Document:

Exhibit 10.2

 

THIRD AMENDMENT TO SERVICE
AGREEMENT

 

This
THIRD AMENDMENT TO SERVICE AGREEMENT (this “Amendment”) is made and entered
into this 16th day of January, 2008 by and
between Optelecom-NKF, Inc., a Delaware corporation (the “Company”), and
James Armstrong, an individual (“Employee”). All capitalized terms used and not
defined herein shall have the respective meanings as set forth in the Service
Agreement between the Company and Employee dated as of June 10, 2002, as
amended on June 6, 2005 and November 28, 2005 (the “Service Agreement”).

 

WHEREAS
the Company and Employee have entered into the Service Agreement setting forth
the terms and conditions of Employee’s employment by the Company; and

 

WHEREAS
the Company and Employee are desirous of amending the Service Agreement and
this Amendment has been approved by the Compensation Committee of the Board of
Directors of the Company.

 

NOW,
THEREFORE, in consideration of the mutual covenants and agreements contained in
the Employment Agreement and herein, the parties agree as follows:

 

1.             Paragraph 2 of the Service
Agreement is hereby deleted in its entirety and replaced with the following:

 

2.             Term of Agreement. The Employee’s employment is intended
to be on an “at-will” basis, and unless terminated earlier in accordance with
the provisions of this Agreement, the Employee’s employment under this
Agreement shall continue until December 31, 2008.

 

2.             The definition of “Employment
Period” in Paragraph 16 of the Service Agreement is hereby deleted in its
entirety and replaced with the following:

 

“Employment Period” shall mean the period between the date of
execution of this Agreement and the expiration of this Agreement pursuant to
Paragraph 2 of this Agreement or the earlier termination of employment pursuant
to Paragraph 14 hereof.

 

3.             Except as specifically
modified by this Amendment, all other terms and conditions of the Service
Agreement shall continue in full force and effect.

 

4.             This Amendment may be
executed in two or more counterparts, all of which together shall constitute
one and the same instrument.

 

 

IN
WITNESS WHEREOF, the parties, intending to be legally bound, have executed this
Third Amendment to Employment Agreement, under seal, as of the date set forth
above.

 

 

	
   

  	
  OPTELECOM-NKF,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:   

  	
  /s/
  Edmund Ludwig

  
	
   

  	
  Edmund
  Ludwig

  
	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  James Armstrong

  
	
   

  	
  James
  Armstrong

  

 

2Exhibit 10.3

 

Second Amendment to Employment Contract

 

This amendment (“Amendment”) is entered into
as of January 17, 2008 between Optelecom-NKF B.V. (formerly NKF Electronics B.V.), a
private limited company incorporated in the Netherlands (the “Company”), and Thomas Wilhelmus Martinus Overwijn (“Executive”).

 

The parties hereby agree as follows:

 

1.                    Prior
Employment Contract.   The parties have previously entered into an
employment contract effective April 1,
2005, and amended on December 15, 2007 (the “Agreement”). The
parties now wish to further amend the Agreement as stated herein.

 

2.                    Amendment:

 

The parties hereby amend Paragraph 1 of
Clause 2, Position and Responsibilities of the Agreement to add the following: Additionally,
effective from April 1, 2007, Mr. Overwijn will assume the position of Chief Operating Officer of
Optelecom-NKF, Inc., reporting to the president and CEO.

 

The parties hereby amend Paragraph 2 of
Clause 3, Working hours and salary, of the Agreement to increase Executive’s annual gross
salary from EUR 115,000 to EUR 135,000, effective as of January 1, 2008.

 

3.                    Continuing
Effect of Agreement:   The parties hereto agree that the terms and
provisions of the Agreement, as
amended by this Amendment, shall remain in full force and effect. Except as specifically modified by this
Amendment, the terms and provisions of the Employment Agreement shall continue
and be binding on the parties hereto. In the event of any conflict between the provisions of the
Employment Agreement and the provisions of this Amendment, the
provisions of this Amendment shall control. The provisions of the Employment Agreement and this Amendment
constitute the entire agreement between the parties concerning the
Executive’s employment arrangement with the Company,
and may not be amended or modified except by a written agreement between the parties.

