Form 8-K

8-K — Rekor Systems, Inc.

Accession: 0001193125-26-129061

Filed: 2026-03-27

Period: 2026-03-24

CIK: 0001697851

SIC: 3669 (COMMUNICATIONS EQUIPMENT, NEC)

Item: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers

Item: Financial Statements and Exhibits

Documents

8-K — d119059d8k.htm (Primary)

EX-10.1 (d119059dex101.htm)

EX-10.2 (d119059dex102.htm)

XML — IDEA: XBRL DOCUMENT (R1.htm)

8-K

8-K (Primary)

Filename: d119059d8k.htm · Sequence: 1

8-K

false 0001697851 0001697851 2026-03-24 2026-03-24

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 24, 2026

REKOR SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

Delaware

001-38338

81-5266334

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

6721 Columbia Gateway Drive, Suite 400, Columbia, MD 21046

(Address of Principal Executive Offices)

Registrant’s Telephone Number, Including Area Code: (410) 762-0800

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol(s)

Name of each exchange

on which registered

Common Stock, $0.0001 par value per share

REKR

The Nasdaq Stock Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(b) Resignation of Director.

On March 25, 2026, Professor Sanjay Sarma notified the Board of Directors (the “Board”) of Rekor Systems, Inc. (the “Company”) of his resignation as a director, effective March 25, 2026. Professor Sarma’s resignation was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices.

Following his resignation, Professor Sarma will continue to support the Company’s technology and innovation initiatives by serving as Chairman of the Board of Managers of Rekor Labs, LLC, a wholly owned subsidiary of the Company.

(e) Compensatory Arrangements of Certain Officers.

Amended and Restated Employment Agreement with Robert A. Berman

On March 24, 2026, the Company entered into an Amended and Restated Employment Agreement (the “Berman Agreement”) with Robert A. Berman, the Company’s President and Chief Executive Officer, which is effective as of March 20, 2026, and which amends, restates, replaces and supersedes that certain Employment Agreement, dated as of May 15, 2019, by and between the Company and Mr. Berman.

The Berman Agreement provides for an initial employment term through June 30, 2028, subject to automatic one-year renewal periods unless either party provides at least 90 days’ prior written notice of non-renewal. Under the Berman Agreement, Mr. Berman will receive an annualized base salary of $395,000 and will be eligible to be considered for periodic performance bonuses as determined by the Board in its sole discretion. In addition, within 30 days following the effective date of the Berman Agreement, the Company will grant Mr. Berman a one-time stock grant of 1,000,000 shares of the Company’s common stock, which will be fully vested upon grant. The Company will pay its share of any FICA taxes owed with respect to such grant, and the grant will be subject to withholding only with respect to the employee’s share of any mandatory FICA or other withholding, but not with respect to income taxes. Mr. Berman will be responsible for all income tax payments related to the grant.

Either party may terminate the employment relationship at any time, with or without Cause (as defined in the Berman Agreement), on 30 days’ advance notice, except that the Company may terminate Mr. Berman’s employment immediately for Cause. If Mr. Berman’s employment is terminated by the Company without Cause or by Mr. Berman for Good Reason (as defined in the Berman Agreement), then, subject to his execution and non-revocation of a general release of claims, Mr. Berman will be entitled to a separation payment equal to 12 months of his then-current base salary, payable in 12 equal monthly installments. Upon a Change in Control (as defined in the Berman Agreement) during the employment term, the Company may terminate Mr. Berman’s employment within 120 calendar days after the Change in Control, in which event Mr. Berman will be entitled, subject to his execution and non-revocation of a general release of claims, to a lump-sum payment equal to three times his then-current base salary, in lieu of the separation payment described above.

The Berman Agreement also contains customary provisions regarding expense reimbursement, employee benefits, vacation, indemnification and directors’ and officers’ liability insurance, and post-termination obligations, including pursuant to a previously executed proprietary rights agreement.

The foregoing description of the Berman Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Berman Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Employment Agreement with Joseph Nalepa

On March 24, 2026, the Company entered into an Employment Agreement (the “Nalepa Agreement”) with Joseph Nalepa, the Company’s Chief Financial Officer, which is effective as of November 17, 2025, the date of Mr. Nalepa’s appointment as Chief Financial Officer.

The Nalepa Agreement provides for an initial employment term through June 30, 2028, subject to automatic one-year renewal periods unless either party provides at least 30 days’ prior written notice of non-renewal. Under the Nalepa Agreement, Mr. Nalepa will receive an annualized base salary of $260,000. For the period from the effective date of the Nalepa Agreement through May 1, 2026, Mr. Nalepa will be eligible to receive an initial bonus of $75,000, subject to the Company’s timely filing of its Annual Report on Form 10-K for the 2025 calendar year, receipt of a satisfactory report from the Company’s independent auditors with respect to the Company’s 2025

financial statements, and Mr. Nalepa’s continued employment through the payment date. For the 12-month period commencing July 1, 2026, and for each subsequent 12-month period during the employment term, Mr. Nalepa will be eligible to receive a discretionary bonus, which may be more or less than $150,000, based upon key performance measures mutually agreed upon between Mr. Nalepa and the Compensation Committee of the Board in consultation with the Audit Committee of the Board.

Either party may terminate the employment relationship at any time, with or without Cause (as defined in the Nalepa Agreement), on advance notice as provided in the Nalepa Agreement, except that the Company may terminate Mr. Nalepa’s employment immediately for Cause. Mr. Nalepa is required to provide the Company at least 30 days’ prior written notice if he decides to terminate his employment, provided that any such notice must be given at least 60 days prior to any deadline for filing the Company’s quarterly or annual financial reports with the SEC. If Mr. Nalepa’s employment is terminated by the Company without Cause or by Mr. Nalepa for Good Reason (as defined in the Nalepa Agreement), then, subject to his execution and non-revocation of a general release of claims, Mr. Nalepa will be entitled to a separation payment equal to 12 months of his then-current base salary, payable in 12 equal monthly installments. Upon a Change in Control (as defined in the Nalepa Agreement) during the employment term, the Company may terminate Mr. Nalepa’s employment within 120 calendar days after the Change in Control, in which event Mr. Nalepa will be entitled, subject to his execution and non-revocation of a general release of claims, to a lump-sum payment equal to two times his then-current base salary, in lieu of the separation payment described above.

The Nalepa Agreement also contains customary provisions regarding expense reimbursement, employee benefits, vacation, indemnification and directors’ and officers’ liability insurance, and post-termination obligations, including pursuant to a previously executed proprietary rights agreement.

The foregoing description of the Nalepa Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Nalepa Agreement, a copy of which is filed as Exhibit 10.2 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.

Description

10.1

Amended and Restated Employment Agreement, entered into on March 24, 2026 and effective as of March 20, 2026, by and between Rekor Systems, Inc. and Robert A. Berman.

10.2

Employment Agreement, entered into on March 24, 2026ds and effective as of November 17, 2025, by and between Rekor Systems, Inc. and Joseph Nalepa.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

REKOR SYSTEMS, INC.

