this
Agreement. Such amounts shall constitute liquidated damages with respect to any
and all such rights and claims and, upon the Executive’s receipt of such
amounts, the Employer shall be released and discharged from any and all
liability to the Executive in connection with this Agreement.
     (j) Access to Computers Systems following Termination. The Executive agrees
that following the termination of his employment with the Employer, he will not
access the Employer’s computer systems, download files or any information from
the Employer’s computer systems or in any way interfere, disrupt, modify or
change any computer program used by the Employer or any data stored on the
Employer’s computer systems.
     (k) Vesting of Stock Options. If the Executive’s employment is terminated
during the Employment Term for Good Reason or by reason of the death or
Disability of the Executive, (i) all stock options that have been previously
granted to the Executive by the Employer as of the date of such termination
shall become vested and immediately exercisable, and the Executive or his
personal representative or estate shall have six months from the date of his
termination to exercise such options and pay to the Employer the applicable
exercise price with respect thereto and (ii) all awards and grants of stock that
have been previously made to the Executive by the Employer as of the date of
termination that have not yet, as of the date of such termination vested, shall
automatically become vested and immediately deliverable to the Executive or his
personal representative or estate.
     (l) Effect of Termination on Participation in Incentive Compensation Plan.
Following the termination of the Executive’s employment for any reason (other
than by reason of a Fiduciary Breach), or for no reason, he shall be entitled to
receive the full balance of his share of the Gross Bonus Pool (as defined in and
determined in accordance with and pursuant to the Plan). In addition, if
Executive’s employment is terminated before the end of a fiscal year (other than
by reason of a Fiduciary Breach), the Employer shall, upon determination of the
Gross

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Bonus Pool in respect of the fiscal year in which his employment is terminated,
pay to Executive his percentage share of such additional contribution in respect
of such partial fiscal year (which percentage share may be adjusted to reflect
the fact that Executive’s employment ended prior to the completion of a full
fiscal year).
5. Mitigation; Exclusivity of Benefits; Notice of Other Employment.
     (a) The Executive shall not be required to mitigate the amount of any
benefits hereunder by seeking other employment or otherwise, nor shall the
amount of any such benefits be reduced by an compensation earned by the
Executive as a result of employment by another employer after the Date of
Termination or otherwise, except as provided in Sections 4(b) and 4(d) of this
Agreement. If the Executive’s employment terminates pursuant to Section 4(b) or
4(d) hereof, the Executive shall promptly (and in any event within 5 days)
notify the Employer of the date of the Executive’s full-time employment by
another employer.
     (b) The specific arrangements referred to herein are not intended to
exclude any other benefits which may be available to the Executive upon a
termination of employment with the Employer pursuant to employee benefit plans
of the Employer or otherwise.
     (c) If the Executive’s employment terminates pursuant to Section 4(b) or
4(d) hereof, the Executive shall promptly (and in any event within five
(5) days) notify the Employer of the date of the Executive’s full-time
employment by another employer.
6. Withholding.
     All payments required to be made by the Employer hereunder to the Executive
shall be subject to the withholding of such amounts, if any, relating to tax and
other payroll deductions as the Employer may reasonably determine should be
withheld pursuant to any applicable law or regulation.
7. Non-Competition and Non-Solicitation of Customers and Employees.
     (a) The Executive agrees that the Employer’s commitment to provide its
Confidential Information to him gives rise to the Employer’s interest in
restraining the Executive from competing against it and that the restrictions in
this Section are designed to enforce the Executive’s promise in Section 8 not to
disclose Confidential Information belonging to the Employer except as necessary
to perform his duties. Executive agrees that the restrictions in this section
are reasonable and do not impose a greater restraint than necessary to protect
the goodwill or other business interests of the Employer. The Executive also
acknowledges and recognizes the highly competitive nature of the business of the
Employer and accordingly agrees that, during the term of this Agreement and, in
consideration of the receipt of any payment pursuant to this Agreement, during
the Restricted Period, unless otherwise agreed to in writing by the Employer,
the Executive shall not, within the geographic areas in which the Executive
performed services for Employer, either directly or indirectly, in any manner or
capacity, whether as principal, agent, partner, member, officer, director,
employee, joint venturer,