 

To evidence their agreement to the terms of
this Amendment, Executive has signed and Company has caused its duly authorized representative to sign this
Amendment as of January 17, 2008

 

 

	
  Optelecom-NKF B.V.:

  	
  Executive:

  
	
   

  	
   

  
	
  By:

  	
  /s/ Edmund
  Ludwig

  	
   

  	
  /s/ Thomas
  W.M. Overwijn

  
	
   

  	
  Edmund Ludwig

  	
   

  	
  Thomas W.M. OverwijnExhibit 10.9

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT is entered into on the  16 day of January, 2008 and is effective on and as of the 1st day of
January, 2008 (the “Effective Date”), by and between Optelecom-NKF, Inc.,
a Delaware corporation (the “Company”), and Steven Tamburo (the “Executive”).

 

Recitals

 

WHEREAS, the
Company desires to employ the Executive, and the Executive desires to work for
the Company, all pursuant to the terms and conditions set forth in this
Agreement.

 

NOW, THEREFORE,
in consideration of the mutual promises made below, the parties agree as
follows:

 

1.             Employment,
Duties and Acceptance.

 

1.1         Employment.

 

(a)   Effective upon the Effective Date, the
Company shall continue to employ the Executive as its Chief Financial Officer.
In such capacity, the Executive shall report to the Chief Executive Officer of
the Company and shall perform such duties and assume such responsibilities as
may be assigned by the Chief Executive Officer or the Board of Directors of the
Company from time to time. The Executive accepts such employment and shall
perform his duties faithfully and to the best of his abilities.

 

(b)   The Executive shall devote his full working
time and creative energies to the performance of his duties hereunder and will
at all times devote such additional time and efforts as are reasonably
sufficient for fulfilling the significant responsibilities entrusted to him. So
long as such activities, in the aggregate, do not interfere with the
performance by the Executive of his duties hereunder, the Executive shall be
permitted a reasonable amount of time to participate (as board member, officer
or volunteer) in civic, political and charitable activities.

 

1.2         Place of
Employment.    The
Executive’s principal place of employment shall be in the Washington, D.C.
metropolitan area, subject to such travel as may be reasonably required by his
employment pursuant to the terms hereof. The Executive shall not be required to
relocate outside of the Washington, D.C. metropolitan area during the Term
unless the Company provides relocation benefits acceptable to the Executive in
his sole discretion.

 

 

2.             Term of Employment.

 

Unless
terminated earlier in accordance with the provisions of this Agreement, the
Executive’s employment hereunder shall continue until the one (1) year
anniversary of the Effective Date (the “Term”).

 

3.             Compensation.

 

3.1         Salary.    As
compensation for all services to be rendered pursuant to this Agreement, the
Company shall pay to the Executive during the Term a salary of $175,000 per
annum (the “Base Salary”) less such deductions as shall be required to be
withheld by applicable laws and regulations or as otherwise authorized by the
Executive. The Base Salary shall accrue from and after the Effective Date, and
shall be payable during the Term, in arrears in equal periodic installments, in
accordance with the Company’s customary payroll practices in effect at the time
of payment. The Executive’s Base Salary may be reviewed by the Board of
Directors of the Company or the Compensation Committee thereof (collectively,
the “Board”) and may be increased (but not decreased) based upon the evaluation
of the Executive’s performance and the compensation policies of the Company in
effect at the time of each such review.

 

3.2         Incentive
Compensation.    The Executive will be entitled to participate in
the Company’s Incentive Bonus Plan for Plan Year 2008 (the “2008 Incentive Plan”).
Provided the Company’s annual defined goals as determined by the Board and set
forth in the 2008 Incentive Plan are met, the Executive’s potential estimated
bonus under the 2008 Incentive Plan would be 40% of the Base Salary at “Target”.
The Executive’s variable compensation under the 2008 Incentive Plan would also
include restricted stock and stock options to be earned according to the 2008
Incentive Plan, as determined by the Board. In addition, during the Term, the
Executive shall be entitled to participate in any subsequent bonus or incentive
plan or program adopted by the Board in which executive officers of the Company
are eligible to participate, in accordance with such terms as are determined by
the Board.

 

3.3         Participation
in Executive Benefit Plans.    The Executive shall be permitted during the Term,
if and to the extent eligible, to participate in any group medical, dental,
long-term and short-term disability insurance, life insurance, and 401(k) plan
of the Company available to other comparable executives of the Company
generally on the same terms as such other executives.

