Document:

EMPLOYMENT AGREEMENT

         AGREEMENT,  dated as of the 5th day of  September,  2000 by and between
TII INDUSTRIES, INC., a Delaware corporation, having a place of business at 1385
Akron Street,  Copiague, New York 11726 (hereinafter  designated and referred to
as "Company"),  and Kenneth A. Paladino  residing at 11 Celano Lane, West Islip,
New York 11795 (hereinafter designated and referred to as "Employee" or "him" ).

         WHEREAS,  Company  desires to employ the  Employee  as Vice  President,
Finance, Chief Financial Officer of the Company; and

         WHEREAS,  the Employee is willing to continue  such  employment  by the
Company, all in accordance with provisions hereinafter set forth;

         NOW THEREFORE,  in  consideration  of the promises and mutual covenants
herein contained the parties hereto agree as follows:

         1. Term: The term of this Agreement  shall be for a period of three (3)
years commencing September 5, 2000 and automatically terminating on September 4,
2003,  subject to earlier  termination as provided  herein or unless extended by
mutual  consent of both  parties in writing  sixty (60) days prior to the end of
the term of this  Agreement or any extension  thereof,  but nothing herein shall
require the Company or Employee to agree to any specific term or condition or to
any  continuation  of Employee's  employment  beyond the end of the term of this
Agreement.

         2.  Employment:  Subject  to the  terms  and  conditions  and  for  the
compensation  hereinafter  set forth,  the Company  employs the Employee for and
during the term of this Agreement. Employee is hereby employed by the Company as
Vice  President,  Finance,  Chief  Financial  Officer.  The Employee does hereby
accept  such  employment  and agrees to use his best  efforts  and to devote all
normal business time,  during the term of this Agreement,  to the performance of
his duties  faithfully,  diligently  and to the best of his  abilities  upon the
conditions  hereinafter set forth. Employee shall report to the President/CEO or
his designee.  Employee's  primary place of work shall be Long Island,  New York
and  Employee  agrees to spend such time,  from time to time,  at the

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Company's  other  facilities and to visit  customers,  and vendors,  and various
industry  associations as required to fulfill his duties and responsibilities as
contemplated herein.

         3. Compensation:  During the term of this Agreement, the Company agrees
to pay  Employee,  and Employee  agrees to accept,  annual salary of One Hundred
Ninety  Thousand  Dollars  ($190,000.00)  payable  every  two  weeks,  less  all
applicable  taxes, for all services rendered by Employee  hereunder.  Employee's
annual salary shall be reviewed at the end of each year of employment  hereunder
and shall  receive an  increase  as  determined  by the  Company's  Compensation
Committee of the Board of  Directors,  unless  financial  factors of the Company
deem  otherwise as determined by the President.  In addition,  Employee shall be
eligible to participate in the Company's Executive Bonus Plan, as adopted by the
Company's Compensation Committee of the Board of Directors.

         4. Option:  The Company will extend to Employee a ten year stock option
for  75,000  shares  of  Common  Stock of the  Company  in  accordance  with the
Company's 1998 Stock Option Plan, subject to stockholder's approval at Company's
next annual stockholders'  meeting,  exercisable at the rate of 20% on the first
anniversary  of the  stock  option  agreement  and 20% on each of the next  four
anniversaries  thereafter during the Employee's employment with the Company. The
option  will be  exercisable  at the market  price of such  shares on the day of
grant.  The options  will be subject to all of the terms and  conditions  of the
Plan and Employee hereby agrees to all such terms and conditions.

         5. 401K Plan:  The Employee may enroll in the Company's  401K Plan upon
meeting eligibility requirements.

         6. Expenses:

         The Company shall reimburse Employee,  not less often than monthly, for
all reasonable and actual business  expenses  incurred by him in connection with
his service to the Company,  upon submission of appropriate vouchers and expense
account reports.

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         7. Company Car: The Company shall  provide  Employee with a Company car
[monthly  lease  payments  shall not exceed  approximately  Six Hundred  Dollars
($600.00)] for Employee's use for business  purposes in accordance with standard
Company  guidelines.  This car shall be insured  and  registered  with the Motor
Vehicle   Department  by  the  Company.   Employee  is  responsible  for  proper
maintenance,  gasoline,  traffic  violation  fines,  etc. Repairs for other than
routine maintenance shall be the responsibility of the Company.

         8. Benefits: The Company shall provide medical and dental insurance and
such other benefits, in accordance with the applicable Company benefit plans, as
such plans may exist from time to time. The Employee shall be entitled to annual
vacation in accordance with the Company's policy.

         9. Extent of Service:  The Employee  during the term of this  Agreement
shall devote his full normal business time,  attention and energy and render his
best efforts and skill to the business of the Company.

         10. Restrictive Covenant:

          [A] Employee  acknowledges that: (i) the business in which the Company
is engaged is intensely  competitive and that his employment by the Company will
require that he have access to and knowledge of confidential  information of the
Company,  including,  but not limited to, certain of the Company's  confidential
plans for the creation, acquisition or disposition of products, expansion plans,
product development plans, methods of pricing, special customer requirements for
service,   information  on  methods  of  servicing  the  customer,   operational
information  such  as  formulas,  financial  status,  and  plans  and  personnel
information,  which are of vital  importance  to the  success  of the  Company's
business,  and are "trade  secrets" of the Company;  (ii) the direct or indirect
disclosure  of any  such  confidential  information  to  existing  or  potential
competitors of the Company would place the Company at a competitive disadvantage
and would cause damage,  financial and otherwise, to the Company's business; and
(iii)

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by his training,  experience and expertise,  some of his services to the Company
will be special and unique.

