EXHIBIT 10.1


                            EMPLOYMENT AGREEMENT

                                    WITH

                               LOUIS SCAFURI

AGREEMENT entered into as of May 1, 1999 between Louis Scafuri residing at
133 Nichols Road, Cohasset MA 02025, USA ("Employee"), E.S.C. (D) Inc., a
Delaware company with offices located at 100 Crescent Road, Needham, MA
02194, USA ("ESC" or the "Subsidiary") and ESC Medical Systems Ltd., an
Israeli company with offices located at Yokneam, Israel (unless the context
otherwise requires , references to ESC Ltd. shall be included in references
to "ESC" or the "Company").

                            W I T N E S S E T H:

WHEREAS, ESC is in the business of marketing medical instruments developed
and manufactured by ESC Ltd. (the "Business);

WHEREAS, ESC and ESC Ltd. desires to employ Employee as CEO North
American Operations.

NOW THEREFORE, in consideration of the premises and mutual agreements
hereinafter contained, the parties hereto agree as follows:

1.      EMPLOYMENT.

        With effect from the Effective Date (as defined in Section 3), ESC
        employs Employee and Employee accepts employment with ESC upon the
        terms and conditions set forth herein.

2.      DUTIES.

2.1     ESC and ESC Ltd. hereby engages Employee to serve as CEO North
        American Operations during the term hereof;

2.2     Employee shall devote his full business time and attention to the
        Business of the Company and shall perform his duties diligently and
        promptly for the benefit of ESC. During his employment hereunder,
        Employee shall not undertake or accept any other paid or unpaid
        employment or occupation or engage in or be associated with,
        directly or indirectly, any other business, duties or pursuits
        except with the prior written consent of the Board of Directors.
        Employee shall report regularly to the President of ESC Ltd.

3.      TERM.

3.1     Employee's employment under this Agreement shall commence on April
        1, 1999 (the "Effective Date") and shall end on the earliest of:
        (i) the death or disability (as defined herein) of Employee; (ii)
        the termination of Employee's employment by ESC for cause (as
        defined herein) after providing thirty (30) days advance notice (as
        defined herein); or (iii) three (3) years from the Effective Date.
        The term will extend for additional one year periods at March 31 of
        each year commencing on March 31, 2000 unless either party delivers
        a notice of intention not to renew no later than January 1 of any
        year.

3.2     Either party may terminate this agreement without cause, as
        hereinafter defined, by six months prior written notice, during
        which period Employee shall continue his services unless otherwise
        instructed by the Board. In the event of a Change in Control of the
        Company, as defined in the Attachment, the Company may not exercise
        this termination provision. In such event, Employee will be
        employed by the Company for a minimum period of one year following
        a termination notice to Employee by Company. All the terms and
        conditions will apply during this two year period.

3.3     For the purpose of this paragraph 3, "disability" shall mean any
        physical or mental illness or injury as a result of which Employee
        remains absent from work for a period of two (2) successive months.
        Disability shall occur upon the end of such two-month period.

3.4     For the purpose of this paragraph 3, "cause" shall exist if
        Employee (i) breaches any of the material terms or conditions
        hereof including, without limitation, the terms of paragraphs 8 or
        9; (ii) substantially fails to perform the Employee's areas of
        responsibility set forth herein; (iii) engages in willful
        misconduct or acts in bad faith with respect to ESC, in connection
        with and related to the employment hereunder; (iv) is convicted of
        a felony or is held liable by a court of competent jurisdiction for
        common law fraud against ESC; or (v) fails to comply with the
        instructions of the Company's Board of Directors in a manner
        materially detrimental to the Company, provided that, with respect
        to clauses (i), (ii) and (v), if Employee has cured any such
        condition (that is reasonably susceptible to cure) within 30 days
        of the advance notice (as defined herein) then "cause" shall be
        deemed not to exist. For purposes of this paragraph 3, "advance
        notice" shall constitute a written notice delivered to Employee
        that sets forth with particularity the facts and circumstances
        relied upon by ESC as the basis for cause.

3.5     During the period following notice of termination by any party for
        any reason, the Employee shall cooperate with ESC and use his best
        efforts to assist the integration into the ESC organization of the
        person or persons who will assume the Employee's responsibilities.

