EXHIBIT 4.16

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                            FIRST AMENDING AGREEMENT
                           TO THE EMPLOYMENT AGREEMENT


This First Amending Agreement dated as of September 1, 2000, is entered into by
and between EXFO Electro-Optical Engineering Inc., a corporation having its
principal place of business at 465 Godin Avenue, Vanier, Quebec, G1M 3G7, Canada
(the "Corporation") and Mario Larose, residing and domiciled at 20
Anse-a-Beaufils, Laval, Quebec, H7Y 1V4, Canada (the "Employee").


WHEREAS the Corporation and the Employee entered into an Employment Agreement
dated May 30, 2000 (the "Agreement") providing for the terms of employment of
the Employee;

WHEREAS the parties hereto have agreed to amend the Agreement to modify certain
terms of employment;

THEREFORE the parties agree as follows:

1.       AMENDMENTS

         1.1      Paragraph 1 of Schedule A to the Agreement is amended by
                  deleting sub-paragraph (i) in its entirety.

         1.2      Sub-paragraph 1(ii) of Schedule A to the Agreement is amended
                  to become sub-paragraph 1(i) and the text thereof is replaced
                  by the following:

                  "FROM SEPTEMBER 1, 2000 TO AUGUST 31, 2001: BASE SALARY OF
                  $180,000 PER ANNUM, PLUS A VARIABLE PORTION OF REMUNERATION
                  WHICH IS $40,000 PER ANNUM UPON ATTAINMENT BY THE CORPORATION
                  OF 100% OF THE HEALTH INDICATOR ESTABLISHED BY THE BOARD OF
                  DIRECTORS OF THE CORPORATION FOR THAT FINANCIAL YEAR. IN THE
                  EVENT THE CORPORATION DOES NOT FULLY ATTAIN THE HEALTH
                  INDICATOR FOR THE YEAR IN QUESTION OR SURPASSES THE HEALTH
                  INDICATOR, THE VARIABLE PORTION OF THE REMUNERATION SHALL BE
                  PAID IN THE SAME PROPORTION AS THE ATTAINMENT OF THE HEALTH
                  INDICATOR. THE VARIABLE PORTION SHALL BE PAID TWICE YEARLY,
                  AFTER THE END OF THE CORPORATION'S SECOND QUARTER AND AFTER
                  THE END OF THE FINANCIAL YEAR.

                  IN THE EVENT THE EMPLOYEE'S EMPLOYMENT IS TERMINATED BY THE
                  CORPORATION WITH CAUSE OR THE EMPLOYEE VOLUNTARILY TERMINATES
                  HIS EMPLOYMENT, THE

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                  VARIABLE PORTION OF THE REMUNERATION SHALL NOT BE PAYABLE FOR
                  THE FINANCIAL YEAR DURING WHICH THE EMPLOYMENT TERMINATED FOR
                  SUCH REASONS."


2.       MISCELLANEOUS

         2.1      In all respects, except for those changes required to give
                  meaning and effect to the amendments provided for in the
                  foregoing sections hereof, the Agreement as amended remains in
                  full force and effect, is hereby ratified and confirmed in all
                  respects, and is binding upon the parties hereto. This First
                  Amending Agreement constitutes the whole and entire agreement
                  between the parties hereto with respect to the subject matter
                  hereof and cancels and supersedes any prior written
                  agreements, declarations, commitments, representations,
                  undertakings, written or oral, in respect thereof.

         2.2      This Agreement shall be construed in accordance with and
                  governed for all purposes by the laws applicable in the
                  province of Quebec. Service of process in any dispute shall be
                  effective (a) upon the Corporation, if service is made on any
                  officer of the Corporation other than the Employee; (b) upon
                  the Employee, if served at Employee's residence last known to
                  the Corporation with an information copy to the Employee at
                  any other residence, or care of a subsequent employer, of
                  which the Corporation may be aware.

         2.3      This Agreement has been written in English at the express
                  request of the parties. Cette entente a ete redigee en anglais
                  a demande expresse des parties.


IN WITNESS WHEREOF, the parties hereto have executed this Agreement.



EXFO ELECTRO-OPTICAL
ENGINEERING INC.



BY:  /s/  Germain Lamonde                         /s/  Mario Larose
     --------------------                         -----------------------------
     GERMAIN LAMONDE                              MARIO LAROSE

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