         Employee  understands  and agrees that such trade  secrets  give or may
give  the  Company  a  significant   competitive  advantage.   Employee  further
recognizes that the success of the Company depends on keeping  confidential both
the  trade  secrets  already   developed  or  to  be  acquired  and  any  future
developments of trade secrets.  Employee  understands  that in his capacity with
the Company he will be entrusted  with  knowledge of such trade  secrets and, in
recognition of the importance  thereof and in consideration of his employment by
the  Company  hereunder,  agrees  that he will not,  without  the consent of the
President/CEO in writing,  make any disclosure of trade secrets now or hereafter
possessed  by the  Company to any  person,  partnership,  corporation  or entity
either  during or after the term  hereunder,  except  to such  employees  of the
Company or its  subsidiaries  or affiliates,  if any, as may be necessary in the
regular  course of business and except as may be required  pursuant to any court
order, judgment or decision from any court of competent jurisdiction or if after
disclosure to Employee,  such  information  becomes,  but not as a result of any
inaction or action of Employee, part of the public knowledge or literature.  The
provisions  of this  Section  10 [A] shall  continue  in full  force and  effect
notwithstanding any termination of this Agreement.

         [B]  Employee  agrees that during the term of his  employment  with the
Company  and for a  period  of one  year  thereafter  he will  not  directly  or
indirectly become affiliated as an officer, director,  employee or consultant or
as a substantial security holder with any other company or entity whose business
is directly or  indirectly  competitive  with any business then being planned or
conducted  by the Company or its  divisions  and  subsidiaries.  For the purpose
hereof,  "substantial  security  holder"  shall  mean  ownership,   directly  or
indirectly,  of  more  than  3% of any  class  of  securities  of a  company  or
partnership  interest in any  partnership or  indebtedness of any such entity in
excess of $25,000.  The provisions of this Section 10 [B] shall continue in full
force and effect notwithstanding any termination of this Agreement.

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         11.  Discoveries, etc.:

         [A] The Company shall be the owner,  without further  compensation,  of
all  rights  of  every  kind in and  with  respect  to any  reports,  materials,
inventions, processes,  discoveries,  improvements,  modifications,  know-how or
trade  secrets  hereafter  made,  prepared,  invented,   discovered,   acquired,
suggested  or reduced to practice  (hereinafter  designated  and  referred to as
"Property Rights") by Employee in connection with Employee's  performance of his
duties pursuant to this Agreement,  and the Company shall be entitled to utilize
and dispose of such in such manner as it may determine.

         [B]  The  Employee  agrees  to  and  shall  promptly  disclose  to  the
President/CEO  or his designee all Property  Rights  (whether or not patentable)
made,  discovered  or conceived  of by him , alone or with  others,  at any time
during his employment with the Company, whether on the Company's or his own time
and irrespective of whether on or off the Company's premises, provided only that
such Property Rights (1) relate to or are useful in any phase of the business in
which the Company may be engaged during the period of employment,  or (2) relate
to any subject matter or problems within the scope of Employee's employment,  or
(3)  relate  to or  involve  the use of any data or  information  of  which  the
Employee  has been or may  become  informed  by  reason of  employment  with the
Company. The Employee hereby appoints the Company as Employee's attorney-in-fact
to execute  in  accordance  with the laws of any  country  patent  applications,
assignments or other documents considered necessary or desirable by the Company.
Any such Property Rights will be the sole and exclusive property of the Company,
and Employee will execute any assignments requested by the Company of his right,
title  or  interest  in any such  Property  Rights  without  further  demand  or
consideration, and, in addition, the Employee will also provide the Company with
any other  instruments or documents  requested by the Company,  at the Company's
expense,  as may be necessary or desirable in applying for and obtaining patents
with  respect  thereto  in the  United  States and all  foreign  countries.  The
Employee also agrees to cooperate with the Company in the prosecution or defense
of any patent claims or litigation or proceedings  involving  inventions,  trade
secrets,   trademarks,   service  marks,   secret   processes,   discoveries  or
improvements, during his employment by the Company. Employee's cooperation after
his  employment  is  subject  to his  availability  and the  Company  agrees  to
reimburse  Employee  for loss of income  and

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expenses  incurred  in  connection  therewith.  Said  cooperation  shall  not be
withheld by Employee.