4.      COMPENSATION.

        During the term hereof, and subject to the performance of the
        services required to be performed hereunder by Employee, ESC shall
        pay to Employee for all services rendered by Employee under this
        Agreement a salary, payable not less often than monthly and in
        accordance with ESC's normal and reasonable payroll practices, in a
        monthly gross amount of $20,833 exclusive of any benefits to or on
        behalf of Employee provided by or through the Company (the "Gross
        Salary"). Employee shall, in addition to the above, receive a sign
        or bonus $125,000 of which $63,000 has been paid upon execution of
        the engagement letter and $62,000 will be paid during January 2000.

5.      VACATION.

        Employee shall be entitled to three (3) weeks of paid vacation
        during each year that this Agreement is in effect, to be taken at
        times subject to the reasonable approval of ESC. Vacation time
        shall not be accumulated but Employee shall be paid for any unused
        vacation remaining at the end of the year in which vacation time is
        accrued.

6.      401(K) AND INSURANCE

        The Company shall allow Employee to participate in its 401(K) Plan,
        once implemented.

7.      BONUS

        In addition to the compensation set forth above, Employee shall be
        awarded an annual bonus of up to 80% of the annual Gross Salary
        payment if the Company meets bottom line and top line performance
        annual goals st by the Ltd.'s President.

8.      OPTIONS

        Employee shall be granted options to purchase Ordinary Shares of
        the Company in the amount of 450,000 shares ("Options") as follows:

8.1     Options to acquire 200,000 of the Option shares shall be
        exercisable in equal amounts over a three-year period commencing on
        the anniversary of the date of grant; i.e., 33% at the end of one
        year, 66% at the end of the second year, 100% at the end of the
        third year.

8.2     Options to acquire 150,000 of the Option shares shall be execrable
        in equal parts over a five-year period commencing on the
        anniversary of the date of grant; i.e., 20% at the end of one year,
        40% at the end of the second year, 60% at the end of the third
        year, 80% at the end of the fourth year and 100% at the end of the
        fifth year. Irrespective of the terms of exercise set forth in this
        subsection 8.2, the options to acquire 150,000 shares described
        herein shall be exercisable immediately in its entirety in the
        event the shares of the Company listed on NASDAQ trade at a closing
        bid price of $20 or more for 20 successive trading days.

8.3     Options to acquire 100,000 of the Option shares shall be
        exercisable in equal parts over a five-year period commencing on
        the anniversary of the date of grant; i.e., 20% at the end of one
        year, 40% at the end of the second year, 60% at the end of the
        third year, 80% at the end of the fourth year and 100% at the end
        of the fifth year. Irrespective of the terms of exercise set forth
        in this subsection 8.3, the options to acquire 40,000 shares
        described herein shall be exercisable immediately in its entirety
        in the event the shares of the Company listed on NASDAQ trade at a
        closing bid price of $25 or more for 20 successive trading days.

8.4     All Options granted hereunder shall be exercisable immediately upon
        a Change of Control as defined in the Appendix attached hereto.

        The Options will be subject to the Company's option plan and the terms
        of the option agreement to be entered between the Employee and ESC
        Ltd.

9.      SECRECY AND NONDISCLOSURE.

        The Employee shall treat as secret and confidential all of the
        processes, methods, formulas, procedures, techniques, software,
        designs, data, drawings and other information which are not of
        public knowledge or record pertaining to the Business of the
        Company and ESC Ltd. (existing, potential and future), including
        without limitation, all business information relating to customers
        and suppliers and products of which the Employee becomes aware
        during and as a result of his employment or association with the
        Company and ESC Ltd., and Employee shall not disclose, use,
        publish, or in any other manner reveal, directly or indirectly, at
        any time during or after the term of this Agreement, any such
        processes, methods, formulas, procedures, techniques, software,
        designs, data, drawings and other information pertaining to ESC's
        existing or future Business or products. The Employee may disclose
        or use such information, if at all, only with the prior express
        written consent of the Company and ESC Ltd., as the case may be.

10.     NON-COMPETITION.

10.1    Employee agrees that during the term of this Agreement and for a
        period of two (2) years after he ceases to be employed by the
        Company he shall not, directly or indirectly, for his or its own
        account or as an employee, officer, director, partner, joint
        ventures, shareholder, investor, consultant or otherwise (except as
        an investor in a corporation whose stock is publicly traded and in
        which Employee holds less than 5% of the outstanding shares) sell,
        distribute or in any way market any product, service or technology
        of the Company or ESC Ltd. or interest himself or itself in or
        engage in any business or enterprise, anywhere in the world, that
        directly or indirectly competes with the Business of the Company or
        ESC Ltd., that exists now or in the future during the term of this
        Agreement or its proposed in writing by the Company or ESC Ltd.
        prior to the time of termination or is based on similar technology
        to that of the Company or ESC Ltd.; provided that any such proposal
        is provided to Employee in writing within 30 days of the date of
        termination.

