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                                                                   EXHIBIT 10.17


                              EMPLOYMENT AGREEMENT


      THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of May 5, 1997,
by and between GERALD E. BISBEE, JR., PH.D. ("Executive") and APACHE MEDICAL
SYSTEMS, INC., a Delaware corporation ("Company").

      1. EMPLOYMENT TERM.  The Company will employ Executive for a term 
commencing on January 1, 1997 and ending on December 31, 1997 ("Employment
Term").  The Employment Term shall be automatically extended for additional
one-year terms, unless Executive or the Company's Board of Directors ("Board")
provides 90 days' advance written notice to the other of his/its intention not
to renew.
        
      2. EMPLOYMENT DUTIES.  Executive will serve as Chief Executive Officer 
of the Company and Chairman of the Board subject to the direction and control
of the Board.  Executive shall perform such duties as may be assigned from time
to time by the Board, and shall, on a full-time basis, serve the Company
faithfully, diligently and competently and to the best of his ability and in
accordance with this Agreement and applicable law.
        
      3. COMPENSATION.  In exchange for Executive's services under this
Agreement, the Company shall pay Executive as salary $205,000 per annum, which
shall be reviewed annually by the Compensation Committee of the Board during
its annual year-end compensation review ("Salary").  Salary shall be payable in
24 equal bi-monthly installments and otherwise in accordance with the Company's
ordinary payment practices.  Any payments made to Executive pursuant to this
Section 3 shall be treated as wages for withholding and employment tax
purposes. Executive shall participate in the Company's short-term cash
incentive plan or any successor thereto (the "short-term plan") and any stock
option or stock incentive plan generally available to executives pursuant to
the applicable plan documents.
        
      4. BENEFITS.

      (a)     Executive shall be entitled during the Employment Term to
              participate in such employee benefit plans and programs as are
              offered from time to time to employees of the Company to the
              extent that his position, tenure, compensation, age, health and
              other qualifications make him eligible to participate. The Company
              does not promise the adoption or continuance of any particular
              plan or program during the Employment Term, and Executive's (and
              his dependents') participation in any such plan or program shall
              be subject to the provisions, rules, regulations and laws
              applicable thereto.

      (b)     Executive shall be entitled to paid vacation in accordance with
              the Company's vacation policy applicable to senior executives.
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         (c)     The Company shall provide directors and officers liability
                 insurance coverage for Executive, which shall be pursuant to a
                 "claims arising" policy covering senior executives generally.

         (d)     The Company shall reimburse Executive for his reasonable legal
                 expenses in connection with the initial execution of this
                 Agreement and its termination, as applicable.

         5.      REIMBURSEMENT OF EXPENSES.  Executive shall be entitled to
reimbursement for ordinary, necessary and reasonable out-of-pocket business
expenses which he incurs in connection with performing his duties hereunder.
The reimbursement of all such expenses shall be made upon presentation of
satisfactory evidence of the amounts and nature of such expenses and shall be
subject to the Company's policies regarding business expenses and to the
reasonable approval of the Company's Chief Financial Officer.

         6.      NON-COMPETITION, NON-SOLICITATION.  Executive agrees to
continue to be bound by the terms of his Proprietary Information, Inventions,
Non-Competition and Non-Solicitation Agreement executed on April 19, 1996.

         7.      TERMINATION FOR CAUSE.  Notwithstanding any other provision of
this Agreement, Executive's employment with the Company and this Agreement may
be terminated by the Board (excluding Executive for this purpose) at any time
for Cause which shall include his (i) commission of an action against or in
derogation of the interests of the Company which constitutes an act of fraud,
dishonesty or moral turpitude or which, if proven in a court of law, would
constitute a violation of a criminal code or similar law, (ii) material breach
of any material duty or obligation imposed upon him pursuant to this Agreement,
(iii) breach of his Proprietary Information, Inventions, Non- Competition and
Non-Solicitation Agreement, and (iv) performance of any similar action that the
Board, in its sole discretion, may deem to be sufficiently injurious to the
interests of the Company so as to constitute substantial cause for termination.
If Executive is terminated for Cause as defined in (ii) or (iv) above and if
such Cause could be cured, the Company will give Executive notice of
termination stating the reason therefor and Executive may cure the Cause during
the 30 days following receipt of notice, which cure may not be unreasonably
rejected by the Board.  The Company may suspend Executive with pay during the
cure period.  In all other cases, Executive's employment with the Company shall
be terminated immediately and Executive may arbitrate pursuant to Section 12(g)
whether or not Cause existed.  In the event of termination under this Section
7, the Company's obligations under this Agreement shall cease and, except as
required by applicable law, Executive shall forfeit all rights to receive any
other compensation or benefits under this Agreement, except that he shall be
entitled to his Salary for services performed through the date of such
termination.  Without limitation, termination of Executive pursuant to this
Section 7 shall not relieve him of his obligations under Section 6.