         12. Confidential Information: Employee recognizes and acknowledges that
the  Company,  through the  expenditure  of  considerable  time and money,  will
acquire, has developed and will continue to develop in the future,  information,
skills, confidential information,  know-how,  formulae,  technical expertise and
methods  relating to or forming part of the Company's  services and products and
conduct of its business, and that the same are confidential and proprietary, and
are "trade  secrets" of the Company.  Employee  understands and agrees that such
trade secrets give or may give the Company a significant  competitive advantage.
Employee  further  recognizes that the success of the Company depends on keeping
confidential  both the trade secrets already developed or to be acquired and any
future developments of trade secrets.  Employee understands that in his capacity
with the Company he will be entrusted  with knowledge of such trade secrets and,
in recognition of the importance  thereof and in consideration of his employment
by the Company  hereunder,  agrees that he will not,  without the consent of the
President/CEO in writing,  make any disclosure of trade secrets now or hereafter
possessed  by the  Company to any  person,  partnership,  corporation  or entity
either  during or after the term  hereunder,  except  to such  employees  of the
Company or its  subsidiaries  or affiliates,  if any, as may be necessary in the
regular  course of business and except as may be required  pursuant to any court
order,  judgment or decision  from any court of  competent  jurisdiction,  or if
after disclosure to Employee,  such information  becomes, but not as a result of
any inaction or action of Employee,  part of the public knowledge or literature.
The  provisions  of this  Section  shall  continue  in  full  force  and  effect
notwithstanding any termination of the Agreement.

         13.  Irreparable  Harm:  Employee  agrees that any breach or threatened
breach by Employee of provisions set forth in Section Ten (10),  Eleven (11) and
Twelve (12) of this Agreement,  would cause the Company irreparable harm and the
Company may obtain injunctive  relief against such actual or threatened  conduct
and without the necessity of a bond.

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         14.  Return of Company  Property:  Employee  agrees that  following the
termination of his  employment  for any reason,  he shall return all property of
the Company which is then in or thereafter comes into his possession, including,
but not  limited  to,  documents,  contracts,  agreements,  plans,  photographs,
customer lists, books, notes,  electronically  stored data and all copies of the
foregoing as well as any other materials or equipment supplied by the Company to
the Employee.

         15.  Termination:

         [A] Death: In the event of the Employee's  death during the term of his
employment,  this Agreement shall automatically  terminate on the date of death,
and  Employee's  estate shall be entitled to payment of Employee's  salary until
date of death.  All other  benefits  and  compensation  described  herein  shall
terminate on the date of death unless  otherwise  stipulated  in the  applicable
Company plan.

         [B]  Disability:  In the event the  Employee,  by reason of physical or
mental  incapacity,  shall  be  disabled  for a  period  of  at  least  two  (2)
consecutive months or three (3) months in the aggregate in any twelve (12) month
period of this  Agreement or any  extension  hereof,  the Company shall have the
option  at  any  time  thereafter  to  terminate  Employee's  employment  and to
terminate this Agreement.  Such  termination to be effective ten (10) days after
the Company gives written notice of such  termination  to the Employee,  and all
obligations  of the  Company  hereunder  shall  cease  upon  the  date  of  such
termination  unless  otherwise  stipulated  in  the  appropriate  Company  plan.
"Incapacity"  as used herein shall mean the inability of the Employee to perform
his normal duties.

         [C]  Company's Rights to Terminate This Agreement:

                  [a] The Company shall have the right, before the expiration of
the term of this  Agreement and during any extension  hereof,  to terminate this
Agreement and to discharge  Employee for cause  (hereinafter  "Cause"),  and all
compensation  to Employee  shall cease to accrue upon  discharge of the Employee
for Cause.  For the purposes of this Agreement,  the term "Cause" shall mean the
Employee's  (I) violation of the Company's  written  policy or specific  written
directions of the President or his  designee,  and/or Board of Directors,  which
directions are consistent  with normally  acceptable

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<PAGE>

business  practices  or the  failure to  observe,  or the  failure or refusal to
perform  any  obligations  required  to be  performed  in  accordance  with this
Agreement,  (ii) if the  President  determines  that  Employee  has  committed a
demonstrable  act (or  omission) of  malfeasance  seriously  detrimental  to the
Company  (which  shall not  include any  exercise  of business  judgment in good
faith).

                  [b] If the Company elects to terminate  Employee's  employment
for Cause,  the Company shall first give Employee written notice and a period of
ten (10) days to cure such Cause, and if such Cause is not cured in said ten (10
) days,  such  termination  shall be  effective  five (5) days after the Company
gives written notice of such failure to cure to the Employee.  In the event of a
termination  of the  Employee's  employment  for  Cause in  accordance  with the
provisions of Section 15[C][b],  the Company shall have no further obligation to
the  Employee,  except  for the  payment  of  salary  through  the  date of such
termination from employment.

                  [c]   Notwithstanding   anything  in  this  Agreement  to  the
contrary,  the Company may terminate the Employee's employment for reasons other
than Cause.

         [D]  Employee's Right to Terminate This Agreement:

                  [a] If the Company  elects to (i) reduce in rank or  authority
the  Employee's  duties  under  this  Agreement,  or (ii) move the  location  of
Employee's  primary place of work, without the mutual agreement of the Employee,
the Employee  shall first give Company  written  notice and a period of ten (10)
days to cure same,  and if same is not cured in said ten (10) days  Employee may
terminate  this  Agreement  effective  five (5) days  after the  Employee  gives
written notice of such failure to cure.

