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                                                            Exhibit 10.43

                                   TAB PRODUCTS CO.
                         NONQUALIFIED STOCK OPTION AGREEMENT


    Tab Products Co. hereby grants to Philip C. Kantz (the "Optionee") an
option to purchase a total of 142,000 shares of the common stock of the Company
(the "Number of Option Shares") at an exercise price of $9.25 per share and in
the manner and subject to the provisions of this Option Agreement (the
"Option").  This Option has not been granted pursuant to the Company's stock
option plan.  For purposes of this Option Agreement, (i) "Company" means Tab
Products Co., a Delaware corporation, and any successor corporation thereto;
(ii) "Participating Company" means the Company and any present or future parent
or subsidiary corporations of the Company (as those terms are defined in
sections 424(e) and 424(f) of the Internal Revenue Code of 1986, as amended (the
"Code"); and (iii) "Participating Company Group" means, at any point in time,
all corporations collectively which are then Participating Companies.

    1.   GRANT OF THE OPTION.  The Option is granted effective as of January
27, 1997 (the "Date of Option Grant").  The Number of Option Shares and the
exercise price per share of the Option are subject to adjustment from time to
time as provided in paragraph 9.

    2.   STATUS OF THE OPTION.  The Option is intended to be a nonqualified
stock option and shall not be treated as an incentive stock option as described
in section 422 of the Code.

    3.   TERM OF THE OPTION.  The Option shall terminate and may no longer be
exercised on the first to occur of (a) the date ten (10) years after the Date of
Option Grant (the "Option Term Date"), (b) the last date for exercising the
Option following termination of the Optionee's employment as described in
paragraph 4(g), or (c) a Transfer of Control of the Company to the extent
provided in paragraph 4(h) below.

    4.   EXERCISE OF THE OPTION.

         (a)  RIGHT TO EXERCISE.  Subject to the Optionee's continued
employment with Participating Company Group, the Option shall become exercisable
in twelve (12) installments of 11,833.33 shares of common stock, with the first
such installment becoming exercisable on April 26, 1997 and subsequent
installments becoming exercisable at the end of each three (3) month period
thereafter.  In no event shall the Option be exercisable for more shares than
the Number of Option Shares.

         (b)  METHOD OF EXERCISE.  The Option may be exercised by written
notice to the Company which must state the election to exercise the Option, the
number of shares of stock for which the Option is being exercised and such other
representations and agreements as to the Optionee's investment intent with
respect to such shares as may be required pursuant to the provisions of this
Option Agreement.  The written notice must be signed by the Optionee and must be
delivered in person or by certified or registered mail, return receipt
requested, to the Chief Financial Officer of the Company, or other authorized
representative of the Participating Company Group, prior to the termination of
the Option as set forth in paragraph 3 above,

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accompanied by full payment of the exercise price for the number of shares of
stock being purchased.

         (c)  FORM OF PAYMENT OF OPTION PRICE.  Such payment shall be made
(i) in cash, by check, or cash equivalent, (ii) by tender to the Company of
shares of the Company's stock owned by the Optionee having a value not less than
the exercise price of the Option, which either have been owned by the Optionee
for more than six (6) months or were not acquired, directly or indirectly, from
the Company, (iii) by Immediate Sales Proceeds, as defined below, or (iv) by any
combination of the foregoing.  Notwithstanding the foregoing, the Option may not
be exercised by tender to the Company of shares of the Company's stock to the
extent such tender of stock would constitute a violation of the provisions of
any law, regulation and/or agreement restricting the redemption of the Company's
stock.  "Immediate Sales Proceeds" shall mean the assignment in form acceptable
to the Company of the proceeds of a sale of some or all of the shares acquired
upon the exercise of the Option pursuant to a program and/or procedure approved
by the Company (including, without limitation, through an exercise complying
with the provisions of Regulation T as promulgated from time to time by the
Board of Governors of the Federal Reserve System).  The Company reserves, at any
and all times, the right, in the Company's sole and absolute discretion, to
decline to approve any such program and/or procedure.

         (d)  TAX WITHHOLDING.  At the time the Option is exercised, in whole
or in part, or at any time thereafter as requested by the Company, the Optionee
shall authorize payroll withholding and otherwise agree to make adequate
provision for foreign, federal and state tax withholding obligations of the
Company, if any, which arise in connection with the Option, including, without
limitation, obligations arising upon (i) the exercise, in whole or in part, of
the Option, (ii) the transfer, in whole or in part, of any shares of stock
acquired on exercise of the Option, (iii) the operation of any law or regulation
providing for the imputation of interest, or (iv) the lapsing of any restriction
with respect to any shares acquired on exercise of the Option.