Date: March 27, 2026

/s/ Joseph Nalepa

Name: Joseph Nalepa

Title: Chief Financial Officer

EX-10.1

Filename: d119059dex101.htm · Sequence: 2

EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is dated as of March 20, 2026, (the

“Effective Date”) by and between Rekor Systems, Inc. (the “Company”), a Delaware corporation and Robert A. Berman (the “Executive”). As of the Effective Date, this Agreement fully amends and

restates that certain Employment Agreement, dated as of May 15, 2019, by and between the Company and the Executive (the “2019 Agreement”).

Recitals

WHEREAS,

the Company and the Executive previously entered into the 2019 Agreement, outlining the terms and conditions of the Executive’s employment with the Company.

WHEREAS, the Company and the Executive desire to amend and restate the terms and conditions of the 2019 Agreement and for the Executive

to continue his employment with the Company pursuant to the terms set forth herein.

NOW THEREFORE, in consideration of the mutual

promises and agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

1. Employment.

a) The

Executive’s title as of the Effective Date shall be President and Chief Executive Officer of the Company. In such capacity, the Executive shall report to the Board of Directors of the Company (the “Board”). The position is

considered “exempt”, and the Executive is not entitled to overtime pay.

b) The Executive’s employment hereunder shall

be effective as of the Effective Date of this Agreement and shall continue until June 30, 2028, unless terminated earlier pursuant to Section 8; provided that, on such end date and each annual anniversary thereafter (such date and

each annual anniversary thereof, a “Renewal Date”), this Agreement shall be deemed to be automatically extended, upon the same terms and conditions, for successive periods of one (1) year, unless either party provides written

notice of its intention not to extend the term of this Agreement at least ninety (90) calendar days prior to the applicable Renewal Date. The period during which the Executive is employed by the Company hereunder is hereinafter referred to as

the “Employment Term.”

2. Compensation.

a) As salary compensation for the Executive’s employment, the Company shall pay the Executive a base salary at an annualized rate of

$395,000 (the “Base Salary”) in installments payable in accordance with the Company’s customary payroll practices and the law.

b) The Executive shall be considered for periodic performance bonuses as determined by the Board in its sole discretion. The Executive

understands that nothing herein should be interpreted as a guarantee of any discretionary bonus or pro rata bonus upon termination of this Agreement or employment.

c) Within thirty (30) calendar days of the Effective Date, the Company shall grant to

the Executive a one-time stock grant of One Million (1,000,000) shares of the Company’s common stock, which shares shall be fully vested as of the date of grant. The Parties agree that the Company shall

pay its share of any FICA taxes owed with respect to such grant and that the grant shall be subject to withholding only with respect to the employee’s share of any mandatory FICA or other withholding, but that no withholding shall be made with

respect to income taxes. Executive agrees that he shall be responsible for all income tax payments related to this grant and shall indemnify and hold the Company harmless for all income tax liability related to this grant.

d) The Executive acknowledges and agrees that this Agreement amends, restates, replaces and supersedes the 2019 Agreement as well as any other

employment agreement he may have with the Company or any of its affiliates and further acknowledges and agrees that any and all amounts payable to him by the Company, other than those set forth herein, have been paid in full.

3. Duties. The Executive shall have such executive-level duties as are assigned or delegated to him by the Board, consistent with his

title. The Executive shall devote substantially all of his working time and attention to the business of the Company, and shall cooperate fully in the advancement of the best interests of the Company. Except with written approval of the Board in

advance, the Executive, during the term of this Agreement or any extensions or renewals thereof agrees not to engage in any activities outside of the scope of the Executive employment that would detract from, or interfere with, the fulfillment of

his responsibilities or duties under this Agreement.

4. Expenses. Subject to Section 8 and subject to

compliance by the Executive with such policies regarding expenses and expense reimbursement as may be adopted from time to time by the Company, the Executive is authorized to incur reasonable expenses in the performance of his duties hereunder in

furtherance of the business and affairs of the Company, provided that the Company will reimburse the Executive for all such reasonable expenses upon the presentation by the Executive of an itemized account satisfactory to the Company in

substantiation of such expenses when claiming reimbursement.

5. Employee Benefits; Vacations. The Executive shall be eligible to

participate in such 401(K), medical and other employee benefit plans of the Company that may be in effect or modified from time to time, to the extent eligible under the terms of those plans, on the same basis as other similarly situated executive

officers of the Company. The Executive shall be entitled to paid vacation in accordance with the policies of the Company in effect from time to time, as determined by the Board.

6. Indemnification and Liability Insurance.

a) The Executive shall be indemnified and held harmless consistent with the provisions of the by-laws

of the Company in effect at that time, but in no event shall the Executive receive diminished rights or rights less than those rights provided by applicable law.

b) During the Employment Term and for a period of three (3) years thereafter, the

Company shall purchase and maintain, at its expense, directors’ and officers’ liability insurance providing coverage to the Executive on terms that are no less favorable than the coverage provided to other directors and similarly

situated executives of the Company.

7. Taxation of Payments and Benefits. The Company shall make deductions, withholdings and tax

reports with respect to payments and benefits under this Agreement to the extent that it reasonably and in good faith believes that it is required to make such deductions, withholdings and tax reports. Payments under this Agreement shall be in

amounts net of any such deductions or withholdings. Nothing in this Agreement shall be construed to require the Company to make any payments to compensate the Executive for any adverse tax effect associated with any payments or benefits or for any

deduction or withholding from any payment or benefit.

8. Termination. Either the Executive or the Company may terminate the

employment relationship at any time, with or without Cause (as defined in Section 12) on advance notice as provided herein or with immediate effect if the termination is for Cause. The Executive agrees to give the Company

at least thirty (30) calendar days prior written notice if he decides to terminate his employment. Except in the case of a termination for Cause, the Company agrees that it will provide identical notice. Upon termination of the

Executive’s employment for any reason, the Executive will be entitled to any earned but unpaid Base Salary, any bonus approved prior to termination, reimbursement for unreimbursed expenses properly incurred by the Executive prior to the

termination, his vested stock grants, RSUs and stock options. In addition, if terminated for reasons other than Cause, the Executive shall be entitled to such employee benefits, if any, to which the Executive may be entitled under the

Company’s employee benefit plan(s) as of the termination. Additionally:

a) In the event the Executive dies during the term of this

Agreement, Executive’s employment hereunder shall automatically terminate as of the date of death.

b) In the event the Executive

becomes totally disabled during the term of this Agreement, this Agreement may be terminated by the Company as of the date of total disability in its sole discretion. For purposes of this Agreement, the Executive shall be deemed totally disabled if

the Executive becomes so physically or mentally disabled as to be incapable, even with a reasonable accommodation by the Company to the extent required by applicable law, of performing the Executive’s duties for a period of ninety

(90) calendar days in any twelve (12) month period. Any question as to the existence of the Executive’s total disability as to which the Executive and the Company cannot agree shall be determined in writing by a qualified independent

physician mutually acceptable to the Executive or his representative(s) and the Company. Such determination shall be final and conclusive for purposes under this Agreement (“Disability”).

