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): December 27, 2007

OPTELECOM-NKF, INC.

(Exact name of registrant as specified in its charter)

Delaware

0-8828

52-1010850

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

12920 Cloverleaf Center Drive, Germantown, Maryland		20874
(Address of principal executive offices)		(ZIP Code)

Registrant’s telephone number, including area code: (301) 444-2200

(Former name or former address, if changed since last report)

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:

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

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

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

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

Section 5 — Corporate Governance and Management

Item 5.02.

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

Adoption of 2008 Incentive Plan

On December 27, 2007, the Compensation Committee of the Board of Directors (the “Compensation Committee”) of Optelecom-NKF, Inc. (the “Company”) approved the 2008 Incentive Plan (the “Plan”) for the Company. Under the Plan, employees of the Company, including executive officers, are eligible for both cash and equity awards, based on a combination of individual and Company performance.

The Plan includes a Global Management Cash Incentive Plan and a Global Management Stock Award Plan pursuant to which the Company’s named executive officers are eligible to receive cash and equity awards (the “Management Plan”). The Company’s Chief Executive Officer, Chief Operating Officer, Chief Financial Officer and Executive Vice President of Federal Systems will be eligible for a target cash payment under the Management Plan, based on 2008 base salary, if the Company’s consolidated income from operations for 2008, as determined in accordance with generally accepted accounting principles in the United States, meets the target established by the Compensation Committee. The target cash payments under the Management Plan are 55% of 2008 base salary for the Chief Executive Officer and 40% of 2008 base salary for the other named executive officers. A proportionate amount of the target cash payment will be made if the Company’s consolidated income from operations for 2008 is within 80% of the target established by the Compensation Committee, but no payments will be made under the Management Plan if consolidated income from operations for 2008 is below 80% of the target. The Chief Executive Officer, Chief Operating Officer, Chief Financial Officer and Executive Vice President of Federal Systems will not be eligible for a cash payment under the Management Plan, other than a 6% profit sharing payment available to employees generally, if the net profit of the Company’s North American operations, including certain inter-company adjustments and expenses for bonus payments under the Management Plan, does not exceed break-even.

Also, under the Management Plan, if the Company’s consolidated income from operations for 2008, as determined in accordance with GAAP, meets the target determined by the Compensation Committee, each named executive officer is eligible to receive a target equity award value consisting of a combination of options to purchase common stock and restricted stock awards. The target equity award values are $90,000 for the Chief Executive Officer and $70,000 for the other named executive officers. A proportionate amount of the target equity awards will be made if the Company’s consolidated income from operations for 2008 is within 80% of the target established by the Compensation Committee, but no awards will be made if consolidated income from operations for 2008 is below 80% of the target. Equity and cash awards under the Management Plan will be made in the first quarter of 2009.

SIGNATURES

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

	OPTELECOM-NKF, INC.



	By:	/s/ Edmund Ludwig
		Edmund Ludwig
		Chief Executive Officer

Date: January 3, 2008