         [E] Severance:  In the event the Employee's  employment hereunder shall
be terminated by the Company for other than Cause,  death or  disability,  or by
the Employee pursuant to Section 15 [D] hereof, (1) the Employee shall thereupon
receive as severance  pay in a lump sum the amount of  Compensation  pursuant to
Section 3 hereof which the Employee would have received for a one year period of
time; and (2) the Employee's (and his dependents')  participation in any medical
and dental insurance plans shall be continued,  or equivalent  benefits provided
to him or them by the  Company,  at no cost to him or them,  for a period of one
year from the  termination;  and (3) any options  granted to the Employee  which
have not, by the terms of the options, vested, shall be deemed to have vested at
the  termination of  employment,  and

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shall  thereafter  be  exercisable  for the maximum  period of time  allowed for
exercise thereof under the terms of the applicable Company stock option plan(s),
provided that such period shall not exceed 90 days following  such  termination.
An election by the Employee to terminate his employment  under the provisions of
Section 15[D] shall not be deemed a voluntary  termination  of employment of the
Employee for the purpose of interrupting  the provisions of any of the Company's
employee benefits plans, programs or policies.

         16. Waiver:  Any waiver by either party of a breach of any provision of
this  Agreement  shall not operate as or be  construed  as a waiver of any other
breach or default hereof.

         17.  Governing  Law:  The  validity of this  Agreement or of any of the
provisions  hereof shall be  determined  under and  according to the laws of the
State of New York,  and this  Agreement  and its  provisions  shall be construed
according to the laws of the State of New York,  without reference to its choice
of law rules.

         18. Notice:  Any notice required to be given pursuant to the provisions
of this  Agreement  shall  be in  writing  and by  facsimile  or  registered  or
certified mail or equivalent (i.e., Federal Express) and mailed to the following
addresses:

                  Company:          TII Industries, Inc.
                                    1385 Akron Street
                                    Copiague, New York  11726
                                    Attention:  Timothy J. Roach
                                                President/CEO

                  Employee:         Kenneth A. Paladino
                                    11 Celano Lane
                                    West Islip, NY  11795

         19.  Assignment:  The  Employee's  assignment of this  Agreement or any
interest  herein,  or any  monies  due or to  become  due by reason of the terms
hereof,  without the prior written  consent of the Company  shall be void.  This
Agreement  shall be assignable  and binding to a corporation  or other  business
entity that succeeds to all or substantially  all of the business of the Company
through merger, consolidation, corporate reorganization or by acquisition of all
or  substantially

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all of the assets of the Company and which assumes  Company's  obligations under
this Agreement.

         20.  Miscellaneous:  This Agreement  contains the entire  understanding
between the parties hereto and supersedes all other oral and written  agreements
or understandings  between them. No modification or addition hereto or waiver or
cancellation  of any provision  shall be valid except by a writing signed by the
party to be charged therewith.

         21. Obligations of a Continuing Nature: It is expressly  understood and
agreed that the covenants,  agreements and restrictions undertaken by or imposed
on  either  party  hereunder,  which  are  stated  to  exist or  continue  after
termination of Employee's employment with the Company,  shall exist and continue
on both parties  irrespective of the method or circumstances of such termination
from employment or termination of this Agreement.

         22.  Severability:  Employee  agrees  that  if any  of  the  covenants,
agreements or restrictions on the part of Employee are held to be invalid by any
court of competent  jurisdiction,  such holding will not  invalidate  any of the
other  covenants,  agreements  and/or  restrictions  herein  contained  and such
invalid  provisions  shall  be  severable  so that  the  invalidity  of any such
provision shall not invalidate any others.  Moreover,  if any one or more of the
provisions  contained in this Agreement shall be held to be excessively broad as
to duration, activity or subject, such provisions shall be construed by limiting
and  reducing  them so as to be  enforceable  to the maximum  extent  allowed by
applicable law.

         23.  Representation:  Employee  represents and warrants that he has the
legal  right to enter into this  Agreement  and to perform all of the duties and
obligations on his part to be performed  hereunder in accordance  with its terms
and that he is not a party to any agreement or  understanding,  written or oral,
which  prevents  Employee from entering into this Agreement or performing all of
his  duties  and  obligations  hereunder.

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<PAGE>

In the event of a breach of such  representation  or  warranty on his part or if
there is any other legal  impediment  which prevents him from entering into this
Agreement or performing all of his duties and obligations hereunder, the Company
shall have the right to  terminate  this  Agreement in  accordance  with Section
15[C] [a]. Without limiting the foregoing, Employee represents and warrants that
he is not a party to any  agreement  which  prohibits  or limits his  ability to
fulfill his duties and responsibilities contemplated herein.

         24. Descriptive  Headings:  The paragraph headings contained herein are
for  reference  purposes  only and shall not in any way  affect  the  meaning or
interpretation of this Agreement.

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

                                      TII INDUSTRIES, INC.

                                      By:   /s/ Timothy J. Roach
                                          -----------------------------
                                               Timothy J. Roach
                                               President, CEO and
                                               Vice Chairman of the Board

                     Employee:

                                          /s/ Kenneth A. Paladino
                                      ---------------------------------
                                               Kenneth A. Paladino

                                       11EMPLOYMENT AGREEMENT

         AGREEMENT,  dated as of the 30th day of June,  2000 by and  between TII
INDUSTRIES,  INC.,  a Delaware  corporation,  having a place of business at 1385
Akron Street,  Copiague, New York 11726 (hereinafter  designated and referred to
as "Company"),  and Thomas J. Guzek residing at 16261 Berry View Court, Ballwin,
MO 63011 (hereinafter designated and referred to as "Employee" or "him" ).