 

3.4         Vacation.    The
Executive shall be entitled to accrue twenty (20) days of paid vacation and ten
(10) days of paid sick leave per year in accordance with the Company’s
Paid Time Off Policy, to be scheduled and taken at the Executive’s option at
such times as his duties may permit. The established vacation year is the
calendar year, January 1 through December 31. Vacation leave can be
accrued for a maximum of 240 hours at the end of a calendar year. Any vacation
leave accrued in excess of 240 hours on any December 31st will be paid to
the employee by March 31st of the following year, provided that the
employee has taken at least two weeks vacation leave during the year in which
the excess was accrued,

 

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otherwise
the excess will be lost by the employee. Pay for any unused earned vacation
will be given at the time of termination, up to a maximum of 240 hours.

 

3.5         Expenses.    Subject
to such policies as may from time to time be established by the Board, the
Company shall pay or reimburse the Executive for all ordinary, necessary and
reasonable expenses (including, without limitation, travel, meetings, dues,
subscriptions, fees, educational expenses, computer equipment, mobile
telephones, professional insurance, and the like) actually incurred or paid by
the Executive during the Term in the performance of the Executive’s services
under this Agreement, upon presentation of expense statements or vouchers or
such other supporting information as the Board may require.

 

3.6.        Withholding.    The
Company is authorized to withhold from the amount of any Base Salary and
incentive compensation and any other things of value paid to or for the benefit
of the Executive, all sums authorized by the Executive or required to be
withheld by law, court decree, or executive order, including (but not limited
to) such things as income taxes, employment taxes, and employee contributions
to fringe benefit plans sponsored by the Company.

 

4.             Termination.

 

4.1         General.   This Agreement shall terminate upon the expiration of the Term, unless
earlier terminated in accordance with the provisions of this Section 4.

 

4.2         Termination
Upon Mutual Agreement.    The
Company and the Executive may, by mutual written agreement, terminate this
Agreement and/or the employment of the Executive at any time.

 

4.3         Death or
Disability of Executive.

 

(a)          The employment of the Executive hereunder
shall terminate upon (i) the death of the Executive, and (ii) at the
option of the Company upon not less than thirty (30) days’ prior written notice to the Executive or his
personal representative or guardian, if the Executive suffers a Total Disability (as defined in Section 4.3(b) below).

 

(b)         For purposes of this Agreement, “Total
Disability” shall mean (i) if the Executive is subject to a legal decree
of incompetency (the date of such decree being deemed the date on which such
disability occurred), or (ii) the written determination by a physician
selected by the Company that, because of a medically determinable disease,
injury or other physical or mental disability, the Executive is unable
substantially to perform each of the material duties of the Executive required
hereby, and that such disability has lasted for the immediately preceding
ninety (90) days and is, as of the date of determination, reasonably expected
to last an additional ninety (90) days or longer after the date of
determination, in each case based upon medically available reliable information,
and the provision of clear and convincing evidence by the Company of the
Executive’s

 

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inability substantially to perform each material duty hereunder in
support of such determination by the physician.

 

(c)          Any leave on account of illness or temporary
disability which is short of “Total Disability” shall not constitute a breach
of this Agreement by the Executive and in no event shall any party be entitled
to terminate this Agreement for “cause” or “good reason” (as such terms are
defined herein) due to any such leave. All physicians selected hereunder shall
be board certified in the specialty most closely related to the nature of the
disability alleged to exist.

 

4.4         Termination For
Cause.    The
Company may, upon action of the Board, and upon written notice to the Executive
specifying in reasonable detail the reason therefor, terminate the employment
of the Executive at any time for “cause” (as defined below), provided, however,
that if the reason for termination for “cause” is susceptible of cure, the
Executive shall have a period of thirty (30) days after such written notice to
effect a cure. “Cause” means (i) the material failure of the Executive to
perform his duties under this Agreement which failure materially adversely
affects the Company or its business after notice and a reasonable opportunity
to cure; (ii) willful malfeasance by the Executive in connection with the
performance of his duties under this Agreement that could in the good faith
judgment of the Board (x) have a material adverse impact on the Company’s
business, (y) subject the Company to criminal penalties in excess of
$50,000, or (z) result in the incarceration of any officer, director or
employee of the Company; (iii) the Executive being convicted of, or
pleading guilty or nolo contendere to, or being indicted for a felony or other
crime involving theft, fraud or moral turpitude; (iv) fraud or
embezzlement against the Company; (v) the failure of the Executive to obey
in all material respects any proper written direction of the Chief Executive
Officer or the Board that is not inconsistent with this Agreement and which
failure to obey has a material adverse effect on the Company; or (vi) the
violation by the Executive of the non-competition and confidentiality
provisions of Section 5 of this Agreement.