c) Subject to compliance with Sections 8(d) and (h), and subject to Section 8(g), in the event that

the Executive’s employment is terminated by the Company for reasons other than death, Disability, or Cause (as defined in Section 12) or in the event the Executive resigns his employment for Good Reason (as defined in

Section 12), the Executive will be provided a severance package equal to twelve (12) months of the Base Salary (the “Separation Payment”). The Separation Payment shall be paid in twelve

(12) equal monthly installments and shall begin within fifteen (15) business days of the effective date of the release described in Section 8(h).

d) In the event that the Executive’s employment is terminated for Cause or the

Executive resigns without Good Reason, the Executive will not be entitled to any Separation Payment or any other severance remuneration.

e) Notwithstanding any termination of the Executive’s employment for any reason, the Executive will continue to be bound by the

provisions of a confidentiality, non-solicitation and invention assignment agreement in the form approved by the Company (the “Proprietary Rights Agreement”).

f) Notwithstanding any termination of the Executive’s employment for any reason, the Executive will continue to make himself reasonably

available to cooperate with the Company in connection with any actual or potential litigation, arbitration, regulatory proceeding, investigation, audit, or other legal or administrative matter involving the Company that relates to matters occurring

during the Employment Term. Such cooperation shall include, without limitation, providing information, participating in interviews, depositions, and testimony, and assisting with the preparation of documents and other materials as reasonably

requested by the Company or its counsel. The Company shall reimburse the Executive for reasonable out-of-pocket expenses incurred in connection with providing such

cooperation upon the presentation by the Executive of an itemized account satisfactory to the Company in substantiation of such expenses when claiming reimbursement.

g) Upon a Change in Control during the Employment Term, the Company shall be entitled to terminate the Executive’s employment within one

hundred and twenty (120) calendar days of the Change in Control, such payment to be made in lieu of the Separation Payment. In such event, the Company shall pay to the Executive, within forty-five (45) calendar days of the termination (or

otherwise in accordance with applicable law, if the law requires earlier or later payment), in one lump sum payment an amount equal to three (3) times the Executive’s then current Base Salary, such payment to be in lieu of payment of the

Separation Payment and subject to the Executive’s compliance with Section 8(h). For purposes of this Agreement, a “Change in Control” shall mean: (i) a merger, consolidation or statutory share

exchange in which (x) the Company is a constituent party and the Company issues capital shares pursuant to such merger or consolidation, pursuant to which the equity holders of the Company as constituted immediately prior to such transaction

will not own a majority, by voting power, of the capital shares of (A) the surviving or resulting entity, or (B) if the surviving or resulting entity is a wholly-owned subsidiary of another entity immediately following such merger or

consolidation, the parent corporation of such surviving or resulting entity; (ii) the sale, exchange, lease, transfer, exclusive license or other disposition of all or substantially all of the assets of the Company and its subsidiaries, taken

as a whole, whether occurring as part of a single transaction or series of related transactions, or the disposition (whether by merger or otherwise) of one or more of the subsidiaries if substantially all of the assets of the Company and its

subsidiaries, taken as a whole, are held by such subsidiary or subsidiaries, except where such sale, exchange, lease, transfer, exclusive license or other disposition is to a wholly-owned subsidiary of such person; or (iii) a transaction or

series of transactions pursuant to which any person(s) acting together become(s) the “beneficial owner” (as defined in federal securities law), directly or indirectly, of more than fifty percent (50%) of the Company’s equity

securities.

h) The Separation Payment provided pursuant to Section 8(c) and

the payment provided for in Section 8(g) shall be conditioned upon the Executive’s execution and non-revocation of a general release of liabilities favoring the Company, which

is prepared and provided by the Company, substantially in the form of Exhibit A to this Agreement (the “Release”). The Executive’s refusal to execute such general release shall constitute a waiver by the Executive of

any and all benefits referenced in Sections 8(c) and (g). The Company will not be obligated to commence or continue any such payments to the Executive under Section 8(c) or (g) in the event the Executive

breaches the terms of this Agreement, the Release or the Proprietary Rights Agreement and fails to cure such breach within thirty (30) calendar days of written notice thereof detailing such breach, if such breach is deemed curable by the

Company in its reasonable discretion.

i) The Company shall have the right to offset against any Separation Payment: (i) any

undisputed amount owed by the Executive to the Company, provided that the Company possesses, or obtains from the Executive, written confirmation of such undisputed amount; and (ii) the amount of any claims it has against the Executive by reason

of any breach of this Agreement, the Release or the Proprietary Rights Agreement.

j) Immediately upon termination of his employment for

any reason, the Executive will return all documents, records, data, apparatus, equipment and other physical property that have been furnished to the Executive by the Company or produced by the Executive in connection with Executive’s

employment, which will remain the sole property of the Company.

9. Confidentiality, Non–Solicitation and Invention Assignment

Agreement. The Company considers the protection of its confidential information and proprietary materials to be very important. Therefore, as a condition of the Executive’s employment, the Executive has previously executed the Proprietary

Rights Agreement. For the avoidance of doubt, the terms of the Proprietary Rights Agreement shall survive any termination of this Agreement as set forth therein.

10. Documents, Records, etc. Subject to the terms and provisions of the Proprietary Rights Agreement: (i) all

documents, records, data, apparatus, equipment and other physical property, whether or not pertaining to Confidential Information (as defined in the Proprietary Rights Agreement), which are furnished to the Executive by the Company or are produced

by the Executive in connection with the Executive’s employment will be and will remain the sole property of the Company; and (ii) the Executive will return to the Company all such materials and property as and when requested by the

Company.

11. No Conflict. Each party hereby represents and warrants to the other that: (i) this Agreement constitutes that

party’s legal and binding obligation, enforceable against it or him in accordance with its terms; (ii) it or his execution and performance of this Agreement does not and will not breach any other agreement, arrangements, understanding,

obligation of confidentiality or employment relationship to which it or he is a party or by which it or he is bound; and (iii) while the Executive is employed by the Company, it or he will not enter into any agreement, either written or oral,

in conflict with this Agreement or its or his obligations hereunder.

12. Definitions.

a) The term “Cause” shall mean: (i) discovery by the Company that any of the material information provided to the

Company concerning the Executive’s qualifications, employment history and experience, certifications or licenses was untrue or that the Executive concealed a physical or mental condition that could materially impair the Executive’s

ability to perform his responsibilities properly without reasonable accommodation as required by applicable law, if any; (ii) the Executive’s intentional, willful or knowing failure or refusal to follow, support or enforce any legal or

regulatory requirement applicable to the Company or the Company’s lawful policies, as adopted by the Board from time to time, or perform the Executive’s duties (other than as a result of physical or mental illness, accident or injury);

(iii) the Executive’s intentional, willful or knowing failure or unreasonable refusal to perform the Executive’s duties (other than as a result of physical or mental illness, accident or injury) provided the Executive is given

written notice describing such failure and fails to cure the same within fifteen (15) calendar days after receipt of such notice; (iv) dishonesty, willful or gross misconduct, gross ineptitude, or willful violation of any law, rule, or

regulation (other than minor traffic violations or similar offenses) or other illegal conduct by the Executive in connection with the Executive’s employment with the Company or breach of fiduciary duty that involves personal profit;

