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                                                                    Exhibit 10.1

                        ADDENDUM TO EMPLOYMENT AGREEMENT

                                 BY AND BETWEEN

                       TAB PRODUCTS, CO. AND PHILIP KANTZ

         This Addendum hereby amends the employment agreement by and between TAB
Products, Co. (the "Company") and Philip Kantz (the "Executive"), effective
January 27, 1997 (the "Employment Agreement") to provide as follows:

         1.       DEFINITION OF "TRANSFER OF CONTROL".

                  A. A "Transfer of Control" shall, in addition to the
                  definition set forth in Section 3(e) of the Employment
                  Agreement, mean the occurrence of either of the following
                  events:

                           (1)      the complete dissolution or liquidation of
                                    the Company; or

                           (2)      a change in the Board of Directors of the
                                    Company within a two-year period, as a
                                    result of which fewer than a majority of the
                                    Directors are Incumbent Directors.

                           For purposes of this Addendum, an Incumbent Director
                  is any director who is either: (a) a director of the Company
                  as of the effective date of this Addendum; or (b) a director
                  who is appointed or nominated for election to the Board of
                  Directors of the Company by the Board of Directors or its
                  nominating committee and whose nomination or appointment is
                  approved by with the affirmative votes of at least a majority
                  of the Incumbent Directors at the time of such appointment or
                  nomination (but shall not include an individual whose election
                  or nomination is in connection with an actual or threatened
                  proxy contest relating to the election of directors to the
                  Company).

         2.       SECTIONS 5(b) AND 5(c): TERMINATION WITHOUT CAUSE AND
                  TERMINATION WITHOUT CAUSE FOLLOWING A TRANSFER OF CONTROL.

                  A.  LUMP SUM PAYMENTS. Notwithstanding anything set forth in
                      the Employment Agreement, all severance payments made
                      pursuant to Sections 5(b) and 5(c) of the Employment
                      Agreement shall be paid in a lump sum within thirty (30)
                      days of the termination of employment.

                  B.  COBRA. If Executive becomes entitled to severance payments
                      pursuant to either Section 5(b) or 5(c) of the Employment
                      Agreement and if Executive elects continued medical
                      insurance coverage in accordance with the Consolidated
                      Omnibus Budget Reconciliation Act of 1985 ("COBRA"), the
                      Company shall pay Executive's COBRA

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                      premiums for the duration of such COBRA coverage, or
                      twenty-four (24) months, whichever is less. If
                      Executive's medical coverage immediately prior to the
                      date of termination included Executive's dependents,
                      the Company paid COBRA premiums shall include such
                      dependents.

         Executed effective as of September 21, 1999.

TAB Products, Co.


By:      /s/ Hans A. Wolf                            /s/ Philip C. Kantz
         ----------------                            -------------------
         Hans A. Wolf                                Philip Kantz

Its:     Chairman
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