 

4.5         Termination For
Good Reason.    The
Executive may resign (and thereby terminate his employment under this
Agreement) at any time for “good reason” (as defined below), upon not less than
thirty (30) days’ prior written notice to the Company specifying in reasonable
detail the reason therefor, provided, however, that if the reason for
resignation for “good reason” is susceptible of cure, the Company shall have a
period of thirty (30) days after such written notice to effect a cure. For
purposes of this Agreement, “good reason” shall mean (i) any material
failure by the Company to comply with any material obligation imposed by this
Agreement; or (ii) a substantial reduction in the Executive’s title,
position, duties or responsibilities.

 

4.6         Payments Upon
Termination.

 

(a)          In the event that the Executive’s employment
is terminated by the Company without “cause,” or by the Executive for “good
reason,” then, if no Change of

 

4

 

Control (as defined below) has occurred on or before the date of such
termination, the following provisions shall apply:

 

(i)   The Company shall pay the Executive the Base Salary
to which the Executive would have been entitled pursuant to Section 3.1 of this Agreement had the Executive
remained in the employ of the Company for a period of twelve (12) months from
the date of termination (the “Termination Payment Period”). Such payments shall
be paid on the same schedule used to pay Base Salary to the Executive during
the Term.

 

(ii)  Unless prohibited by law or, with respect to any
insured benefit, the terms of the applicable insurance contract, the Executive
shall continue to participate in, and be covered under, the Company’s medical,
dental, long-term and short-term disability insurance, and life insurance plan
on the same basis as other executives of the Company during the Termination
Payment Period.

 

(iii)    Notwithstanding the foregoing, the Company shall
not be required to make any payment to the Executive or maintain the Executive’s
participation or coverage under any plan pursuant to this  Section 4.6(a) if the Executive breaches any of
the provisions of Section 5 hereof. In such event, the Company shall provide written notice to the
Executive detailing such violation.

 

(b)         In the event the Executive’s employment is
terminated (i) pursuant to Section 2, (ii) by the Company for “cause,”
or (iii) by the Executive without “good reason,” then the Company shall
have no duty to make any payments or provide any benefits to the Executive
pursuant to this Agreement other than payment of the amount of the Executive’s
Base Salary accrued through the date of termination of his employment.

 

(c)         Upon termination of Executive’s employment for
death or Total Disability, the Company shall pay to the Executive, guardian or
personal representative, as the case may be, in addition to any insurance or
disability benefits to which he may be entitled hereunder, all amounts accrued
or vested prior to such termination.

 

(d)         In the event that the Executive’s employment
is terminated by the Company without “cause,” or by the Executive for “good
reason,” then, if a Change of Control (as defined below) has occurred on or before the date of such termination
or the Company has entered into a definitive agreement for a Change of Control
on or before the date of termination and such termination is effected in
contemplation of such Change of Control, the following provisions shall apply:

 

(i)      The
Company shall pay the Executive the Base Salary to which the Executive would
have been entitled pursuant to Section 3.1 of
this Agreement had the Executive remained in the employ of the Company for a
period of twenty four (24) months from the date of termination (the “Change of
Control Payment Period”) and any bonus payments earned through the date of termination.
Such payments shall be paid on the same schedule used to pay Base Salary to the
Executive during the Term.

 

5

 

(ii)   Unless prohibited by law or, with respect to any
insured benefit, the terms of the applicable insurance contract, the Executive
shall continue to participate in, and be covered under, the Company’s medical,
dental, long-term and short-term disability insurance, and life insurance plan
on the same basis as other executives of the Company during the Change of
Control Payment Period.

 

(iii)    Notwithstanding the foregoing, the Company shall
not be required to make any payment to the Executive or maintain the Executive’s
participation or coverage under
any plan pursuant to this Section 4.6(d) if
the Executive breaches any of the provisions of Section 5
hereof. In such event, the Company shall provide written notice to the
Executive detailing such violation.