         (e)  CERTIFICATE REGISTRATION..  The certificate or certificates for
the shares of stock as to which the Option shall be exercised shall be
registered in the name of the Optionee, or, if applicable, the heirs of the
Optionee.

         (f)  FRACTIONAL SHARES.  The Company shall not be required to issue
fractional shares of stock upon the exercise of the Option

         (g)  TERMINATION OF EMPLOYMENT.

              (i)       TERMINATION OF THE OPTION.  If the Optionee ceases to
be an employee of the Participating Company Group for any reason except death or
disability within the meaning of section 422(c) of the Code, the Option, to the
extent unexercised and exercisable by the Optionee on the date on which the
Optionee ceased to be an employee, may be exercised by the Optionee within three
(3) months after the date on which the Optionee's employment terminates, but in
any event no later than the date of expiration of the Option term.  If the
Optionee's employment with the Participating Company Group is terminated because
of the death or disability of the Optionee within the meaning of section 422(c)
of the Code, the Option, to the

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extent unexercised and exercisable by the Optionee on the date on which the
Optionee ceased to be an employee, may be exercised by the Optionee (or the
Optionee's legal representative) at any time prior to the expiration of twelve
(12) months from the date the Optionee's employment terminated, but in any event
no later than the date of expiration of the Option term.  The Optionee's
employment shall be deemed to have terminated on account of death if the
Optionee dies within three (3) months after the Optionee's termination of
employment.

              (ii)      TERMINATION OF EMPLOYMENT DEFINED.  For purposes of
this Option Agreement, the Optionee's employment shall be deemed to have
terminated either upon an actual termination of employment or upon the
Optionee's employer ceasing to be a Participating Company.

              (iii)     EXTENSION IF EXERCISE PREVENTED BY LAW.
Notwithstanding the foregoing, if the exercise of the Option within the
applicable time periods set forth above is prevented because the issuance of
shares of Stock upon such exercise would constitute a violation of any
applicable federal or state securities law or other law or regulation, the
Option shall remain exercisable until three (3) months after the date the
Optionee is notified by the Company that the Option is exercisable, but in any
event no later than the date of expiration of the Option term.

              (iv)      LEAVE OF ABSENCE.  For purposes hereof, the Optionee's
employment with the Participating Company Group shall not be deemed to terminate
if the Optionee takes any military leave, sick leave, or other bona fide leave
of absence approved by the Company of ninety (90) days or less.  In the event of
a leave in excess of ninety (90) days, the Optionee's employment shall be deemed
to terminate on the ninety-first (91st) day of the leave unless the Optionee's
right to reemployment with the Participating Company Group remains guaranteed by
statute or contract.  Notwithstanding the foregoing, however, a leave of absence
shall be treated as employment for purposes of determining the exercisability
and/or vesting of the Option if and only if the leave of absence is designated
by the Company as (or required by law to be) a leave for which vesting credit is
given.

         (h)  TRANSFER OF CONTROL.  A "Transfer of Control" shall be deemed to
have occurred in the event any of the following occurs with respect to the
Company:

              (i)  the direct or indirect sale or exchange by the stockholders
of the Company of all or substantially all of the stock of the Company where the
stockholders of the Company before such sale or exchange do not retain, directly
or indirectly, at least a majority of the beneficial interest in the voting
stock of the Company after such sale or exchange;

              (ii) a merger or consolidation of the Company into or with
another corporation as a result of which the stockholders of the Company before
such merger or consolidation shall own less than fifty percent (50%) of the
voting securities of the surviving corporation; or

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              (iii)     the sale of all or substantially all of the Company's
assets (other than a sale or transfer to a subsidiary corporation of the Company
as defined in section 425(f) of the Code).

    In the event of a Transfer of Control, notwithstanding any provision hereof
to the contrary, the Option shall become fully exercisable and vested in full as
of the date ten (10) days prior to the consummation of the Transfer of Control.
In addition, the surviving, continuing, successor, or purchasing corporation or
parent corporation thereof, as the case may be (the "Acquiring Corporation"),
may either assume the Company's rights and obligations under the Option or
substitute for the Option a substantially equivalent option for the Acquiring
Corporation's stock.  The Option shall terminate effective as of the date of the
Transfer of Control to that extent that the Option is neither assumed or
substituted for nor exercised as of the date of the Transfer of Control.

