Exhibit 10.12

                              EMPLOYMENT AGREEMENT

     This  Agreement,  made  this  10th  day of  February,  2003 by and  between
Advanced Photonix, Inc. a Delaware corporation (hereinafter call "Company"), and
Richard Kurtz, an individual (hereinafter called "Employee")

                                    RECITALS:

     1. The Company  wishes to employ  Employee  and  utilize  his  professional
experience, ability, services, background and know-how, and

     2. Employee wishes to enter into the employ of the Company on the terms and
conditions contained in this Agreement.

     NOW, THEREFORE,  in consideration of the covenants and conditions set forth
in this Agreement and for other good and valuable consideration,  which has been
received and which is sufficient, the parties agree to the following terms:

     A. Employment Term.  Subject to the terms and conditions  contained in this
Agreement,  the Company employs Employee, and the Employee agrees to be employed
by the Company, for a two (2) year period from the date of this Agreement unless
this  Agreement is terminated in accordance  with the terms hereof.  The initial
two-year term is referred to in this Agreement as the "Employment Term"

     B. Duties.  Employee's position with the Company will be Chairman and Chief
Executive  Officer ("CEO").  As CEO,  Employee will be responsible for Corporate
Oversight, Investment Banking Relations, Strategic Planning, and have such other
authority  and  responsibilities  as  the  Board  of  Directors  reasonably  may
determine from time to time.

     C. Time and Efforts. Employee shall devote his entire working time, energy,
skill,  and best efforts to the performance of his duties  hereunder in a manner
which will  faithfully and  diligently  further the business and interest of the
Company.  Notwithstanding the foregoing, Employee shall be permitted to maintain
memberships  on the Boards of Directors and in  organizations  identified to the
Company in writing,  provided that such  activities  shall not, at any time, (i)
conflict with Employee's responsibilities hereunder or (ii) preclude the Company
or any  Subsidiary  (as  hereinafter  defined) of the  Company,  from  obtaining
contracts  from any such  company  or  organization.  For the  purposes  of this
Agreement,  any  corporation  with  respect to which  Company has the ability to
control more than fifty percent of the voting power shall be a "Subsidiary"  and
all such corporations shall be "Subsidiaries".

     D. Place of  Business.  Unless the  Company  terminates  operations  at the
Facility , Employee shall perform his duties from 1240 Avenida Acaso, Camarillo,
California  (the  "Facility"),  and shall not be required to change  location or
offices during the Employment Term or any renewal term provided;  however,  that
Employee  shall spend  whatever  time is  reasonably  necessary at other Company
locations,  including Dodgeville,  Wisconsin,  in order to effectively discharge
his duties as CEO.

     E. Compensation and Benefits.  For the services rendered by the Employee to
the Company, Employee shall receive a base salary at a rate of $160,000 per year
("Base Salary"), payable in reasonable installments in accordance with Company's
regular  payroll  practices in effect from time to time.  The ordinary and usual
sums for taxes and withholding will be deducted from this salary. Employee shall
be eligible for additional salary increases and stock options during the term of
this  Agreement at the  discretion of the Board of Directors.  Employee shall be
eligible  for an  incentive  cash bonus of 40 % of Base  Salary or greater on an
annual basis.  This incentive bonus will be based on measurable goals reasonably
set forth by the and  Compensation  Committee  of the Board of  Directors  after
discussion  with  Employee.  Employee will be entitled to take four (4) weeks of
paid vacation per year. Except as otherwise  provided in the Company's  employee
manual as from time to time in effect, no vacation time may be carried over from
one year to the next.  Employee  will be  entitled to  participate  in the group
medical  insurance  and all other fringe  benefit  plans  generally  provided to
employees within the Company in accordance with and subject to the terms of such
plans.

     F.  Expenses.  Company will reimburse  Employee for all reasonable  expense
incurred by Employee in connection with the performance of the Employee's duties
hereunder,  upon receipt of  appropriate  documentation  and in accordance  with
Company's regular reimbursement  procedures and practices in effect from time to
time.

     G. Death or Disability.

          (1) If Employee dies, all payments hereunder shall cease at the end of
     the month in which the  Employee's  death occurs and Company  shall have no
     further obligations or liabilities hereunder.