         WHEREAS,  Company  desires to employ the  Employee  as  Executive  Vice
President, Chief Marketing Officer of the Company; and

         WHEREAS,  the Employee is willing to continue  such  employment  by the
Company, all in accordance with provisions hereinafter set forth;

         NOW THEREFORE,  in  consideration  of the promises and mutual covenants
herein contained the parties hereto agree as follows:

         1. Term: The term of this Agreement  shall be for a period of three (3)
years  commencing July 1, 2000 and  automatically  terminating on June 30, 2003,
subject to earlier  termination as provided  herein or unless extended by mutual
consent of both parties in writing  sixty (60) days prior to the end of the term
of this Agreement or any extension thereof, but nothing herein shall require the
Company  or  Employee  to  agree to any  specific  term or  condition  or to any
continuation  of  Employee's  employment  beyond  the  end of the  term  of this
Agreement.

         2.  Employment:  Subject  to the  terms  and  conditions  and  for  the
compensation  hereinafter  set forth,  the Company  employs the Employee for and
during the term of this Agreement. Employee is hereby employed by the Company as
Executive Vice  President,  Chief  Marketing  Officer.  The Employee does hereby
accept  such  employment  and agrees to use his best  efforts  and to devote all
normal business time,  during the term of this Agreement,  to the performance of
his duties  faithfully,  diligently  and to the best of his  abilities  upon the
conditions  hereinafter set forth. Employee shall report to the President/CEO or
his designee.  Employee's primary place of work shall be Copiague,  New York and
Employee  agrees to spend such time,  from time to time, at the Company's  other
facilities  and  to  visit   customers,   and  vendors,   and  various  industry
associations  as  required  to  fulfill  his  duties  and   responsibilities  as
contemplated herein.

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<PAGE>

         3. Compensation:  During the term of this Agreement, the Company agrees
to pay  Employee,  and Employee  agrees to accept,  annual salary of Two Hundred
Thousand  Dollars  ($200,000.00)  payable every two weeks,  less all  applicable
taxes, for all services rendered by Employee hereunder. Employee's annual salary
shall be  reviewed  at the end of each year of  employment  hereunder  and shall
receive an increase as determined by the Company's Compensation Committee of the
Board of Directors,  unless  financial  factors of the Company deem otherwise as
determined  by the  President.  In  addition,  Employee  shall  be  eligible  to
participate in the Company's  Executive  Bonus Plan, as adopted by the Company's
Compensation  Committee  of the Board of  Directors,  after  the  first  year of
Employee's employment with the Company.

         4. Bonus:  To compensate  the Employee for the bonus he will forfeit by
leaving  his  current  position  before  that bonus is  payable  by his  current
employer,  TII will pay to Employee Fifty Thousand Dollars  ($50,000),  less all
applicable taxes,  within the first month of Employee's  employment with TII. At
the end of the Employee's first year of Employee's  employment with the Company,
the Company will pay the Employee an additional  bonus of Fifty Thousand Dollars
($50,000),  less all applicable taxes. Should Employee voluntarily terminate his
employment  with TII before his first  anniversary,  any monies paid to Employee
under this provision will be returned to TII.

         5. Option:  The Company will extend to Employee a ten year stock option
for  100,000  shares of  Common  Stock of the  Company  in  accordance  with the
Company's 1998 Stock Option Plan,  exercisable at the rate of 33.3% on the first
anniversary  of the  stock  option  agreement  and 33.3% on each of the next two
anniversaries  thereafter during the Employee's employment with the Company. The
option  will be  exercisable  at the market  price of such  shares on the day of
grant.  The options  will be subject to all of the terms and  conditions  of the
Plan and Employee hereby agrees to all such terms and conditions.

         6. 401K Plan:  The Employee may enroll in the Company's  401K Plan upon
meeting eligibility requirements.

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<PAGE>

         7.  Expenses:

         The Company shall reimburse Employee,  not less often than monthly, for
all reasonable and actual business  expenses  incurred by him in connection with
his service to the Company,  upon submission of appropriate vouchers and expense
account reports.

         8. Company Allowance: The Company shall provide Employee with a monthly
car allowance of Seven Hundred, Fifty Dollars ($750.00).

         9.  Apartment  Allowance:  The Company  shall  provide  Employee with a
monthly  apartment  allowance of Five Hundred  Dollars  ($500.00) until Employee
relocates to New York.

         10.  Relocation  Expense:  The  Company  shall  assist the  Employee in
relocating to New York.  Such  assistance will include van shipment of household
and personal  goods,  travel  expenses,  as specified  hereafter,  and legal and
closing  expenses in  acquisition  of a dwelling.  The  Company  will  reimburse
Employee  transportation,  lodging  and  meals  for two  trips  for  spouse  and
dependent  children to the New York area for house  searching.  The Company will
reimburse Employee transportation,  lodging and meals for five trips between the
Company's  New York  location and  Employee's  current home for himself prior to
Employee's relocation to New York.

         11.  Benefits:  The Company shall provide medical and dental  insurance
and such other  benefits,  in accordance  with the  applicable  Company  benefit
plans, as such plans may exist from time to time. The Employee shall be entitled
to annual vacation in accordance with the Company's policy.

         12. Extent of Service:  The Employee  during the term of this Agreement
shall devote his full normal business time,  attention and energy and render his
best efforts and skill to the business of the Company.