(v) the Executive’s conviction of, or plea of guilty or nolo contendere to, a charge of commission of a felony (exclusive of any felony relating to negligent operation of a motor vehicle) or a crime of moral turpitude;

(vi) competition with the Company or unauthorized use of any trade secret or other confidential information of the Company; and (vii) a material breach by the Executive of this Agreement, the Proprietary Rights Agreement or any other

written agreement between the Executive and the Company or any of its affiliates; provided, however, that the Company shall be required to (A) give the Executive fifteen (15) calendar days prior written notice of its intention to

terminate the Executive for Cause and (B) provide the specific grounds thereof in the event the Company invokes clause (ii) of this Section or a finding of “gross ineptitude” as set forth in clause (iv) of this Section,

and the Executive shall have the opportunity during such fifteen (15) calendar day period to meet with a Company representative designated by the Board and cure such event if such event is capable of being cured; provided, further, that

in the event that the Executive terminates his employment with the Company during such fifteen (15) calendar day period for any reason, such termination shall be considered a termination for Cause. For purposes of this Section: (x) no act

or failure to act on the part of the Executive shall be considered “willful” unless it is intentionally done, or intentionally omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s

action or omission was in the best interests of the Company; and (y) any willful or grossly negligent conduct of the Executive that results in the failure of the Company to comply with a significant financial, statutory or regulatory

requirement shall be considered grounds for termination for Cause.

b) The term “Good Reason” shall mean: (i) any

material reduction of the Executive’s Base Salary, unless similar reductions are imposed on all similarly situated executive officers of the Company; (ii) any material breach by the Company of its obligations under this Agreement

including, but not limited to, its obligation to assign Executive duties consistent with Section 3 of this Agreement; (iii) a change without the Executive’s consent in the principal location of the

Company’s office to an office that is more than sixty-five (65) driving miles by the shortest reasonable driving route from the previous location (if such move materially increases the Executive’s commute); and (iv) the

Company’s failure to obtain an agreement from any successor to the Company to assume and agree to perform this Agreement in generally the same manner and to the same extent that the Company would be required to perform if no succession had

taken

place, except where such assumption occurs by operation of law; provided, however, that in any case the Executive seeks to invoke “Good Reason” under this Agreement, the

Executive: (x) must provide the Company with written notice of the Executive’s intention to terminate the Executive’s employment and the specific grounds thereof within fifteen (15) calendar days after the Executive’s

discovery of the event that the Executive believes constitutes Good Reason; (y) must give the Company an opportunity to cure for fifteen (15) calendar days following receipt of such notice from the Executive, if the event is capable of

being cured, or, if not capable of being cured, to have the Company’s representatives meet with the Executive and the Executive’s counsel to be heard regarding whether Good Reason exists; and (z) must terminate employment within

fifteen (15) calendar days after the end of the cure period if the Good Reason condition is not cured.

c) The term

“person” shall mean any individual, corporation, firm, association, partnership, other legal entity or other form of business organization.

13. Section 409A of Internal Revenue Code.

a) Anything in this Agreement to the contrary notwithstanding, if at the time of the Executive ’s separation from service within the

meaning of Section 409A of the Internal Revenue Code (the “Code”), the Company determines that the Executive is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the

extent any payment or benefit that the Executive becomes entitled to under this Agreement on account of the Executive’s separation from service would be considered deferred compensation subject to the 20 percent (20%) additional tax

imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be provided until the date that is the earlier of

(A) six (6) months and one (1) day after the Executive’s separation from service, or (B) the Executive’s death. If any such delayed cash payment is otherwise payable on an installment basis, the first payment shall

include a catch-up payment covering amounts that would otherwise have been paid during the six (6) month period but for the application of this provision, and the balance of the installments shall be

payable in accordance with their original schedule.

b) The parties intend that this Agreement will be administered in accordance with the

Code. To the extent that any provision of this Agreement is ambiguous as to its compliance with the Code, the provision shall be read in such a manner so that all payments hereunder comply with the Code. The parties agree that this Agreement may be

amended, as reasonably requested by either party, and as may be necessary to fully comply with the Code and all related rules and regulations in order to preserve the payments and benefits provided hereunder without additional cost to either party.

c) The determination of whether and when a separation from service has occurred shall be made by the Company in accordance with the

presumptions set forth in Treasury Regulation Section 1.409A-1(h).

d) The Company makes no

representation or warranty and shall have no liability to the Executive or any other person if any provisions of this Agreement are determined to constitute deferred compensation subject to the Code but do not satisfy an exemption from, or the

conditions of, such Section.

14. Successors and Assigns; No Assignment. This Agreement shall be binding upon, and

shall inure to the benefit of the parties and their respective successors, heirs, distributes and personal representatives including, with respect to the Company, any successor of Company through merger, acquisition, corporate reorganization, or any

other business combination. The Executive may not assign this Agreement without the prior written consent of the Company. The Company may assign this Agreement, without the consent of the Executive, to any successor (whether direct or indirect, by

purchase, merger, consolidation, or otherwise) to all or substantially all of the business or assets of the Company. In the event of such an assignment, the term “Company” as used herein shall be deemed to refer to such assignee or

successor.

15. Notices. All notices and other communications required or permitted hereunder or necessary or convenient in

connection herewith shall be in writing and shall be deemed to have been given when hand-delivered, mailed by registered or certified mail (three (3) calendar days after deposited), or sent by a nationally recognized courier service, to the

following address (provided that notice of change of address shall be deemed given only when received):

If to the Company:

Rekor Systems, Inc.

6721 Gateway Drive, Suite 400

Columbia, Maryland 21046

Attn: Board of Directors

If to Executive:

Robert A. Berman

2811 Aquetong Road

New Hope, Pennsylvania 18938

or to such other names and addresses as the Company or the Executive, as the case may be, shall

designate by notice to each other person entitled to receive notices in the manner specified in this Section 15. A copy of any such notice or communication under this Section 15 shall be transmitted via

electronic mail to the party’s corresponding email address on the same day as the notice’s or communication’s hand-delivery, mailing, or transmission by courier service.

16. Changes; No Waiver; Remedies Cumulative. The terms and provisions of this Agreement may not be modified or amended, or any of the

provisions hereof waived, temporarily or permanently, without the prior written consent of each of the parties hereto. Either party’s waiver or failure to enforce the terms of this Agreement or any similar agreement in one instance shall not

constitute a waiver of any rights hereunder with respect to other violations of this or any other agreement. No remedy conferred upon the Company or the Executive by this Agreement is intended to be exclusive of any other remedy, and each and every

such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity.

17. Construction. Neither this Agreement nor any uncertainty or ambiguity in this Agreement shall be construed against any party

hereto, whether under any rule of construction or otherwise, because the parties acknowledge that each party has cooperated in the drafting, negotiation and preparation of this Agreement.

18. Governing Law. This Agreement and (unless otherwise provided) all amendments

hereof and waivers and consents hereunder shall be governed by the law of the State of Maryland, without regard to conflicts of law principles.