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salesman, corporate shareholder or equity owner or otherwise for the benefit of
any Person (as defined below),
          (i) engage in, own any interest in, perform any services for,
participate in or be connected or associated in any way with any Competing
Business (as defined below) or Competing Services (as defined below);
          (ii) solicit the rendering of Competing Services to any Person;
          (iii) solicit the rendering of Competing Services to or from any
Person which is then or has been at any time during a period of one (1) year
prior to the Termination Date an Employer Customer (as defined below), employee,
salesperson, agent, representative of or supplier with whom Executive had
contact while employed by Employer;
          (iv) engage in conduct which interferes or might interfere with the
relationship of the Employer with any Customer, supplier, employee, salesperson,
agent or representative of the Employer; or
          (v) (A) induce any Employee (as defined below) to terminate employment
with the Employer or, (B) employ or offer employment to or participate in the
employment or offer of employment by any Person of any Employee.
Provided however, that the provisions of this Section 7(a) shall not be deemed
to prohibit the Employee’s ownership of publicly traded classes of stock
outstanding of any publicly held company. Provided further, that in the event
this Agreement has been terminated pursuant to either Section 4(d) or 4(f) so
that the Executive in entitled to receive payments at and following termination,
then if the Employer fails to make any payment to the Executive within twenty
(20) days after the Executive has given the Employer written notice that such
payment is due, the Executive shall be immediately released from any further
obligations under this Section 7(a). For purposes of this Section 7(a) a payment
is deemed made by the Employer if it is hand-delivered on or before the due date
or mailed three days prior to the due date to the Executive’s last know address
as provided to the Employer by the Executive in accordance with the requirements
of Section 11. Provided further, that if there is a good faith dispute as to
whether any payment under this Agreement is due, no payment shall be due, and
the provisions of this Section 7(a) shall continue in full force and effect,
until such dispute is finally resolved.
For purposes of this Section 7, the following terms shall be defined as follows:
     (b) “Person” means any individual, trust, partnership, corporation, limited
liability company, association, or other legal entity.
     (c) “Customer” means any Person with which the Employer or any subsidiary
is currently engaged to provide goods or services, has been engaged to provide
goods or services within twelve (12) months prior to the Date of Termination, or
actively marketed, discussed a project with, negotiated with, provided a bid to
or otherwise communicated with in an effort to

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obtain an engagement to provide goods or services sold by the Employer or any
subsidiary within twelve (12) months prior to the Date of Termination.
     (d) “Competing Business/Competing Services” means the manufacturing,
distributing, servicing, owning and operating of storage lockers, locks and keys
for postal, recreational, law enforcement and other applications.
     (e) “Employee” means any person who is employed by the Employer, any
subsidiary or any Affiliate.
     (f) “Restricted Period” means a period of one year following the date of
termination of the Executive’s employment under this Agreement; provided,
however that in the case of the restrictions set forth in Section 7(a)(v)(B),
the Restricted Period shall mean a period of 90 days following the date of
termination of the Executive’s employment under this Agreement.
8. Confidential Information, Return of Corporate Property.
     (a) Confidential Information: The Executive acknowledges that the
Employer’s trade secrets, as they may exist from time to time, and information
concerning its product development, programs, technical information, procurement
and sales activities and procedures, identity of customers and potential
customers, business plans, promotion and pricing techniques, credit and
financial data concerning customers, computer software, marketing plans, sales
plans, manufacturing plans, management organization information (including data
and other information relating to members of the Board and management),
operating policies or manuals, business plans, financial records, packaging or
web-site design or other financial, commercial, business or technical
information relating to the Employer or any of its subsidiaries or information
designated as confidential or proprietary that the Employer or any of its
subsidiaries may receive belonging to suppliers, customers or others who do
business with the Employer or any of its Subsidiaries are valuable, special and
unique assets of the Employer. In light of the highly competitive nature of the
industry in which the Employer’s business is conducted, the Executive agrees
that all knowledge and information described in the preceding sentence and
heretofore or in the future obtained by the Executive shall be considered
Confidential Information unless such Confidential Information has been
previously disclosed to the public by the Employer or is in the public domain
(other than by reason of the Executive’s breach of this Section 8). The Employer
shall provide the Executive with full access to its Confidential Information.
The Executive agrees that, except to the extent required by an order of a court
having competent jurisdiction or under subpoena from an appropriate government
agency, he will not disclose any Confidential Information to any Person or other
entity for any reason or purpose whatsoever, except as necessary in the
performance of his duties as an employee of or consultant to the Employer and
then only upon a written confidentiality agreement in such form and content as
requested by the Employer from time to time, nor shall the Executive make use of
any such secrets, processes or information (other than information in the public
domain, except information in the public domain by reason of Executive’s breach
of this Section 9) for his own purposes or for the benefit of himself, any
Person or other entity (except the Employer and its subsidiaries, under any
circumstances.