          (2) The Company may terminate the employment of the Employee hereunder
     at any time upon the permanent disability of the Employee, such termination
     to be  communicated by written notice given by the Company to the Employee.
     The Employee shall be considered to have become permanently disabled if (i)
     because of ill health or physical or mental  disability,  the  Employee has
     been or is  reasonably  likely to be  continuously  unable or  unwilling to
     perform his duties  responsibilities  hereunder for 120 consecutive days or
     (ii) within a 12-month period,  because of ill health or physical or mental
     disability, the Employee has been unable or unwilling to perform his duties
     and responsibilities hereunder for a total of 120 days, consecutive or not.
     In the event that the Employee's employment is terminated by the Company by
     reason of his permanent  disability,  the termination shall be treated as a
     termination by the Company without cause and the Employee shall be entitled
     to the  payments  (and  required to execute the  release)  provided  for in
     Section L (2) below;  provided,  however, that there shall be deducted from
     such payments an amount equal to 135% of the amount of any and all payments
     made to the  Employee  pursuant  to the terms of any  disability  insurance
     program maintained by the Company.

          H.  Confidentiality.  Employee  knows  that  the  Company  has  in its
     possession   business   information  which  is  confidential.   During  the
     Employee's  employment with the Company and after termination of Employee's
     employment,  Employee will not use or reveal,  divulge or make known to any
     person,  company or any other third  party,  any  Proprietary  Information.
     "Proprietary  Information" is any and all  information or data,  whether in
     writing,  or learned by Employee  orally,  by  observation or other sensory
     detection,  relating to any product,  product  design,  service,  research,
     development,   formula,   process,  method  of  distribution  or  delivery,
     know-how,  trade secret,  customer list,  contract term,  customer pricing,
     supplier list or price, business strategy,  compensation, plan or practice,
     operating records, software,  technology,  sales data, information or other
     records, list or documents used by the Company in operating the Business or
     otherwise.  The Proprietary  Information and all other information relating
     to the Company belongs to and will remain the property of the Company.  All
     Proprietary Information, other information and property of the Company must
     be  returned  to the Company by Employee  upon  termination  of  Employee's
     employment.

          I.   Discoveries  and  Works.   Any  and  all  writings,   inventions,
     improvements,  process and/or techniques which Employee may make, conceive,
     discover  or develop,  either  solely or jointly  with any other  person or
     persons,  at any time  during the term of this  Agreement,  whether  during
     working  hours or at any other time and  whether at the request or upon the
     suggestion  of the Company or  otherwise,  which relate to or are useful in
     connection with any business now or hereafter carried on or contemplated by
     the Company,  including developments or expansions of its present fields of
     operations,  shall be the  sole  and  exclusive  property  of the  Company.
     Employee  shall  make full  disclosure  to  Company  of all such  writings,
     inventions,  improvements, process, procedures and techniques, and shall do
     everything  necessary or desirable  to vest the absolute  title  thereto in
     Company. Employee shall write and prepare all specifications and procedures
     regarding   such   inventions,   improvements,   process,   procedures  and
     techniques, and otherwise aid and assist Company so the Company can prepare
     and  present  applications  for  copyright  or Letters  of Patent  wherever
     possible,  as well as reissues,  renewals,  and  extensions  thereof in all
     countries in which it may desire to have a copyright or patent  protection.
     Employee shall not be entitled to any additional or special compensation or
     reimbursement regarding any and all such inventions, improvements, process,
     procedures and techniques.

          J. Non Solicitation and Non-Competition.  The services of the Employee
     will be unique and  extraordinary  and  essential  to the  business  of the
     Company,  especially  since the Employee shall have access to the Company's
     customer  lists,  trade  secrets  and  other  privileged  and  confidential
     information essential to the Company's business.  Employee therefore agrees
     that he will not,  while he is an  employee of the Company and for a period
     of one  (1)  year  thereafter,  directly  or  indirectly  solicit,  induce,
     encourage or attempt to influence any employee, client, customer,  salesman
     or  supplier of Company to cease to do business  with or to  terminate  his
     employment  with  Company,  and shall not utilize for any such purposes any
     names and  addresses  of  customers or clients of Company or any data on or
     relating to past,  present or  prospective  (at the time of  termination of
     Employee's  employment)  customers or clients of Company.  Employee further
     agrees  that during  such  period he will not,  without  the prior  written
     approval of the  Company,  directly or  indirectly,  , whether as an owner,
     partner, member, employee,  officer, director or stockholder (other than as
     the owner of less than 5% of the stock of a  corporation  registered  under
     the  Securities  and  Exchange Act of 1934,  as  amended),  or in any other
     capacity,  engage in any business activity competitive with the business of
     the Company,  which is the  development,  manufacture  and  distribution of
     optoelectronic semiconductor based components,  hybrid assemblies and other
     proprietary solid state light and radiation detection devices. The Employee
     agrees  that  his  covenants  contained  in this  Section  J are  given  in
     consideration  of  the  purchase,  by a  subsidiary  of the  Company,  of a
     business partially owned by Employee.