19. Severability. The Executive and the Company agree that should any provision of this Agreement or the Proprietary Rights Agreement

be declared illegal, invalid or unenforceable by a Court of competent jurisdiction, the validity of the remaining parts, terms or provisions shall not be affected thereby, and said illegal or invalid part, term or provision shall be deemed not to be

a part of this Agreement or the Proprietary Rights Agreement, as applicable.

20. Headings; Counterparts. All section headings are

for convenience only. This Agreement may be executed in several counterparts, each of which is an original, and may be transmitted electronically, with such electronic copy serving as an original.

21. Entire Agreement. This Agreement and the Proprietary Rights Agreement contain the entire agreement between the parties with respect

to the subject matter hereof and supersede other prior and contemporaneous arrangements, agreements, promises, warranties and understandings with respect thereto. No statement, representation, warranty, covenant or agreement of any kind not

expressly set forth in this Agreement or the Proprietary Rights Agreement will affect, or be used to interpret, change or restrict, the express terms and provisions of this Agreement or the Proprietary Rights Agreement.

[Signature page to follow]

IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the

date first above written.

REKOR SYSTEMS, INC.

By:

/s/ Paul A. de Bary

Name: Paul A. de Bary

Title: Lead Director

ROBERT A. BERMAN

/s/ Robert A. Berman

EXHIBIT A

[FORM OF RELEASE AGREEMENT]

THIS AGREEMENT AND RELEASE (this “Release”), dated

as of [date] (the “Effective Date”), is entered into by and between [________] (“Executive”) and Rekor Systems, Inc. (the “Company”) (jointly, the “Parties”).

WHEREAS, Executive is currently employed by the Company; and

WHEREAS, Executive’s employment with the Company will terminate effective as of [date].

NOW, THEREFORE, in consideration of the mutual promises and covenants contained in this Release and other good and

valuable consideration, the sufficiency of which the Parties hereby acknowledge, Executive and the Company hereby agree as follows:

Executive shall be provided severance pay and other benefits (the “Severance Benefits”) in

accordance with the terms and conditions of the employment agreement by and between Executive and the Company dated as of [_______] (the “Employment Agreement”); provided, that no such Severance Benefits shall be paid or

provided if Executive revokes this Release pursuant to Section 4 below.

Executive, for and on behalf of themself and their heirs, successors, agents, representatives, executors and

assigns, hereby waives and releases any common law, statutory or other complaints, claims, demands, expenses, damages, liabilities, or causes of action (each, a “Claim”) arising out of or relating to Executive’s employment

or termination of employment with the Company, both known and unknown, in law or in equity, which Executive may now have or ever had against the Company or any equity holder, agent, representative, administrator, trustee, attorney, insurer,

fiduciary, employee, director or officer of any member of the Company, including their successors and assigns (collectively, the “Company Releasees”). Released Claims include, without limitation, any claim for any

Severance Benefits which might have been due to Executive under any agreement executed by and between the Company and Executive, and any complaint, charge or cause of action arising out of their employment with the Company under any federal or state

Law or regulation, including, but not limited to, the Age Discrimination in Employment Act of 1967 (“ADEA,” a law which prohibits discrimination on the basis of age against individuals who are age 40 or older), the National Labor

Relations Act, the Civil Rights Act of 1991, the Americans with Disabilities Act of 1990, Title VII of the Civil Rights Act of 1964, the Employee Retirement Income Security Act of 1974, the Family Medical Leave Act, the Equal Pay Act, the Securities

Act of 1933, the Securities Exchange Act of 1934, the Rehabilitation Act of 1973, the Worker Adjustment and Retraining Notification Act of 1988, all state anti-discrimination and wage payment laws, all as amended, as well an any other applicable

federal, state and local statutes, ordinances and regulations. By signing this Agreement, Executive acknowledges that Executive intends to waive and release any rights known or unknown Executive may have against the Company Releasees under these and

any other laws; provided, that Executive does not

waive or release: (i) Claims with respect to the right to enforce this Agreement or those provisions of the Employment Agreement that expressly survive the termination of Executive’s

employment with the Company; (ii) Claims with respect to any vested right Executive may have under any employee benefit or compensation plan of the Company; (iii) any rights to coverage under any applicable insurance policy; or

(iv) Claims that cannot be validly waived as a matter of law.

THIS MEANS THAT, BY SIGNING THIS RELEASE, EXECUTIVE WILL HAVE WAIVED

ANY RIGHT EXECUTIVE MAY HAVE HAD TO BRING A LAWSUIT OR MAKE ANY CLAIM AGAINST THE COMPANY RELEASEES BASED ON ANY ACTS OR OMISSIONS OF THE COMPANY RELEASEES UP TO THE DATE OF THE SIGNING OF THIS RELEASE, TO THE EXTENT PROVIDED FOR ABOVE.

NOTWITHSTANDING THE ABOVE, NOTHING IN THIS AGREEMENT SHALL PREVENT EXECUTIVE FROM: (I) INITIATING OR CAUSING TO BE INITIATED ON THEIR BEHALF ANY PROCEEDING AGAINST THE COMPANY BEFORE ANY LOCAL, STATE OR FEDERAL AGENCY, COURT OR OTHER BODY

CHALLENGING THE VALIDITY OF THE WAIVER OF THEIR CLAIMS UNDER ADEA CONTAINED IN THIS AGREEMENT (BUT NO OTHER PORTION OF SUCH WAIVER); OR (II) INITIATING OR PARTICIPATING IN (BUT NOT BENEFITING FROM) AN INVESTIGATION OR PROCEEDING CONDUCTED BY A

GOVERNMENTAL AGENCY CHARGED WITH ENFORCING LAWS UNDER THEIR JURISDICTION, SUCH AS THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION.

Executive acknowledges that Executive has been given twenty-one

(21) calendar days from the date of receipt of this Release to consider all of the provisions of this Release and, to the extent he has not used the entire twenty-one (21) calendar day period prior

to executing this Agreement, Executive does hereby knowingly and voluntarily waive the remainder of said twenty-one (21) calendar day period. Executive further acknowledges that he has read this Release

carefully, has been advised by the Company to consult an attorney, and fully understands that by signing below he is giving up certain rights which he may have to sue or assert a Claim against any of the Company Releasees, as described herein and

the other provisions hereof. Executive acknowledges that he has not been forced or pressured in any manner whatsoever to sign this Release, and Executive agrees to all of its terms voluntarily.

Executive shall have seven (7) calendar days from the date of Executive’s execution of this Release

to revoke this Release, including with respect to all Claims referred to herein (including, without limitation, any and all Claims arising under ADEA). If Executive revokes this Release, Executive will be deemed not to have accepted the terms of

this Release.

Each party and its counsel have reviewed this Release and has been provided the opportunity to review this

Release and accordingly, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Release. Instead, the language of all parts of this Release

shall be construed as a whole, and according to their fair meaning, and not strictly for or against either party.

This Release will be deemed to be made and entered into in the State of Maryland, and be governed by, and

construed and enforced in accordance with, the laws of the State of Maryland, without regard to its principles of conflicts of laws.

[Signature Page to Follow]

IN WITNESS WHEREOF, the Parties have executed this Release as of the date first above

written.