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     (b) Return of Employer Property. Upon the termination of his employment
with the Employer, the Executive (or, as appropriate, his personal
representatives) shall deliver promptly to the Employer (without retaining
copies of the same in any media), all property of the Employer within the
possession or under the control of the Executive (or, as appropriate, his
personal representatives).
9. Survival Beyond Termination.
     Sections 7 and 8 of this Agreement and the restrictions and obligations
contained therein shall survive the employment relationship and be binding
regardless of the reason for termination of employment.
10. Assignability.
     The Employer shall assign this Agreement and its rights and obligations
hereunder in whole, but not in part, to any corporation or other entity with or
into which the Employer may hereafter merge or consolidate or to which the
Employer may transfer all or substantially all of its assets, if in any such
case said corporation or other entity shall by operation of law or expressly in
writing assume all obligations of the Employer hereunder as fully as if it had
been originally made a party hereto, but may not otherwise assign this Agreement
or its rights and obligations hereunder. The Executive may not assign or
transfer this Agreement or any rights or obligations hereunder.
11. Notice.
     For the purposes of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by certified or registered mail, return
receipt requested, postage prepaid, addressed to the respective addresses set
forth below:
     To the Employer:
American Locker Group Incorporated
815 South Main Street
Grapevine TX 76051
Fax: 817.722.0100
Attn: Chairman of the Board
     To the Executive:
Paul M. Zaidins
____________________
____________________

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     In either case, with a copy to:
Timothy R. Vaughan
Hallett & Perrin, P.C.
2001 Bryan Street, Suite 3900
Dallas, Texas 75201
12. General Provisions.
     (a) Amendment and Waiver. No amendment or modification of this Agreement
shall be valid or binding upon (i) the Employer unless made in writing and
signed by a duly authorized officer of the Employer or (ii) the Executive unless
made in writing and signed by him.
     (b) Non-Waiver of Breach. No failure by either party to declare a default
due to any breach of any obligation under this Agreement by the other, nor
failure by either party to act quickly with regard thereto, shall be considered
to be a waiver of any such obligation, or of any future breach. Waiver by any
party hereto of any breach or default by the other party of any of the terms of
this Agreement shall not operate as a waiver of any other breach or default,
whether similar to or different from the breach or default waived. No waiver of
any provision of this Agreement shall be implied from any course of dealing
between the parties hereto or from any failure by either party hereto to assert
its or his rights hereunder on any occasion or series of occasions.
     (c) Severability. If any provision or portion of this Agreement, with the
exception of Sections 2 and 3, shall be determined to be invalid or
unenforceable for any reason, the remaining provisions of this Agreement shall
be unaffected thereby and shall remain in full force and effect.
     (d) Governing Law. To the extent not preempted by Federal law, the validity
and effect of this Agreement and the rights and obligations of the parties
hereto shall be construed and determined accordance with the law of the State of
Texas.
     (e) Entire Agreement; Termination of Prior Agreement. This Agreement
contains all of the terms agreed upon by the Employer and the Executive with
respect to the subject matter hereof and supersedes all prior agreements,
arrangements and communications between the parties dealing with such subject
matter, whether oral or written. All prior agreements between Executive and
Employer pertaining to Executive’s employment by the Employer, his compensation
or benefits following a termination of change of control of Employer are hereby
terminated.
     (f) Binding Effect. This Agreement shall be binding upon and shall inure to
the benefit of the transferees, successors and assigns of the Employer,
including any company or corporation with which the Employer may merge or
consolidate.