                                       3
<PAGE>

         13.  Restrictive Covenant:

          [A] Employee  acknowledges that: (i) the business in which the Company
is engaged is intensely  competitive and that his employment by the Company will
require that he have access to and knowledge of confidential  information of the
Company,  including,  but not limited to, certain of the Company's  confidential
plans for the creation, acquisition or disposition of products, expansion plans,
product development plans, methods of pricing, special customer requirements for
service,   information  on  methods  of  servicing  the  customer,   operational
information  such  as  formulas,  financial  status,  and  plans  and  personnel
information,  which are of vital  importance  to the  success  of the  Company's
business,  and are "trade  secrets" of the Company;  (ii) the direct or indirect
disclosure  of any  such  confidential  information  to  existing  or  potential
competitors of the Company would place the Company at a competitive disadvantage
and would cause damage,  financial and otherwise, to the Company's business; and
(iii) by his training,  experience  and  expertise,  some of his services to the
Company will be special and unique.

         Employee  understands  and agrees that such trade  secrets  give or may
give  the  Company  a  significant   competitive  advantage.   Employee  further
recognizes that the success of the Company depends on keeping  confidential both
the  trade  secrets  already   developed  or  to  be  acquired  and  any  future
developments of trade secrets.  Employee  understands  that in his capacity with
the Company he will be entrusted  with  knowledge of such trade  secrets and, in
recognition of the importance  thereof and in consideration of his employment by
the  Company  hereunder,  agrees  that he will not,  without  the consent of the
President/CEO in writing,  make any disclosure of trade secrets now or hereafter
possessed  by the  Company to any  person,  partnership,  corporation  or entity
either  during or after the term  hereunder,  except  to such  employees  of the
Company or its  subsidiaries  or affiliates,  if any, as may be necessary in the
regular  course of business and except as may be required  pursuant to any court
order,  judgment  or  decision  from any court of  competent  jurisdiction.  The
provisions  of this  Section  13[A]  shall  continue  in full  force and  effect
notwithstanding any termination of this Agreement.

         [B]  Employee  agrees that during the term of his  employment  with the
Company  and for a  period  of two  years  thereafter  he will not  directly  or
indirectly become affiliated as an officer, director,  employee or consultant or
as a substantial security

                                       4
<PAGE>

holder with any other company or entity whose business is directly or indirectly
competitive  with any business then being planned or conducted by the Company or
its divisions and subsidiaries.  For the purpose hereof,  "substantial  security
holder" shall mean  ownership,  directly or  indirectly,  of more than 3% of any
class of securities of a company or partnership  interest in any  partnership or
indebtedness  of any such entity in excess of $25,000.  The  provisions  of this
Section  13[B]  shall  continue  in full  force and effect  notwithstanding  any
termination of this Agreement.

         14.  Discoveries, etc.:

         [A] The Company shall be the owner,  without further  compensation,  of
all  rights  of  every  kind in and  with  respect  to any  reports,  materials,
inventions, processes,  discoveries,  improvements,  modifications,  know-how or
trade  secrets  hereafter  made,  prepared,  invented,   discovered,   acquired,
suggested  or reduced to practice  (hereinafter  designated  and  referred to as
"Property Rights") by Employee in connection with Employee's  performance of his
duties pursuant to this Agreement,  and the Company shall be entitled to utilize
and dispose of such in such manner as it may determine.

         [B]  The  Employee  agrees  to  and  shall  promptly  disclose  to  the
President/CEO  or his designee all Property  Rights  (whether or not patentable)
made,  discovered  or conceived  of by him , alone or with  others,  at any time
during his employment with the Company, whether on the Company's or his own time
and irrespective of whether on or off the Company's premises, provided only that
such Property Rights (1) relate to or are useful in any phase of the business in
which the Company may be engaged during the period of employment,  or (2) relate
to any subject matter or problems within the scope of Employee's employment,  or
(3)  relate  to or  involve  the use of any data or  information  of  which  the
Employee  has been or may  become  informed  by  reason of  employment  with the
Company. The Employee hereby appoints the Company as Employee's attorney-in-fact
to execute  in  accordance  with the laws of any  country  patent  applications,
assignments or other documents considered necessary or desirable by the Company.
Any such Property Rights will be the sole and exclusive property of the Company,
and Employee will execute any assignments requested by the Company of his right,
title  or  interest  in any such  Property  Rights  without  further  demand  or
consideration, and, in addition, the Employee will also provide the Company with
any other  instruments or documents  requested by the Company,  at the Company's

                                       5
<PAGE>

expense,  as may be necessary or desirable in applying for and obtaining patents
with  respect  thereto  in the  United  States and all  foreign  countries.  The
Employee also agrees to cooperate with the Company in the prosecution or defense
of any patent claims or litigation or proceedings  involving  inventions,  trade
secrets,   trademarks,   service  marks,   secret   processes,   discoveries  or
improvements, during his employment by the Company. Employee's cooperation after
his  employment  is  subject  to his  availability  and the  Company  agrees  to
reimburse  Employee  for loss of income  and  expenses  incurred  in  connection
therewith. Said cooperation shall not be withheld by Employee.