          K. Injunctive  Relief.  Employee  acknowledges  that the  restrictions
     contained  herein are  reasonable  and  necessary  in order to protect  the
     legitimate interest of Company, and that any violation thereof would result
     in irreparable  injuries to Company,  and Employee  therefore  acknowledges
     that, in the event of his violation of any of these  restrictions,  Company
     shall be  entitled  to  obtain  from any  court of  competent  jurisdiction
     preliminary  and  permanent  injunctive  relief,  without the  necessity of
     posting  bonds,  as well as  damages  and an  equitable  accounting  of all
     earnings,  profits and other benefits  arising from such  violation,  which
     rights shall be cumulative  and in addition to any other rights or remedies
     to which Company may be entitled.

     L.  Termination.  (1) This Agreement may be terminated by Company for Cause
as defined  below upon  written  notice given to the  Employee.  As used herein,
"Cause" means;  (i) any act or acts of Employee which would  constitute a felony
or fraud; (ii) a continuing material breach by Employee in performing the duties
described in this  Agreement  which is not cured by Employee  within thirty (30)
days after the Company gives Employee  written notice  specifying the details of
the breach; or (iii) gross neglect, gross malfeasance,  willful neglect, willful
misconduct,  or dishonesty in performance  of Employee's  duties  hereunder.  If
Employee's  employment  is  terminated  by  Company  for  Cause,  the  Company's
obligations  under this  Agreement  will  terminate  and the Company will not be
liable to Employee for any payments of any kind under this Agreement,  including
without limitation any claim to unpaid bonus amounts.

     (2) If the  Company  for  reasons  other than Cause  terminates  Employee's
employment under this Agreement, Company will continue to pay the remaining Base
Salary  that  Employee  would  have  received  under this  Agreement,  including
payments  in  respect of any fringe  benefit  plans of the  Company in which the
Employee was a participant (to the extent that Employee continues to be eligible
to  participate  in such  plans and to the  extent  that he is not  eligible  to
participate therein,  Company shall make a cash payment to Employee in an amount
equal to the amount  that  Company  would  have paid in  reapect  of  Employee's
participation  therein  had he been  eligible to  participate)  plus any on-plan
bonus  Employee  would have been  entitled to had Employee  remained an Employee
through the end of the employment  year during which he was  terminated  without
cause,  provided that Employee executes a release of the Company for and against
any and all claims by the  Employee  except for the  obligations  of the Company
under  this  Section  L (2).  Such  release  shall  be in  such  form  as may be
reasonably required by the Company, but shall include a provision requiring that
in the  event of any  litigation  between  the  parties  with  respect  to their
respective  rights  under this  Section L (2),  the  prevailing  party  shall be
entitled to an award of legal fees and other costs and expenses  relating to the
litigation.

     (3) Employee may voluntarily  terminate his employment by the Company under
this Agreement at any time by giving ninety (90) days advance  written notice to
the  Company.  In the event of such a voluntary  termination  of  employment  by
Employee,  Employee  shall  continue  to render  services  as  provided  in this
Agreement  for such  period  of time not  exceeding  ninety  (90) days as may be
requested  by the  Company,  during  which  period he shall be paid the  amounts
described in Section E above; and with the exception of the covenants  contained
in Sections H, I, J and K,  neither the Company nor  Employee  shall  thereafter
have any further obligations or liability under or in respect to this Agreement.

     (4) In the event  that  fifty-one  percent  (51%) or more of the  Company's
stock or all or  substantially  all of the Company's  assets are sold to a third
party  (the  "Sale")  and  the  Company  terminates  the  Employee's  employment
hereunder in  connection  therewith,  Employee  shall be entitled to receive the
payments (subject to his executing the release) provided for under Section L(2),
above, and all stock options granted to the Employee shall  immediately vest. In
the event that  Employee  voluntarily  resigns his  employment  with the Company
following the date of the Sale, Section L(3) shall not apply; however,  Employee
shall be entitled to receive the payments (subject to his executing the release)
provided  for under  Section L(2) above,  except that (i) Employee  shall not be
entitled to receive any bonus for the year in which he resigns,  and (ii) in the
event that the Employee  secures  other  employment,  all  payments  made to him
pursuant  to the  provision  of Section L (2) shall be  reduced  by the  amounts
received  by him shall be reduced  by the  amount,  if any,  that  Employee  may
receive in connection with such other employment.