 

(e)           For purposes of this Agreement, the term “Change
of Control” shall mean:

 

(i)            Any person (as defined conventionally in
the context of corporate ownership) becomes the beneficial owner directly or
indirectly (within the meaning of Rule 13(d)(3) of the Securities
Exchange Act of 1934, as amended) of more than 50% of the Company’s then outstanding
voting securities (measured on the basis of voting power);

 

(ii)           The closing of an agreement of merger or
consolidation with any other corporation or business entity, other than (x) a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity), in combination with the ownership of any trustee or other
fiduciary holding securities under an employee benefit plan of the Company, at
least 50% of the combined voting power of the voting securities of the Company
or such surviving entity outstanding immediately after such merger or
consolidation, or (y) a merger or consolidation effected to implement a
re-capitalization of the Company (or similar transaction) in which no person
acquires more than 50% of the combined voting power of the Company’s then
outstanding securities; or

 

(iii)          The liquidation or dissolution of the Company
or upon the closing of a sale or disposition by the Company of all or
substantially all of the Company’s assets.

 

(f)            The Executive acknowledges that, upon
termination of his employment, he is entitled to no other compensation,
severance, or other benefits other than those specifically set forth in this
Agreement or any applicable grant agreement under the Optelecom-NKF, Inc.
Stock Option Plan of 2002, as amended from time to time, or any subsequent
stock option plan of the Company.

 

6

 

4.7           No Disparaging Comments Upon Termination.

 

Upon
termination of this Agreement, the Company will refrain from making any
disparaging remarks about the Executive. Similarly, the Executive shall refrain
from making any disparaging remarks about the businesses, services, products,
stockholders, officers, directors or other personnel of the Company or any of
its affiliates.

 

5.             Certain
Covenants of the Executive.

 

5.1         Necessity for Covenants.    The Executive acknowledges that (i) the Company
is engaged and will in the future be engaged in the Business (as defined
below); (ii) his employment pursuant to this Agreement will give him
access to customers and suppliers of, and trade secrets of and confidential
information concerning, the Company; and (iii) the agreements and covenants contained in
this Section 5 are essential to protect
the business and goodwill of the Company. In order to induce the Company to
enter into this Agreement and pay the compensation and other benefits at the
levels requested by the Executive, the Executive enters into the following
covenants:

 

5.2         Definitions.

 

(a)           “Company” for purposes of this Article 5 shall
include the Company and all of the Company’s majority owned subsidiaries and
affiliates.

 

(b)           “Business” shall mean the development, manufacturing,
marketing, sale and/or supply of network video equipment, including video
servers, Ethernet switches, fiber optic systems and video management software.

 

(c)           “Business Contact” shall mean any (i) customer which has
purchased goods or services provided by the Company during the Term, (ii) prospective
customer whom the Executive or persons working for or directly with the
Executive has contacted during the Term for the purpose of endeavoring to sell
the goods or services of the Company to the prospective customer, or (iii) provider
of goods or services to the Company.

 

(d)           “Service Area” means the geographic area in which the
Company markets and sells its goods and services.

 

5.3           Restrictions.    During
the Term and for a period of one (1) year after the date (the “Termination
Date”) the Executive’s employment hereunder is terminated (the “Restricted
Period”), the Executive shall not, directly or indirectly, for himself or on
behalf of any other person, firm, corporation or other entity, whether as a
principal, agent, employee, stockholder, partner, officer, member, director,
sole proprietor, or otherwise:

 

(a)           call upon or solicit any Business Contact for
the purpose of persuading the Business Contact to engage the Executive or any
other person, firm, corporation or other entity to provide goods or services
which are the same or similar to those the Company provided to the Business
Contact or to engage the Business Contact to provide goods or services which are
the same or similar to those the Business Contact provided to the Company to
any other person, firm, corporation or other entity;

 

7

 

(b)           solicit, participate in or promote the
solicitation of any person who was employed by the Company at any time during
the twelve (12) months preceding the Termination Date to leave the employ of the Company, or hire
or engage any of those persons;

 

(c)           make any disparaging remarks about the
Company’s business, services or personnel;

 

(d)           interfere in any way with the Company’s
business, prospects or personnel; or

 

(e)           become affiliated with or render services to
any person engaged in any business that competes with the Business within the
Service Area, directly or indirectly, in any capacity, including, without
limitation, as an individual, partner, shareholder, officer, director,
principal, agent, employee, trustee or consultant; provided, however, that the
Executive may own, directly or indirectly, solely as an investment, securities
which are publicly traded if the Executive (a) is not a controlling person
of, or a member of a group which controls, the issuer and (b) does not,
directly or indirectly, own 5% or more of any class of securities of the
issuer.