         8.      INVOLUNTARY TERMINATION.  During the term of this Agreement,
Executive's employment with the Company and this Agreement may be terminated
for any reason or no reason without Cause by the Board, provided that in the
event of such termination or removal, he





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shall be entitled to continuation of his Salary and Company-provided health
benefits, life insurance and other welfare benefits for 24 months, and to a pro
rata payment of the short-term plan award that he would have been entitled to
receive had he been employed for the entire year in which termination occurs,
with pro-ration based on the number of days employed during such year.  Such
award shall be paid to Executive at the time that plan payments for the
applicable calendar year are typically paid to senior executives.  If the
Company notifies Executive of its intention not to renew this Agreement as
provided in Section 1, Executive shall be deemed to be terminated by the
Company as of the last day of the Employment Term and Executive shall be
entitled to Salary, benefits and a plan award as provided in this Section.
Without limitation, a termination of Executive pursuant to this Section 8 shall
not relieve him of his obligations under Section 6.

         9.      DISABILITY.  If Executive becomes totally disabled during the
Employment Term, his employment and this Agreement may be terminated by the
Board (excluding Executive for this purpose) as of the date such total
disability is determined.  Executive shall be considered to be totally disabled
if he is unable by reason of accident or illness (including mental illness) to
perform the material duties of his regular position with the Company and is not
expected to recover from his disability within a period of six months from the
commencement of the disability.  If at any time Executive claims or is claimed
by the Board to be totally disabled, a physician acceptable to both Executive
and the Board (which acceptances shall not be unreasonably withheld) shall be
retained by the Company and shall examine him.  Executive shall cooperate fully
with the physician.  If the physician determines that Executive is totally
disabled, the physician shall deliver to the Board a certificate certifying
both that Executive is totally disabled and the date upon which the condition
of total disability commenced.  The determination of the physician shall be
conclusive.  Executive's rights to any compensation and benefits under this
Agreement shall cease upon his total disability, except that he shall be
entitled to continuation of his Salary and Company-provided health benefits,
life insurance and other welfare benefits for 12 months, provided, however,
that any such payments shall be reduced by an amount equal to any payments and
health coverage received by Executive under any employment policy, arrangement
or agreement, disability insurance policy or other benefit plan of the Company
or Social Security.  Executive also shall receive the short-term plan award
that he would have been entitled to receive had he been employed for the entire
year in which termination occurs and a pro-rated award for the next following
year based on the number of days during the year for which he received
severance pay; provided that Executive's awards for these two years shall be
limited to the award portion(s) based on Company performance, except that, to
the extent Executive was actively employed during a portion of the first year,
such award shall include the award portion(s) based on individual performance
pro-rated for the time of his active employment.  Such awards shall be paid to
Executive at the time that plan payments for the applicable calendar year are
typically paid to senior executives.  Any termination by the Board pursuant to
this Section 9 shall be made in accordance with all applicable laws.  Without
limitation, a termination of Executive pursuant to this Section 9 shall not
relieve him of his obligations under Section 6.