REKOR SYSTEMS, INC.

By:

Name:

Title:

ROBERT A. BERMAN

EX-10.2

Filename: d119059dex102.htm · Sequence: 3

EX-10.2

Exhibit 10.2

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is dated as of November 17, 2025, (the “Effective

Date”) by and between Rekor Systems, Inc. (the “Company”), a Delaware corporation, and Joseph Nalepa (the “Executive”). As of the Effective Date, this Agreement supersedes and replaces any employment

agreement the Executive may have previously entered into with the Company or its affiliates.

Recitals

WHEREAS, The Company desires to employ the Executive, and the Executive wishes to accept such employment with the Company, upon the

terms and conditions set forth in this Agreement.

NOW THEREFORE, in consideration of the mutual promises and agreements set forth

herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

1. Employment.

a) The

Executive’s title as of the Effective Date shall be Chief Financial Officer of the Company. In such capacity, the Executive shall report to the Company’s Chief Executive Officer and perform such duties as may be reasonably be requested

by the Company’s Chief Executive Officer or the Audit Committee of the Company’s Board of Directors (the “Board”). The position is considered “exempt”, and the Executive is not entitled to overtime pay.

b) The Executive’s employment hereunder shall be effective as of the Effective Date of this Agreement and shall continue until

June 30, 2028 unless terminated earlier pursuant to Section 8; provided that, on such end date and each annual anniversary thereafter (such date and each annual anniversary thereof, a “Renewal Date”), this

Agreement shall be deemed to be automatically extended, upon the same terms and conditions, for successive periods of one (1) year, unless either party provides written notice of its intention not to extend the term of this Agreement at least

thirty (30) days prior to the applicable Renewal Date. The period during which the Executive is employed by the Company hereunder is hereinafter referred to as the “Employment Term.”

2. Compensation.

a) As

salary compensation for the Executive’s employment, the Company shall pay the Executive a base salary at an annualized rate of $260,000 (the “Base Salary”) in installments payable in accordance with the Company’s

customary payroll practices and the law. The Base Salary can be increased, as determined by the Board with respect to any renewal of this Agreement or at any other such time as the Board deems fit in its sole discretion.

b) During the Employment Term, for each year commencing July 1,2026, the Executive shall be considered for discretionary bonuses which

may be conditioned on achieving performance targets (each a “Discretionary Bonus”) as determined by the Board in its sole discretion.

(i) In addition, for the period from the Effective Date until May 1,

2026, the Executive shall be eligible to receive a bonus equal to $75,000 (the “Initial Bonus”) assuming the Company’s timely compliance with filing of the Company’s 10-K for the

2025 calendar year and receipt of a satisfactory report from the Company’s independent auditors with respect to the 2025 Company financial statements. Subject to the Executive’s continued employment through the payment date, the Interim

Bonus shall be paid in May of 2026, and will be subject to all required deductions and withholdings.

(ii) For the 12 month

period commencing July 1, 2026 and for each subsequent 12 month period during the Employment Term, the Executive shall be eligible to receive a Discretionary Bonus (which may be more or less than $150,000), based upon key performance measures

mutually agreed upon between the Executive and the Compensation Committee of the Board in consultation with the Audit Committee of the Board. Subject to the Executive’s continued employment, the Discretionary Bonus shall be paid in the first

regular payroll period in July and will be subject to all required deductions and withholdings. The Executive understands that nothing herein should be interpreted as a guarantee of any discretionary performance bonus or pro-rata bonus upon termination of employment.

3. Duties. The Executive shall have such

executive-level duties as are assigned or delegated to him by the Chief Executive Officer or the Audit Committee of the Company’s Board of Directors, consistent with his title. The Executive shall devote substantially all of his working time

and attention to the business of the Company, and shall cooperate fully in the advancement of the best interests of the Company. Except with written approval of the Board in advance, the Executive, during the term of this Agreement or any extensions

or renewals thereof agrees not to engage in outside employment or engage in any activities outside of the scope of the Executive’s employment that would detract from, or interfere with, the fulfillment of his responsibilities or duties under

this Agreement.

4. Expenses. Subject to Section 8 and subject to compliance by the Executive with such

policies regarding expenses and expense reimbursement as may be adopted from time to time by the Company, the Executive is authorized to incur reasonable expenses in the performance of his duties hereunder in furtherance of the business and affairs

of the Company, provided that the Company will reimburse the Executive for all such reasonable expenses upon the presentation by the Executive of an itemized account satisfactory to the Company in substantiation of such expenses approved by the

Chief Executive Officer or, if such approval is impractical, the Chair of the Audit Committee of the Board.

5. Employee Benefits;

Vacations. The Executive shall be eligible to participate in such 401(K), medical and other employee benefit plans of the Company that may be in effect or modified from time to time, to the extent eligible under the terms of those plans, on the

same basis as other similarly situated executive officers of the Company. The Executive shall be entitled to paid vacation in accordance with the policies of the Company in effect from time to time, as determined by the Board.

6. Indemnification and Liability Insurance.

a) The Executive shall be indemnified and held harmless consistent with the provisions of the by-laws

of the Company in effect at that time, but in no event shall the Executive receive diminished rights or rights less than those rights provided by applicable law.

b) During the Employment Term and for a period of three (3) years thereafter, the Company shall purchase and maintain, at its expense,

directors’ and officers’ liability insurance providing coverage to the Executive on terms that are no less favorable than the coverage provided to directors and other similarly situated executives of the Company.

7. Taxation of Payments and Benefits. The Company shall make deductions, withholdings and tax reports with respect to payments and

benefits under this Agreement to the extent that it reasonably and in good faith believes that it is required to make such deductions, withholdings and tax reports. Payments under this Agreement shall be in amounts net of any such deductions or

withholdings. Nothing in this Agreement shall be construed to require the Company to make any payments to compensate the Executive for any adverse tax effect associated with any payments or benefits or for any deduction or withholding from any

payment or benefit.

8. Termination. Either the Executive or the Company may terminate the employment relationship at any time,

with or without Cause (as defined in Section 12) on advance notice as provided herein or with immediate effect if the termination is for Cause. The Executive agrees to give the Company at least thirty (30) days prior

written notice if he decides to terminate his employment, provided that any such notice shall be no less than 60 days prior to any deadline for filing of the Company’s quarterly or annual financial reports with the SEC. Except in the case of a

termination for Cause, the Company agrees that it will provide identical notice. Upon termination of the Executive’s employment for any reason, the Executive will be entitled to any earned but unpaid Base Salary, any bonus earned and approved

by the Board prior to termination, reimbursement for unreimbursed expenses properly incurred by the Executive prior to the termination, and any vested stock grants, RSUs and stock options. In addition, if terminated for reasons other than Cause, the

Executive shall be entitled to such employee benefits, if any, to which the Executive may be entitled under the Company’s employee benefit plan(s) as of the termination. Additionally:

a) In the event the Executive dies during the term of this Agreement, Executive’s employment hereunder shall automatically terminate as

of the date of death.