     M.  Validity.  If  any  provision  contained  in  this  Agreement,  or  the
application of any  provision,  is held invalid or  unenforceable  by a court of
competent jurisdiction, that provision will be deemed to be modified in a manner
to make it  consistent  with the intent of the  original  provision,  so that as
revised,  the provision will be valid and enforceable,  and this Agreement,  and
the  application of the provision to persons or  circumstances  other than those
for which it would be  invalid or  unenforceable,  will not be  affected  by the
revision.

     N. Binding Nature of Agreement.  This  Agreement  shall be binding upon and
inure to the  benefit of Company  and its  successors  and  assigns and shall be
binding upon Employee, heirs and legal representatives.

     O. Construction. Words and phrases defined in the plural shall also be used
in the  singular  and vice versa and be  construed  in the plural or singular as
appropriate  and apparent in the context  used.  Unless  otherwise  specifically
provided  herein,  accounting  terms  shall be given and  assigned  their  usual
meaning and effect as defined.

     P.  Paragraph  Headings.  The paragraph  headings in this Agreement are for
convenience  only;  they form no part of this Agreement and shall not affect its
interpretation.

     Q. Notices. All notices,  request, demands and other communication required
or  permitted  under this  Agreement  shall be in  writing.  Addresses  for such
parties are as set forth below:

     If to the Employee:

     Mr. Richard A. Kurtz
     1280 Sunset Road
     Ann Arbor, Michigan 48103


     If to the Company:

     Advanced Photonix, Inc.
     1240 Avenida Acaso
     Camarillo, CA  93012
     Attention:  President
     Fax (805) 484-9935

     With a copy to:

     Dornbush Mensch Mandelstam & Schaeffer, LLP
     747 Third Avenue
     New York, NY 10017
     Attention: Landey Strongin, Esq.


     R. Governing Law and Attorneys'  Fees. This Agreement shall be governed by,
and construed in accordance  with,  the domestic laws of the State of California
without reference to the conflicts of laws provisions  thereof.  In the event of
any action at law or suit in equity in relation to this Agreement the prevailing
party in such action or suit shall be entitled  to receive its  attorneys'  fees
and all other costs and expenses of such action or suit.

     S.  Submission  to  Jurisdiction  and  Venue.  The  parties  hereto  hereby
irrevocably and unconditionally  each submits for itself and its property in any
legal action or proceeding  relating to this  Agreement,  or for recognition and
enforcement  of any  judgment  in  respect  thereof,  to the  exclusive  general
jurisdiction  of the State of  California  and its  courts and the courts of the
United States of America for the District of California;  consents that any such
action or proceeding  shall be brought in such courts,  and waives any objection
that it may now or hereafter  have to the venue of any such action or proceeding
in any  such  court  or  that  such  action  or  proceeding  was  brought  in an
inconvenient  court and agrees not to plead or claim the same;  and agrees  that
nothing  herein shall affect the right to effect service of process in any other
manner permitted by law.

     T.  Parties in  Interest.  Nothing in this  Agreement,  whether  express or
implied, is intended to confer any rights or remedies under or by reason of this
Agreement  on any  persons  other than the  parties  to it and their  respective
successors and assigns, nor is anything in this Agreement intended to relieve or
discharge the  obligation or liability of any third persons to any party to this
Agreement,  nor  shall  any  provision  given  any  third  persons  any right of
subrogation or action over or against any party to this Agreement.

     U.  Counterparts.   This  Agreement  may  be  executed  in  any  number  of
counterparts, each of which shall be an original, but such counterparts together
shall constitute one and the same instrument.

     V. Entire  Agreement.  This Agreement  supersedes  all previous  agreements
between  Employee  and  the  Company,  contains  the  entire  understanding  and
agreement  between the parties  regarding  the  Employee's  employment  with the
Company.  This Agreement cannot not be amended,  modified or supplemented in any
respect except by subsequent  written  agreement  signed by both the Company and
Employee.

                                                   ADVANCED PHOTONIX, INC.



                                            By: /s/ Paul Ludwig
                                                -------------------------------
                                                Paul Ludwig, President


/s/ Richard Kurtz
-------------------------------
Richard Kurtz