         10.     CHANGE IN RESPONSIBILITY.  During the term of this Agreement,
Executive may terminate his employment with the Company and this Agreement upon
30 days' advance written





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notice in the event of any Change in Responsibility, which shall include a
material change in his duties or authority, a reduction in Salary or material
change in his benefits, or a similar material change in the terms and
conditions of his employment; provided that the Company may cure the Change in
Responsibility during the 30-day notice period which cure may not be
unreasonably rejected by Executive.  In the event that the Company fails to
cure, Executive shall be entitled to continuation of his Salary and
Company-provided health benefits, life insurance and other welfare benefits for
24 months, and to a pro rata payment of the short-term plan award that he would
have been entitled to receive had he been employed for the entire year in which
termination occurs, with proration based on the number of days employed during
such year.  Such award shall be paid to Executive at the time that plan
payments for the applicable calendar year are typically paid to senior
executives.  Notice of termination under this Section 10 shall be valid only if
received by the Company within 120 days after the Change in Responsibility
occurred.  Without limitation, a termination pursuant to this Section 10 shall
not relieve Executive of his obligations under Section 6.

         11.     CHANGE IN CONTROL.

         (a)     Executive shall give 90 days' written notice in advance of the
                 12-month anniversary of a Change in Control as to whether he
                 will terminate voluntarily as of such anniversary date, such
                 termination would entitle him to continuation of his Salary
                 and Company-provided health benefits, life insurance and other
                 welfare benefits for 24 months, and to a pro rata payment of
                 the short-term plan award that he would have been entitled to
                 receive had he been employed for the entire year in which
                 termination occurs, with pro-ration based on the number of
                 days employed during such year.  Such award shall be paid to
                 Executive at the time that plan payments for the applicable
                 calendar year are typically paid to senior executives.

         (b)     Each outstanding option issued to Executive and any future
                 option issued to Executive during the term of this Agreement
                 shall be amended to provide or shall provide, as the case may
                 be, provisions to the effect that (i) such option shall vest
                 in full upon a Change in Control, and (ii) to the extent that
                 Executive receives severance benefits under this Agreement,
                 the exercise period for the portion of any option vested at
                 the time of termination of employment shall be extended so
                 that such option may be exercised during a period of at least
                 30 months; provided, however, in no event shall the exercise
                 period be longer than the original option period established
                 in the option agreement.

         (c)     A Change in Control is the purchase or other acquisition by
                 any person, entity or group of persons, within the meaning of
                 Section 13(d) or 14(d) of the Securities Exchange Act of 1934
                 or any comparable successor provisions, of beneficial
                 ownership (within the meaning of Rule 13d-3 promulgated under
                 such Act) of 30% or more of either the outstanding shares of
                 common stock or the combined voting power of the Company's
                 then outstanding voting securities entitled to vote generally;
                 the approval by the stockholders of the Company of a
                 reorganization,





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                 merger or consolidation, in each case, with respect to which
                 persons who were stockholders of the Company immediately prior
                 to such reorganization, merger or consolidation do not,
                 immediately thereafter, own more than 30% of the combined
                 voting power entitled to vote generally in the election of
                 directors of the reorganized, merged or consolidated Company's
                 then outstanding securities; a liquidation or dissolution of
                 the Company; or the sale of all or substantially all of the
                 Company's assets.

         (d)     A Change in Control will not affect or diminish Executive's
                 rights under any provision of this Agreement, including,
                 without limitation, Sections 8, 9 and 10.  Without limitation,
                 a termination pursuant to this Section 11 shall not relieve
                 Executive of his obligations under Section 6.

         12.     MISCELLANEOUS.

         (a)     All notices hereunder shall be in writing and shall be deemed
                 given when delivered in person or when telecopied with hard
                 copy to follow, or three business days after being deposited
                 in the United States mail, postage prepaid, registered or
                 certified mail, or two business days after delivery to a
                 nationally recognized express courier, expenses prepaid,
                 addressed as follows:

                 If to Executive:
                 Gerald E. Bisbee, Jr., Ph.D.
                 110 Wellesley Drive
                 New Canaan, CT  06840
                 Telecopy:  (203) 972-3585

                 If to the Company:
                 Counsel
                 APACHE Medical Systems, Inc.
                 1650 Tysons Boulevard
                 Suite 300
                 McLean, VA  22102-3915
                 Telecopy:  (703) 749-7963

                 and/or at such other addresses as may be designated by notice
                 given in accordance with the provisions hereof.