 

5.4         Trade Secrets
and Confidential Information

 

5.4.1   Trade Secrets
Defined.    The
term “Trade Secrets,” as used in this Agreement, includes, without limitation, (i) all
information concerning the Company and all aspects of the Business, including
costs, revenues, profits, pricing, customer information, product information,
supply sources, marketing, prospective and executed contracts, budgets and
business plans, (ii) all information which is unique to the Company or to
any aspect of the Business which has a significant business purpose and is not
known or generally available from sources outside the Company or typical of
industry practice, and which would have a material adverse effect on the
Company or the Business if disclosed, and (iii) all formulae, innovations,
inventions, improvements, compilations, programs, devices, lists, methods,
techniques, practices, procedures or processes of the Company and all
information relating thereto.

 

5.4.2   Confidential Information Defined.    Any
other information not qualifying as a Trade Secret, but relating to the
business of the Company which is disclosed by the Company to the Executive, or
is discovered by the Executive in the course of employment, is Confidential
information.

 

5.4.3   Duty to Maintain Secrecy and
Confidentiality.    During
the Period of the Executive’s employment with the Company, and for a period of
three (3) years thereafter, the Executive
shall maintain the secrecy and confidentiality of the Trade Secrets and
the Confidential Information and shall not (i) divulge, furnish or make
accessible to anyone or in any way use, for his own benefit or for the benefit
of any other individual firm or entity (other than in the ordinary course of
the Company’s business), any Trade Secret or Confidential Information; (ii) take
or permit any action to be taken which would reduce the value of the Trade
Secrets or Confidential Information to the Company; or (iii) otherwise

 

8

 

misappropriate
or suffer the misappropriation of the Trade Secrets or the Confidential
Information.

 

5.4.4        Information Which is Publicly
Known.    Notwithstanding
anything herein to the contrary, the obligations of secrecy and confidentiality
set forth herein shall not apply to any information which is now generally
publicly known or which subsequently becomes generally publicly known other
than as a direct or indirect result of the breach of this Agreement by the
Executive, or which is required by law or order of any court to be disclosed.

 

5.5         Property of the
Company.    All memoranda, notes, lists,
records and other documents or papers (and all copies thereof), including but
not limited to, such items stored in computer memories, on microfiche or by any
other means, made or compiled by or on behalf of the Executive, or made
available to the Executive concerning the Business, are and shall be the
property of the Company and shall be delivered to the Company promptly upon the
termination of the Executive’s employment with the Company or at any other time
on request.

 

5.6         Executive’s
Ideas, Etc.    All inventions, prototypes, discoveries, improvements,
innovations and the like (“Inventions”) and all works of original authorship or
images that are fixed in any tangible medium of expression and all copies
thereof (“Works”) which are designed, created or developed by Executive, solely
or in conjunction with others, in the course of performance of the Executive’s
duties which relate to the Business, shall be made or conceived for the
exclusive benefit of and shall be the exclusive property of the Company. The
Executive shall immediately notify the Company upon the design, creation or
development of all Inventions and Works. At any time thereafter, the Executive,
at the request and expense of the Company, shall execute and deliver to the
Company all documents or instruments which may be necessary to secure or
perfect the Company’s title to or interest in the Inventions and Works,
including but not limited to applications for letters of patent, and
extensions, continuations or reissues thereof, applications for copyrights and
documents or instruments of assignment or transfer. All Works are agreed and
stipulated to be “works made for hire,” as that term is used and understood
within the Copyright Act of 1976, as amended or any successor statute. To the
extent any Works are not deemed to be works made for hire as defined above, and
to the extent that title to or ownership of any Invention or Work and all other
rights therein are not otherwise vested exclusively in the Company, the
Executive shall, without further consideration but at the expense of the
Company, assign and transfer to the Company the Executive’s entire right, title
and interest (including copyrights and patents) in or to those Inventions and
Works.

 

5.7         Rights and
Remedies Upon Breach.    If the Executive breaches, or threatens to
commit a breach of, any of the provisions of Sections 5.1 through 5.6 (the “Restrictive Covenants”), the Company shall, in addition to its
right immediately to terminate this Agreement, have the right and remedy (which
right and remedy shall be independent of others and severally enforceable, and
which shall be in addition to, and not in lieu of, any other rights and
remedies available to the Company under law or in equity) to have the
Restrictive Covenants specifically enforced by any court having equity
jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach could cause irreparable injury to the

 

9

 

Company
or its affiliates and that money damages may not provide adequate remedy to the
Company.