         15. Confidential Information: Employee recognizes and acknowledges that
the  Company,  through the  expenditure  of  considerable  time and money,  will
acquire, has developed and will continue to develop in the future,  information,
skills, confidential information,  know-how,  formulae,  technical expertise and
methods  relating to or forming part of the Company's  services and products and
conduct of its business, and that the same are confidential and proprietary, and
are "trade  secrets" of the Company.  Employee  understands and agrees that such
trade secrets give or may give the Company a significant  competitive advantage.
Employee  further  recognizes that the success of the Company depends on keeping
confidential  both the trade secrets already developed or to be acquired and any
future developments of trade secrets.  Employee understands that in his capacity
with the Company he will be entrusted  with knowledge of such trade secrets and,
in recognition of the importance  thereof and in consideration of his employment
by the Company  hereunder,  agrees that he will not,  without the consent of the
President/CEO in writing,  make any disclosure of trade secrets now or hereafter
possessed  by the  Company to any  person,  partnership,  corporation  or entity
either  during or after the term  hereunder,  except  to such  employees  of the
Company or its  subsidiaries  or affiliates,  if any, as may be necessary in the
regular  course of business and except as may be required  pursuant to any court
order,  judgment  or  decision  from any court of  competent  jurisdiction.  The
provisions   of  this   Section   shall   continue  in  full  force  and  effect
notwithstanding any termination of the Agreement.

                                       6
<PAGE>

         16.  Irreparable  Harm:  Employee  agrees that any breach or threatened
breach by Employee of provisions set forth in Section  Thirteen  (13),  Fourteen
(14) and Fifteen  (15) of this  Agreement,  would cause the Company  irreparable
harm and the  Company  may  obtain  injunctive  relief  against  such  actual or
threatened conduct and without the necessity of a bond.

         17.  Return of Company  Property:  Employee  agrees that  following the
termination of his  employment  for any reason,  he shall return all property of
the Company which is then in or thereafter comes into his possession, including,
but not  limited  to,  documents,  contracts,  agreements,  plans,  photographs,
customer lists, books, notes,  electronically  stored data and all copies of the
foregoing as well as any other materials or equipment supplied by the Company to
the Employee.

         18.  Termination:

         [A] Death: In the event of the Employee's  death during the term of his
employment,  this Agreement shall automatically  terminate on the date of death,
and  Employee's  estate shall be entitled to payment of Employee's  salary until
date of death.  All other  benefits  and  compensation  described  herein  shall
terminate on the date of death unless  otherwise  stipulated  in the  applicable
Company plan.

         [B]  Disability:  In the event the  Employee,  by reason of physical or
mental  incapacity,  shall  be  disabled  for a  period  of  at  least  two  (2)
consecutive months or three (3) months in the aggregate in any twelve (12) month
period of this  Agreement or any  extension  hereof,  the Company shall have the
option  at  any  time  thereafter  to  terminate  Employee's  employment  and to
terminate this Agreement.  Such  termination to be effective ten (10) days after
the Company gives written notice of such  termination  to the Employee,  and all
obligations  of the  Company  hereunder  shall  cease  upon  the  date  of  such
termination  unless  otherwise  stipulated  in  the  appropriate  Company  plan.
"Incapacity"  as used herein shall mean the inability of the Employee to perform
his normal duties.

         [C]  Company's Rights to Terminate This Agreement:

                  [a] The Company shall have the right, before the expiration of
the term of this  Agreement and during any extension  hereof,  to terminate this
Agreement and to discharge  Employee for cause  (hereinafter  "Cause"),  and all
compensation  to

                                       7
<PAGE>

Employee shall cease to accrue upon discharge of the Employee for Cause. For the
purposes of this  Agreement,  the term  "Cause"  shall mean the  Employee's  (I)
violation of the Company's written policy or specific written  directions of the
President or his  designee,  and/or Board of  Directors,  which  directions  are
consistent  with  normally  acceptable  business  practices  or the  failure  to
observe,  or the  failure or refusal to perform any  obligations  required to be
performed in accordance  with this Agreement,  (ii) if the President  determines
that Employee has  committed a  demonstrable  act (or  omission) of  malfeasance
seriously  detrimental  to the Company  (which shall not include any exercise of
business judgment in good faith).

                  [b] If the Company elects to terminate  Employee's  employment
for Cause,  the Company shall first give Employee written notice and a period of
ten (10) days to cure such Cause, and if such Cause is not cured in said ten (10
) days,  such  termination  shall be  effective  five (5) days after the Company
gives written notice of such failure to cure to the Employee.  In the event of a
termination  of the  Employee's  employment  for  Cause in  accordance  with the
provisions of Section 18[C][b],  the Company shall have no further obligation to
the  Employee,  except  for the  payment  of  salary  through  the  date of such
termination from employment.

                  [c]   Notwithstanding   anything  in  this  Agreement  to  the
contrary,  the Company may terminate the Employee's employment for reasons other
than Cause.

         [D]  Employee's Right to Terminate This Agreement:

                  [a] If the Company  elects to reduce in rank or authority  the
Employee's  duties  under this  Agreement,  without the mutual  agreement of the
Employee,  the Employee shall first give Company  written notice and a period of
ten (10)  days to cure  same,  and if same is not  cured  in said ten (10)  days
Employee may terminate this Agreement effective five (5) days after the Employee
gives written notice of such failure to cure.