         (b)     This Agreement shall be binding upon and inure to the benefit
                 of both parties and their respective heirs, successors and
                 permitted assigns.  No party shall assign this Agreement or
                 its rights hereunder without the prior written consent of the
                 other party; provided, however, that the Company shall assign
                 this Agreement to any person or entity acquiring all or
                 substantially all of the business of the Company (whether by
                 sale of stock, sale of assets, merger, consolidation or
                 otherwise).





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         (c)     This Agreement contains all of the agreements between the
                 parties with respect to the subject matter hereof, and this
                 Agreement supersedes all other agreements, oral or written,
                 between the parties with respect to the subject matter hereof.

         (d)     No change or modification of this Agreement shall be valid
                 unless the same shall be in writing and signed by both
                 parties.  No waiver of any provisions of this Agreement shall
                 be valid unless in writing and signed by the waiving party.
                 No waiver of any of the provisions of this Agreement shall be
                 deemed, or shall constitute, a waiver of any other provision,
                 whether or not similar, nor shall any waiver constitute a
                 continuing waiver, unless so provided in the waiver.

         (e)     If any provisions of this Agreement (or portions thereof)
                 shall, for any reason, be considered invalid or unenforceable
                 by any court of competent jurisdiction, such provisions (or
                 portions thereof) shall be ineffective only to the extent of
                 such invalidity or unenforceability, and the remaining
                 provisions of this Agreement (or portions thereof) shall
                 nevertheless be valid, enforceable and of full force and
                 effect.  The Company's rights under this Agreement shall not
                 be exclusive and shall be in addition to all other rights and
                 remedies available at law or in equity.

         (f)     The section headings or titles herein are for convenience of
                 reference only and shall not be deemed a part of this 
                 Agreement.

         (g)     In the event of a dispute between Executive and the Company
                 that is not resolved after a good faith effort by the parties,
                 such dispute will be submitted to arbitration.  The
                 arbitration will be conducted in accordance with the rules of
                 the American Arbitration Association in effect at the time of
                 the demand for arbitration and will be held in Washington,
                 D.C.  The arbitrator will be selected from an appropriate list
                 of qualified arbitrators, permit reasonable discovery, and
                 make written findings of fact and conclusions of law
                 reflecting the appropriate substantive law.  Either party must
                 deliver a request for arbitration in writing to the other
                 party within 60 days of the date the aggrieved party first has
                 knowledge of the event giving rise to the claim, otherwise the
                 claim will be considered void and waived.  The decision of the
                 arbitrator will be exclusive, final and binding on Executive
                 and the Company, and Executive is hereby giving up his right
                 to have any dispute decided in a court and by a jury.
                 Executive and the Company will share equally the cost of the
                 arbitrator.

         (h)     This Agreement shall be governed and controlled as to
                 validity, enforcement, interpretation, construction, effect
                 and in all other respects by the laws of the State of Virginia
                 applicable to contracts made in that State (other than any
                 conflict of laws rule which might result in the application of
                 the laws of any other jurisdiction).  Executive expressly
                 submits and consents in advance to the jurisdiction of the
                 federal and state courts of the State of Virginia for all
                 purposes in connection with any action or proceeding arising
                 out of or relating to this Agreement.





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         (i)     Any press release concerning termination of Executive's
                 employment shall be subject to Executive's review at least two
                 days prior to release.  Upon any termination of employment
                 other than as provided in Section 7, Executive shall be
                 entitled to retain his personal office and business equipment,
                 such as his Company-provided computer, cellular phone,
                 computer printer, facsimile machine, etc.

         IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.

                            GERALD E. BISBEE, JR., PH.D.
                            
                            
                                 /s/  Gerald E. Bisbee, Jr., Ph.D.
                            --------------------------------------
                                                                 
                                                                 
                            
                            
                            APACHE MEDICAL SYSTEMS, INC.
                            
                            
                                 /s/  Elizabeth A. Draper
                            -----------------------------
                                                        
                                                        
                            
                            
                             Elizabeth A. Draper, Secretary
                            ---------------------------------
                            Name and Title
                            




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