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     (g) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which when
taken together, shall be and constitute one and the same instrument.
     (h) Arbitration. If the parties hereto are unable to resolve their disputes
or controversies arising out of or relating to this Agreement or the
performance, breach, validity, interpretation or enforcement of this Agreement,
or the Executive’s employment and/or termination, including, without limitation,
any and all claims or causes of action which may arise or be asserted under
federal, state or local regulatory, statutory or common law, and including,
without limitation, claims under Title VII of the Civil Rights Act of 1964, the
Age Discrimination in Employment Act, the Americans with Disabilities Act, the
Civil Rights Act of 1991, the Family Medical Leave Act, the Texas Commission on
Human Rights Act, wrongful discharge, breach of contract, and tort (such as
intentional infliction of emotional distress, libel, slander, invasion of
privacy or personal injury), all such disputes and controversies will be
resolved by binding arbitration in accordance with the United States Arbitration
Act and the Commercial Arbitration Rules of the American Arbitration Association
(the “AAA”), and judgment upon the award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. A party hereto shall initiate
arbitration by sending written notice of its intention to arbitrate to the other
party and to the AAA office located in Dallas, Texas. Parties shall have the
same period of time to file claims as provided by the applicable statute of
limitation for such claim. Such written notice will contain a description of the
dispute and the remedy sought. The arbitration will be conducted at the offices
of the AAA in Dallas, Texas before an independent and impartial arbitrator
acceptable to the parties hereto. If the parties have not mutually agreed on an
acceptable arbitrator within thirty (30) days after the demand for arbitration
is filed, the arbitrator shall be appointed in the manner provided by the
Commercial Arbitration Rules of the AAA. The decision of the arbitrator will be
final and binding on the parties hereto and their successors and assignees.
Where consistent with applicable law, the arbitrator shall order the
non-prevailing party to pay the prevailing party’s attorney’s fees and all costs
of the arbitration. The parties will participate in good faith in a non-binding
mediation of their dispute at least 60 days prior to the date of the arbitration
hearing. The parties shall jointly select the mediator but if they are unable to
agree on a mediator, then the arbitrator shall appoint the mediator. The parties
hereto intend that this agreement to arbitrate be irrevocable.
     (i) Compliance With Section 409A
          (1) This Agreement shall be interpreted to avoid any excise tax,
penalty, or sanction (collectively “Sanctions”) under Section 409A of the
Internal Revenue Code, as amended (the “Code”). If any payment or benefit cannot
be provided or made at the time specified herein without incurring Sanctions
under Section 409A, then such benefit or payment shall be provided in full at
the earliest time thereafter when such Sanctions shall not be imposed. For
purposes of Section 409A of the Code, all payments to be made upon a termination
of employment under this Agreement may only be made upon a “Separation of
Service” (as defined in Section 409A of the Code), and each payment made under
this Agreement shall be treated as a separate payment and the right to a series
of installment payments under this Agreement is to be treated as a right to a
series of separate payments. In no event shall the Executive, directly or
indirectly, direct the calendar year of any payment. All reimbursements and
in-kind benefits

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provided under this Agreement shall be made or provided in accordance with the
requirements of Section 409A of the Code, including, where applicable, the
requirement that (i) any reimbursement is for expenses incurred during the
Executive’s lifetime (or during a shorter period of time specified in this
Agreement), (ii) the amount of expenses eligible for reimbursement, or in-kind
benefits provided, during a calendar year may not affect the expenses eligible
for reimbursement, or in-kind benefits to be provided, in any other calendar
year, (iii) the reimbursement of an eligible expense will be made on or before
the last day of the calendar year following the year in which the expense is
incurred, and (iv) the right to reimbursement or in-kind benefits is not subject
to liquidation or exchange for another benefit.
          (2) Notwithstanding any provision in this Agreement to the contrary,
if at the time of the Executive’s Separation of Service with the Employer, the
Employer has securities which are publicly traded on an established securities
market or otherwise (as determined by reference to Section 409A of the Code) and
the Executive is a “Specified Employee” (as defined in Section 409A of the Code)
and it is necessary to postpone the commencement of any severance benefits
otherwise payable pursuant to this Agreement as a result of such Separation of
Service to prevent any accelerated or additional tax under Section 409A of the
Code, then Employer will postpone the commencement of the payment of any such
payments or benefits hereunder (without any reduction in such payments or
benefits ultimately paid or provided to the Executive) that are not otherwise
paid within the short-term deferral exception under Section 409A of the Code and
are in excess of the lesser of two (2) times (i) the Executive’s then-annual
compensation or (ii) the limit on compensation then set forth in
Section 401(a)(17) of the Code, until the first payroll period that occurs after
the date that is six (6) months following the Executive’s Separation of Service
with the Employer. If any payments are postponed due to such requirements, such
postponed amounts will be paid in a lump sum to the Executive in the first
payroll period that occurs after the date that is six (6) months following the
Executive’s Separation of Service with the Employer. If the Executive dies
during the postponement period prior to the payment of the postponed amount, the
amounts withheld on account of Section 409A of the Code shall be paid to the
personal representative of the Executive’s estate within sixty (60) days after
the Executive’s death.
Signature page follows

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed on the date and year first written above.

            American Locker Group Incorporated,
a Delaware corporation
      By:   /s/ JOHN E. HARRIS         Name:   John E. Harris        Its:
Chairman of the Board              /s/ PAUL M. ZAIDINS       Paul M. Zaidins   
       

American Locker Group Incorporated
Employment Agreement

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