         [E] Severance:  In the event the Employee's  employment hereunder shall
be terminated by the Company for other than Cause,  death or  disability,  or by
the Employee pursuant to Section 18 [D] hereof, (1) the Employee shall thereupon
receive as severance  pay in a lump sum the amount of  Compensation  pursuant to
Section 3 hereof and bonuses  which the Employee  would have  received for a one
year period of time; and (2) the Employee's (and his dependents')  participation
in any  medical,  dental  and  other  insurance  plans  shall be  continued,  or
equivalent benefits provided to him or

                                       8
<PAGE>

them by the  Company,  at no cost to him or them,  for a period of one year from
the termination;  and (3) any options granted to the Employee which have not, by
the  terms  of the  options,  vested,  shall be  deemed  to have  vested  at the
termination of employment,  and shall  thereafter be exercisable for the maximum
period of time allowed for exercise  thereof  under the terms of the  applicable
Company stock option plan(s), provided that such period shall not exceed 90 days
following  such  termination.  An election  by the  Employee  to  terminate  his
employment under the provisions of Section 18[D] shall not be deemed a voluntary
termination  of employment of the Employee for the purpose of  interrupting  the
provisions  of  any  of the  Company's  employee  benefits  plans,  programs  or
policies.

         19. Waiver:  Any waiver by either party of a breach of any provision of
this  Agreement  shall not operate as or be  construed  as a waiver of any other
breach or default hereof.

         20.  Governing  Law:  The  validity of this  Agreement or of any of the
provisions  hereof shall be  determined  under and  according to the laws of the
State of New York,  and this  Agreement  and its  provisions  shall be construed
according to the laws of the State of New York,  without reference to its choice
of law rules.

         21. Notice:  Any notice required to be given pursuant to the provisions
of this  Agreement  shall  be in  writing  and by  facsimile  or  registered  or
certified mail or equivalent (i.e., Federal Express) and mailed to the following
addresses:

                   Company:   TII Industries, Inc.
                              1385 Akron Street
                              Copiague, New York 11726
                   Attention: Timothy J. Roach
                              President/CEO

                   Employee:  Thomas Joseph Guzek
                              16261 Berry View Court
                              Ballwin, MO  63011

         22.  Assignment:  The  Employee's  assignment of this  Agreement or any
interest  herein,  or any  monies  due or to  become  due by reason of the terms
hereof,  without the

                                       9
<PAGE>

prior written  consent of the Company  shall be void.  This  Agreement  shall be
assignable and binding to a corporation  or other business  entity that succeeds
to all or  substantially  all of the  business  of the Company  through  merger,
consolidation,   corporate   reorganization   or  by   acquisition   of  all  or
substantially  all of the  assets of the  Company  and which  assumes  Company's
obligations under this Agreement.

         23.  Miscellaneous:  This Agreement  contains the entire  understanding
between the parties hereto and supersedes all other oral and written  agreements
or understandings  between them. No modification or addition hereto or waiver or
cancellation  of any provision  shall be valid except by a writing signed by the
party to be charged therewith.

         24. Obligations of a Continuing Nature: It is expressly  understood and
agreed that the covenants,  agreements and restrictions undertaken by or imposed
on  either  party  hereunder,  which  are  stated  to  exist or  continue  after
termination of Employee's employment with the Company,  shall exist and continue
on both parties  irrespective of the method or circumstances of such termination
from employment or termination of this Agreement.

         25.  Severability:  Employee  agrees  that  if any  of  the  covenants,
agreements or restrictions on the part of Employee are held to be invalid by any
court of competent  jurisdiction,  such holding will not  invalidate  any of the
other  covenants,  agreements  and/or  restrictions  herein  contained  and such
invalid  provisions  shall  be  severable  so that  the  invalidity  of any such
provision shall not invalidate any others.  Moreover,  if any one or more of the
provisions  contained in this Agreement shall be held to be excessively broad as
to duration, activity or subject, such provisions shall be construed by limiting
and  reducing  them so as to be  enforceable  to the maximum  extent  allowed by
applicable law.

         26.  Representation:  Employee  represents and warrants that he has the
legal  right to enter into this  Agreement  and to perform all of the duties and
obligations on his part to be performed  hereunder in accordance  with its terms
and that he is not a party to any agreement or  understanding,  written or oral,
which  prevents  Employee from

                                       10
<PAGE>

entering  into this  Agreement or performing  all of his duties and  obligations
hereunder.  In the event of a breach of such  representation  or warranty on his
part or if there is any other legal  impediment which prevents him from entering
into this Agreement or performing all of his duties and  obligations  hereunder,
the Company shall have the right to terminate this Agreement in accordance  with
Section 18[C] [a].  Without  limiting the  foregoing,  Employee  represents  and
warrants that he is not a party to any agreement  which  prohibits or limits his
ability to fulfill his duties and responsibilities contemplated herein.

         27. Descriptive  Headings:  The paragraph headings contained herein are
for  reference  purposes  only and shall not in any way  affect  the  meaning or
interpretation of this Agreement.

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

                                       TII INDUSTRIES, INC.

                                       By:   /s/ Timothy J. Roach
                                           -----------------------------
                                                Timothy J. Roach
                                                President, CEO and
                                                Vice Chairman of the Board

                                       Employee:

                                           /s/ Thomas J. Guzek
                                       --------------------------------
                                                Thomas J. Guzek

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