b) In the event the Executive becomes disabled during the term of this Agreement, this Agreement may be terminated

by the Company as of the date of Disability in its sole discretion. For purposes of this Agreement, the Executive shall be deemed disabled if the Executive becomes so physically or mentally disabled as to be incapable, even with a reasonable

accommodation by the Company to the extent required by applicable law, of performing the Executive’s duties at a level consistent with the performance of similar executives in comparable companies for a period of ninety (90) days in any

twelve (12) month period (“Disability”). Any question as to the existence of the Executive’s Disability as to which the Executive and the Company cannot agree shall be determined in writing by a qualified independent

physician mutually acceptable to the Executive or his representative(s) and the Company. Such determination shall be final and conclusive for purposes under this Agreement.

c) Subject to compliance with Sections 8(d) and (e), in the event that the

Executive’s employment is terminated by the Company for reasons other than death, Disability, or Cause (as defined in Section 12) or in the event the Executive resigns his employment for Good Reason (as defined in

Section 12), the Executive will be provided a separation payment equal to twelve (12) months of the Base Salary (the “Separation Payment”). The Separation Payment shall be paid in twelve

(12) equal monthly installments and shall begin within fifteen (15) business days of the effective date of the release described in Section 8(g).

d) In the event that the Executive’s employment is terminated for Cause or the Executive resigns without Good Reason, the Executive will

not be entitled to any Separation Payment or any other severance remuneration.

e) Notwithstanding any termination of the

Executive’s employment for any reason, the Executive will continue to be bound by the provisions of a confidentiality, non-solicitation and invention assignment agreement in the form approved by the

Company (the “Proprietary Rights Agreement”).

f) Notwithstanding any termination of the Executive’s employment

for any reason, the Executive will continue to make himself reasonably available to cooperate with the Company in connection with any actual or potential litigation, arbitration, regulatory proceeding, investigation, audit, or other legal or

administrative matter involving the Company that relates to matters occurring during the Employment Term. Such cooperation shall include, without limitation, providing information, participating in interviews, depositions, and testimony, and

assisting with the preparation of documents and other materials as reasonably requested by the Company or its counsel. The Company shall reimburse the Executive for reasonable

out-of-pocket expenses incurred in connection with providing such cooperation upon the presentation by the Executive of an itemized account satisfactory to the Company

in substantiation of such expenses when claiming reimbursement. In the event that time reasonably incurred by the Executive after termination of employment in providing the cooperation contemplated by this Section 8(f)

exceeds fifteen (15) hours, the Executive shall be compensated for such hours at an hourly rate reasonably agreed by the Executive and the Company.

g) Upon a Change in Control during the Employment Term, the Company shall be entitled to terminate the Executive’s employment within one

hundred and twenty (120) calendar days of the Change in Control. In such event, the Company shall pay to the Executive, within forty-five (45) calendar days of the termination (or otherwise in accordance with applicable law, if the law

requires earlier or later payment), in one lump sum payment an amount equal to two (2) times the Executive’s then current Base Salary, such payment to be in lieu of payment of the Separation Payment and subject to the Executive’s

compliance with Section 8(h). For purposes of this Agreement, a “Change in Control” shall mean: (i) a merger, consolidation or statutory share exchange in which (x) the Company is a constituent

party and the Company issues capital shares pursuant to such merger or consolidation, pursuant to which the equity holders of the Company as constituted immediately prior to such transaction will not own a majority, by voting power, of the capital

shares of (A) the surviving or resulting entity, or (B) if the surviving or resulting entity is a wholly-owned subsidiary of another entity immediately following such merger or consolidation, the parent corporation of such surviving or

resulting entity; (ii) the sale, exchange, lease, transfer, exclusive license or other disposition of all or substantially all of the assets of the Company and

its subsidiaries, taken as a whole, whether occurring as part of a single transaction or series of related transactions, or the disposition (whether by merger or otherwise) of one or more of the

subsidiaries if substantially all of the assets of the Company and its subsidiaries, taken as a whole, are held by such subsidiary or subsidiaries, except where such sale, exchange, lease, transfer, exclusive license or other disposition is to a

wholly-owned subsidiary of such person; or (iii) a transaction or series of transactions pursuant to which any person(s) acting together become(s) the “beneficial owner” (as defined in federal securities law), directly or

indirectly, of more than fifty percent (50%) of the Company’s equity securities.

h) The Separation Payment provided pursuant to

Section 8(c) and the payment provided for in Section 8(g) shall be conditioned upon the Executive’s execution and non-revocation of a general release

of liabilities favoring the Company, which is prepared and provided by the Company, substantially in the form of Exhibit A to this Agreement (the “Release”). The Executive’s refusal to execute such general release

shall constitute a waiver by the Executive of any and all benefits referenced in Sections 8(c) and (g). The Company will not be obligated to commence or continue any such payments to the Executive under Sections 8(c) and

(g) in the event the Executive breaches the terms of this Agreement, the Release or the Proprietary Rights Agreement and fails to cure such breach within thirty (30) calendar days of written notice thereof detailing such breach, if

such breach is deemed curable by the Company in its reasonable discretion.

i) The Company shall have the right to offset against any

Separation Payment: (i) any undisputed amount owed by the Executive to the Company, provided that the Company possesses, or obtains from the Executive, written confirmation of such undisputed amount; and (ii) the amount of any claims it

has against the Executive by reason of any breach of this Agreement, the Release or the Proprietary Rights Agreement.

j) Immediately upon

termination of his employment for any reason, the Executive will return all documents, records, data, apparatus, equipment and other physical property that have been furnished to the Executive by the Company or produced by the Executive in

connection with Executive’s employment, which will remain the sole property of the Company.

9. Confidentiality,

Non–Solicitation and Invention Assignment Agreement. The Company considers the protection of its confidential information and proprietary materials to be very important. Therefore, as a condition of the Executive’s employment, the

Executive has previously executed the Proprietary Rights Agreement. For the avoidance of doubt, the terms of the Proprietary Rights Agreement shall survive any termination of this Agreement as set forth therein.

10. Documents, Records, etc. Subject to the terms and provisions of the Proprietary Rights Agreement: (i) all

Company.

11. No Conflict. Each party hereby represents and warrants to the other that:

(i) this Agreement constitutes that party’s legal and binding obligation, enforceable against it or him in accordance with its terms; (ii) it or his execution and performance of this Agreement does not and will not breach any other

agreement, arrangements, understanding, obligation of confidentiality or employment relationship to which it or he is a party or by which it or he is bound; and (iii) while the Executive is employed by the Company, it or he will not enter into

any agreement, either written or oral, in conflict with this Agreement or its or his obligations hereunder.