 

5.8         Covenants
Currently Binding Executive.    The Executive warrants that his employment by
the Company will not (a) violate any non-disclosure agreements, covenants
against competition, or other restrictive covenants made by the Executive to or
for the benefit of any previous employer or partner, or (b) violate or
constitute a breach or default under, any statute, law, judgment, order,
decree, writ, injunction, deed, instrument, contract, lease, license or permit
to which the Executive is a party or by which the Executive is bound.

 

5.9         Litigation.    There is no litigation, proceeding or
investigation of any nature (either civil or criminal) which is pending or, to
the best of the Executive’s knowledge, threatened against or affecting the
Executive or which would adversely affect his ability to substantially perform
the duties herein.

 

5.10       Review.    The Executive has received or been given the
opportunity to review the provisions of this Agreement, and the meaning and
effect of each provision, with independent legal counsel of the Executive’s
choosing.

 

5.11       Severability of
Covenants.    The
Executive acknowledges and agrees that the Restrictive Covenants are reasonable
and valid in geographical and temporal scope and in all respects. If any court
determines that any of the Restrictive Covenants, or any part thereof, is
invalid or unenforceable, the remainder of the Restrictive Covenants shall not
thereby be affected and shall be given full effect, without regard to the
invalid portions.

 

5.12       Blue-Penciling.    If any
court determines that any of the Restrictive Covenants, or any part thereof, is
unenforceable because of the duration or geographic scope of such provision,
such court shall have the power to reduce the duration or scope of such
provision, as the case may be, and, in its reduced form, such provision shall
then be enforceable and shall be enforced. If any such court declines to so
revise such covenant, the parties agree to negotiate in good faith a
modification that will make such duration or scope enforceable.

 

6.             Dispute
Resolution.

 

6.1         Costs of
Arbitration.    If either party brings an arbitration
proceeding to enforce its rights under this Agreement, the prevailing party
shall be entitled to recover from the other party all expenses incurred by it
in preparing for and in trying the case, including, but not limited to,
investigative costs, arbitration and court costs and reasonable attorneys’ fees.

 

6.2         No Jury Trial.    NEITHER
PARTY SHALL ELECT A TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT.

 

6.3         Personal
Jurisdiction.    Both
parties agree to submit to the jurisdiction and venue of the federal or state
courts in the State of Maryland as to matters involving enforcement of this
Agreement, including any award under an arbitration proceeding.

 

10

 

6.4         Arbitration.    SUBJECT TO THE COMPANY’S RIGHT TO SEEK
INJUNCTIVE RELIEF AS SPECIFIED IN THIS AGREEMENT, ANY DISPUTE BETWEEN THE
PARTIES HERETO ARISING UNDER OR RELATING TO THIS AGREEMENT (INCLUDING, BUT NOT
LIMITED TO, THE AMOUNT OF DAMAGES, THE NATURE OF THE EXECUTIVE’S TERMINATION OR
THE CALCULATION OF ANY BONUS OR OTHER AMOUNT OR BENEFIT DUE) SHALL BE RESOLVED
IN ACCORDANCE WITH THE PROCEDURES OF THE AMERICAN ARBITRATION ASSOCIATION. ANY
RESULTING HEARING SHALL BE HELD IN THE WASHINGTON, D.C. METROPOLITAN AREA. THE
RESOLUTION OF ANY DISPUTE ACHIEVED THROUGH SUCH ARBITRATION SHALL BE BINDING
AND ENFORCEABLE BY A COURT OF COMPETENT JURISDICTION. THE ARBITRATOR(S) SHALL
HAVE NO AUTHORITY TO MODIFY ANY PROVISION OF THIS AGREEMENT OR TO AWARD A
REMEDY FOR A DISPUTE INVOLVING THIS AGREEMENT OTHER THAN A BENEFIT SPECIFICALLY
PROVIDED UNDER OR BY VIRTUE OF THE AGREEMENT.

 

7.             Other Provisions.

 

7.1         Notices.    Any
notice or other communication required or which may be given hereunder shall be
in writing and shall be delivered personally, telegraphed, telexed, sent by
facsimile transmission or sent by certified, registered or express mail,
postage paid, and shall be deemed given when so delivered personally,
telegraphed, telexed or sent by facsimile transmission or, if mailed, four days
after the date of mailing, as follows:

 

	
   

  	
  (i)

  	
  if
  to the Company, to:

  
	
   

  	
   

  	
   

  
	
   

  	
  Optelecom-NKF, Inc.