    5.   RESTRICTIONS ON GRANT OF OPTION AND ISSUANCE OF SHARES.  The grant of
the Option and the issuance of shares of stock on exercise of the Option shall
be subject to compliance with all applicable requirements of federal and state
law with respect to such securities.  The Option may not be exercised if the
issuance of shares of stock upon such exercise would constitute a violation of
any applicable federal or state securities laws or other law or regulations.  In
addition, the Option may not be exercised unless (i) a registration statement
under the Securities Act of 1933, as amended (the "Securities Act"), shall at
the time of exercise of the Option be in effect with respect to the shares of
stock issuable on exercise of the Option or (ii) in the opinion of legal counsel
to the Company, the shares issuable upon exercise of the Option may be issued in
accordance with the terms of an applicable exemption from the registration
requirements of the Securities Act.  As a condition to the exercise of the
Option, the Company may require the Optionee to satisfy any qualifications that
may be necessary or appropriate, to evidence compliance with any applicable law
or regulation and to make any representation or warranty with respect thereto as
may be requested by the Company.

    6.   NON-TRANSFERABILITY OF THE OPTION.  The Option may be exercised during
the lifetime of the Optionee only by the Optionee and may not be assigned or
transferred in any manner except by will or by the laws of descent and
distribution.

    7.   LEGENDS.  The Company may at any time place legends referencing any
applicable federal or state securities law restrictions on all certificates
representing shares of stock subject to the provisions of this Option Agreement.
The Optionee shall, at the request of the Company, promptly present to the
Company any and all certificates representing shares of stock acquired pursuant
to the exercise of the Option in the possession of the Optionee in order to
effectuate the provisions of this paragraph.

    8.   RIGHTS AS A STOCKHOLDER OR EMPLOYEE.  The Optionee shall have no
rights as a stockholder with respect to any shares of stock covered by the
Option until the date of the issuance of a certificate or certificates for the
shares for which the Option has been exercised.  No adjustment shall be made for
dividends or distributions or other rights for which the record date is prior to
the date such certificate or certificates are issued, except as provided in
paragraph 9

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below.  Nothing in this Option Agreement shall confer upon the Optionee any
right to continue in the employ of a Participating Company or interfere in any
way with any right of the Participating Company Group to terminate the
Optionee's employment at any time.

    9.   ADJUSTMENTS FOR CHANGES IN CAPITAL STRUCTURE.  Appropriate adjustments
shall be made in the number and class of shares of stock subject to the Option
and in the option price of the Option in the event of a stock dividend, stock
split, reverse stock split, combination, reclassification, or like change in the
capital structure of the Company.  In the event a majority of the shares which
are of the same class as the shares of stock that are subject to the Option are
exchanged for, converted into, or otherwise become shares of another corporation
(the "New Shares"), the Company may unilaterally amend the Option to provide
that the Option is exercisable for New Shares.  In the event of any such
amendments, the number of shares of stock subject to and the option price of the
Option shall be adjusted in a fair and equitable manner.

    10.  BINDING EFFECT.  This Option Agreement shall inure to the benefit of
the successors and assigns of the Company and be binding upon the Optionee and
the Optionee's heirs, executors, administrators, successors and assigns.

    11.  ADMINISTRATION.  This Option Agreement shall be administered by the
Board of Directors of the Company (the "Board") and/or by a duly appointed
committee of the Board having such powers as shall be specified by the Board.
Any references herein to the Board shall also mean the committee if such
committee has been appointed and, unless the powers of the committee have been
specifically limited, the committee shall have all of the powers of the Board
granted herein.  All questions of interpretation of this Option Agreement shall
be determined by the Board, and such determinations shall be final and binding
upon all persons having an interest in the Option.  Any officer of a
Participating Company shall have the authority to act on behalf of the Company
with respect to any matter, right, obligation, or election which is the
responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right, obligation,
or election.

    12.  TERMINATION OR AMENDMENT.  The Board may terminate or amend the Option
at any time; provided, however, that no such termination or amendment may
adversely affect the Option or any unexercised portion hereof without the
consent of the Optionee.

    13.  INTEGRATED AGREEMENT.  This Option Agreement constitutes the entire
understanding and agreement of the Optionee and the Participating Company Group
with respect to the subject matter contained herein, and there are no
agreements, understandings, restrictions, representations, or warranties among
the Optionee and the Participating Company Group other than those as set forth
or provided for herein.  To the extent contemplated herein, the provisions of
this Option Agreement shall survive any exercise of the Option and shall remain
in full force and effect.

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    14.  APPLICABLE LAW.  This Option Agreement shall be governed by the laws
of the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within the State
of California.

                                  TAB PRODUCTS CO.



                                  By:_________________________________

                                  Title:_______________________________




    The Optionee represents that the Optionee is familiar with the terms and
provisions of this Option Agreement, and hereby accepts the Option subject to
all of the terms and provisions hereof.  The Optionee hereby agrees to accept as
binding, conclusive and final all decisions or interpretations of the Board upon
any questions arising under this Option Agreement.



Date:__________________________        ____________________________________
                                       Philip C. Kantz

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