12. Definitions.

a) The term “Cause” shall mean: (i) discovery by the Company that any of the material information provided to the

that in the event that the Executive terminates his employment with the Company during such fifteen (15) calendar day period for any reason, such termination shall be considered a termination for Cause. For purposes of this Section: (x) no

act or failure to act on the part of the Executive shall be considered “willful” unless it is intentionally done, or intentionally omitted to be done, by the Executive in bad faith or without reasonable belief that the Executive’s

requirement shall be considered grounds for termination for Cause.

b) The term “Good Reason” shall mean: (i) any material involuntary

reduction of the Executive’s Base Salary, unless similar reductions are imposed on all similarly situated executive officers of the Company; (ii) any material breach by the Company of its obligations under this Agreement including, but

not limited to, its obligation to assign Executive duties consistent with Section 3 of this Agreement; (iii) a change without the Executive’s consent in the principal location of the Company’s office to an

office that is more than sixty-five (65) driving miles by the shortest reasonable driving route from the previous location (if such move materially increases the Executive’s commute); and (iv) the Company’s failure to obtain an

agreement from any successor to the Company to assume and agree to perform this Agreement in generally the same manner and to the same extent that the Company would be required to perform if no succession had taken place, except where such

assumption occurs by operation of law; provided, however, that in any case the Executive seeks to invoke “Good Reason” under this Agreement, the Executive: (x) must provide the Company with written notice of the

Executive’s intention to terminate the Executive’s employment and the specific grounds thereof constituting Good Reason within fifteen (15) calendar days after the Executive’s discovery of the event that the Executive believes

constitutes Good Reason; (y) must give the Company an opportunity to cure for fifteen (15) calendar days following receipt of such notice from the Executive, if the event is capable of being cured, or, if not capable of being cured, to

have the Company’s representatives meet with the Executive and the Executive’s counsel to be heard regarding whether Good Reason exists; and (z) must terminate employment within fifteen (15) calendar days after the end of the

cure period if the Good Reason condition is not cured.

c) The term “person” shall mean any individual, corporation,

firm, association, partnership, other legal entity or other form of business organization.

13. Section 409A of

Internal Revenue Code.

a) Anything in this Agreement to the contrary notwithstanding, if at the time of the Executive ’s

separation from service within the meaning of Section 409A of the Internal Revenue Code (the “Code”), the Company determines that the Executive is a “specified employee” within the meaning of

Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that the Executive becomes entitled to under this Agreement on account of the Executive’s separation from service would be considered deferred compensation

subject to the 20 percent (20%) additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit shall not be

provided until the date that is the earlier of (A) six (6) months and one (1) day after the Executive’s separation from service, or (B) the Executive’s death. If any such delayed cash payment is otherwise payable on

an installment basis, the first payment shall include a catch-up payment covering amounts that would otherwise have been paid during the six (6) month period but for the application of this provision, and

the balance of the installments shall be payable in accordance with their original schedule.

b) The parties intend that this Agreement

will be administered in accordance with the Code. To the extent that any provision of this Agreement is ambiguous as to its compliance with the Code, the provision shall be read in such a manner so that all payments hereunder comply with the Code.

The parties agree that this Agreement may be amended, as reasonably requested by either party, and as may be necessary to fully comply with the Code and all related rules and regulations in order to preserve the payments and benefits provided

hereunder without additional cost to either party.

c) The determination of whether and when a separation from service has occurred shall be

made by the Company in accordance with the presumptions set forth in Treasury Regulation Section 1.409A-1(h).

d) The Company makes no representation or warranty and shall have no liability to the Executive or any other person if any provisions of this

Agreement are determined to constitute deferred compensation subject to the Code but do not satisfy an exemption from, or the conditions of, such Section.

14. Successors and Assigns; No Assignment. This Agreement shall be binding upon, and shall inure to the benefit of the parties and

their respective successors, heirs, distributes and personal representatives including, with respect to the Company, any successor of Company through merger, acquisition, corporate reorganization, or any other business combination. The Executive may

not assign this Agreement without the prior written consent of the Company. The Company may assign this Agreement, without the consent of the Executive, to any successor (whether direct or indirect, by purchase, merger, consolidation, or otherwise)

to all or substantially all of the business or assets of the Company. In the event of such an assignment, the term “Company” as used herein shall be deemed to refer to such assignee or successor.

15. Notices. All notices and other communications required or permitted hereunder or necessary or convenient in connection herewith

shall be in writing and shall be deemed to have been given when hand-delivered, mailed by registered or certified mail (three (3) calendar days after deposited), or sent by a nationally recognized courier service, to the following address

(provided that notice of change of address shall be deemed given only when received):

If to the Company:

Rekor Systems, Inc.

6721 Gateway Drive, Suite 400

Columbia, Maryland 21046

Attn: Board of Directors and Chief Executive Officer

If to Executive:

Joseph Nalepa

6721 Columbia Gateway Dr.

Ste. 400

Columbia, MD 21046

or to such other names and addresses as the Company or the Executive, as the case may be, shall designate by

notice to each other person entitled to receive notices in the manner specified in this Section 15. A copy of any such notice or communication under this Section 15 shall be transmitted via electronic mail to

the party’s corresponding email address on the same day as the notice’s or communication’s hand-delivery, mailing, or transmission by courier service.

16. Changes; No Waiver; Remedies Cumulative. The terms and provisions of this

Agreement may not be modified or amended, or any of the provisions hereof waived, temporarily or permanently, without the prior written consent of each of the parties hereto. Either party’s waiver or failure to enforce the terms of this

Agreement or any similar agreement in one instance shall not constitute a waiver of any rights hereunder with respect to other violations of this or any other agreement. No remedy conferred upon the Company or the Executive by this Agreement is

intended to be exclusive of any other remedy, and each and every such remedy shall be cumulative and shall be in addition to any other remedy given hereunder or now or hereafter existing at law or in equity.

17. Construction. Neither this Agreement nor any uncertainty or ambiguity in this Agreement shall be construed against any party

hereto, whether under any rule of construction or otherwise, because the parties acknowledge that each party has cooperated in the drafting, negotiation and preparation of this Agreement.

18. Governing Law. This Agreement and (unless otherwise provided) all amendments hereof and waivers and consents hereunder shall be

governed by the law of the State of Maryland, without regard to conflicts of law principles.

19. Severability. The Executive and

the Company agree that should any provision of this Agreement or the Proprietary Rights Agreement be declared illegal, invalid or unenforceable by a Court of competent jurisdiction, the validity of the remaining parts, terms or provisions shall not

be affected thereby, and said illegal or invalid part, term or provision shall be deemed not to be a part of this Agreement or the Proprietary Rights Agreement, as applicable.

20. Headings; Counterparts. All section headings are for convenience only. This Agreement may be executed in several counterparts, each

of which is an original, and may be transmitted electronically, with such electronic copy serving as an original.

21. Entire

Agreement. This Agreement and the Proprietary Rights Agreement contain the entire agreement between the parties with respect to the subject matter hereof and supersede other prior and contemporaneous arrangements, agreements, promises,

warranties and understandings with respect thereto. No statement, representation, warranty, covenant or agreement of any kind not expressly set forth in this Agreement or the Proprietary Rights Agreement will affect, or be used to interpret, change

or restrict, the express terms and provisions of this Agreement or the Proprietary Rights Agreement.

[Signature page to follow]

IN WITNESS WHEREOF, the parties have executed this Employment Agreement as of the

date first above written.

REKOR SYSTEMS, INC.

By:

/s/ Robert A. Berman

Name:

Robert A. Berman

Title:

Chief Executive Officer

JOSEPH NALEPA