  	
   

  
	
   

  	
  12920
  Cloverleaf Center Drive

  Germantown,
  Maryland 20874

  Facsimile:
  (301) 528-8190

  	
   

  
	
   

  	
  Attention:
  Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  with
  copies to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Thomas
  W. France, Esquire 

  Venable
  LLP

  	
   

  
	
   

  	
  8010
  Towers Crescent Drive

  Suite 300

  	
   

  
	
   

  	
  Vienna,
  Virginia 22182

  	
   

  
	
   

  	
  Facsimile:
  (703) 821-8949

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (ii)

  	
  if
  to the Executive, to the Executive at the address most recently on the books
  and records of the Company.

  
				

 

Any
party may by notice given in accordance with this Section to the other
party designate another address or person for receipt of notices hereunder.

 

11

 

7.2         Entire
Agreement.    This Agreement contains the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, written or oral, with respect thereto. In the
event there is any conflict or ambiguity between the provisions of this
Agreement and any other agreement, plan or policy of the Company relating to
the Executive’s employment with the Company, the resolution of any such
conflict or ambiguity shall be governed by the terms of this Agreement.

 

7.3         Waivers and
Amendments.    This
Agreement may be amended, modified, superseded, canceled, renewed or extended,
and the terms and conditions hereof may be waived, only by a written instrument
signed by the Executive and a duly authorized officer (other than the
Executive) of the Company (each, in such capacity, a party) or, in the case of
a waiver, by the party waiving compliance. No delay on the part of any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any waiver on the part of any party of any right, power or
privilege hereunder, nor any single or partial exercise of any right, power or
privilege hereunder, preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder.

 

7.4         Governing Law.    This Agreement has been negotiated and is to
be performed in the State of Maryland, and shall be governed and construed in
accordance with the laws of the State of Maryland applicable to agreements made
and to be performed entirely within such State.

 

7.5         Counterparts.    This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.

 

7.6         Confidentiality.    Neither party shall disclose the contents of
this Agreement or of any other agreement they have simultaneously entered into
to any person, firm or entity, except the agents or representatives of the
parties (including any tax advisors or attorneys of a party) and immediate
family members, or except as required by law.

 

7.7         Word Forms.    Whenever used herein, the singular shall
include the plural and the plural shall include the singular. The use of any
gender or tense shall include all genders and tenses.

 

7.8         Headings.    The Section headings
have been included for convenience only, are not part of this Agreement, and
are not to be used to interpret any provision hereof.

 

7.9         Binding Effect
and Benefit; Assignment.    This
Agreement shall be binding upon and inure to the benefit of the parties, their
successors, heirs, personal representatives and other legal representatives.
This Agreement may be assigned by the Company to any entity in connection with
a Change of Control; provided, however, that notwithstanding any other
provision within this Agreement, this Agreement shall survive any Change
in Control that shall occur for the remainder of the Term. The Executive may not assign this Agreement
without the prior written consent of the Company.

 

12

 

7.10         Rule 409A.    If any compensation or benefits provided by
this Agreement may result in the application of Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), the Company shall in
consultation with the Executive, modify the Agreement in the least restrictive
manner necessary in order to exclude such compensation from the definition of “deferred
compensation” within the meaning of such Section 409A or in order to
comply with the provisions of Section 409A, other applicable provision(s) of
the Code and/or any rules, regulations or other regulatory guidance issued
under such statutory provisions and without any diminution in the value of the
payments to the Executive.

 

7.11         Separability.    The
covenants contained in this Agreement are separable, and if any court of
competent jurisdiction declares any of them to be invalid or unenforceable,
that declaration of invalidity or unenforceability shall not affect the
validity or enforceability of any of the other covenants, each of which shall remain
in full force and effect.

 

13

 

IN
WITNESS WHEREOF, the parties, intending to be legally bound, have executed this
Agreement or caused it to be executed and attested by their duly authorized
officers as a document under seal on the day and year first above written.

 

	
  ATTEST/WITNESS:

  	
  OPTELECOM-NKF,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ (ILLEGIBLE)

  	
   

  	
  By:

  	
  /s/
  Edmund Ludwig ( SEAL)

  
	
   

  	
  Chief
  Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  /s/ Steven Tamburo (SEAL)

  
	
   

  	
  Steven
  Tamburo

  

 

14

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