10.1.1  The restrictions in paragraph 10.1 shall not apply to any
        activities that are consented to in writing by the Board of
        Directors of the Company and ESC Ltd. after disclosure by Employee
        of his proposed activities.

10.2    Employee agrees that during a period of one year from termination
        of this Agreement he shall not employ directly or indirectly any
        individual then employed by the Company or ESC Ltd.

10.3    Employee acknowledges that the restricted period of time and
        geographical area specified under paragraph 10.1 hereof are
        reasonable, in view of the nature of the business in which the
        Company and ESC Ltd. are engaged and Employee's knowledge of the
        Business and products of the Company and ESC Ltd.

10.4    Notwithstanding anything contained in paragraph 10.3 to the
        contrary, if the period of time or the geographical area specified
        under paragraph 10.1 hereof should be determined to be unreasonable
        in any judicial proceeding, then the period of time and area of the
        restriction shall be reduced so that this Agreement may be enforced
        in such area and during such period of time as shall be determined
        to be reasonable by such judicial proceeding.

10.5.1  No contract, agreement or arrangement for sales, research,
        development, promotion, maintenance or service of any medical
        equipment shall be entered into by Employee individually or some
        other person or entity unless the Board of Directors of ESC Ltd.
        has given its prior written consent;

10.5.2  Unless otherwise expressly agreed to by ESC Ltd., all sales or
        other disposition of the products or services of ESC Ltd. shall be
        made only by or through the Company and not by or through any other
        person or entity with which Employee is directly or indirectly
        associated.

11.     DEVELOPMENT RIGHTS.

        The Employee agrees and declares that all proprietary information
        including but not limited to trade secrets and know-how, patents
        and other rights in connection therewith developed by or with the
        contribution of Employee's efforts during his employment or
        association with the Company and/or ESC Ltd. shall be the sole
        property of the Company and ESC Ltd. and the Employee shall execute
        all documents necessary to assign any patents to ESC and otherwise
        transfer such proprietary rights to ESC.

12.     EMPLOYEE REPRESENTATIONS.

        The Employee represents and warrants to ESC that the execution and
        delivery of this Agreement and the fulfillment of the terms hereof
        (i) will not constitute a default under or breach of any agreement
        or other instrument to which he is a party or by which he is bound,
        including without limitation, any confidentiality or
        non-competition agreement, (ii) do not require the consent of any
        person or entity, and (iii) shall not utilize during the term of
        his employment any proprietary information of any third party,
        including prior employers of the Employee.

13.     BENEFIT.

        Except as otherwise herein expressly provided, this Agreement shall
        inure to the benefit of and be binding upon ESC, its successors and
        assigns, including, without limitation, any subsidiary or
        affiliated entity and shall inure to the benefit of, and be binding
        upon, Employee, his heirs, executors, administrators and legal
        representatives.

14.     ENTIRE AGREEMENT.

        This Agreement constitutes the entire understanding and agreement
        between the parties hereto, supersedes any and all prior
        discussions, agreements and correspondence with regard to the
        subject matter hereof, and may not be amended, modified or
        supplemented in any respect, except by a subsequent
        writing executed by both parties hereto.

15.     NOTICES.

        All notices, requests and other communications to any party
        hereunder shall be given or made in writing and telecopied, mailed
        (by registered or certified mail) or delivered by hand to the
        respective party at the address set forth in the caption of this
        Agreement or to such other address (or telecopier number) as such
        party may hereafter specify for the purpose of notice to the other
        party hereto. Each such notice, request or other communication
        shall be effective (i) if given by telecopier, when such telecopy
        is transmitted to the telecopier number specified herein and the
        appropriate answer back is received or (ii) if given by any other
        means, when delivered at the address specified herein.

16.     APPLICABLE LAW.

        This Agreement shall be governed by, and construed and enforced in
        accordance with, the laws of Israel without giving effect to
        principles of conflicts of law and the courts of Israel, District
        of Tel Aviv, shall have exclusive jurisdiction over the parties
        hereto and subject matter hereof.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first appearing above.


E.S.C. (D) INC.

By:     /s/ Shimon Eckhouse                        /s/ Louis Scafuri
    -------------------------------                ---------------------------
                                                   LOUIS SCAFURI

ESC MEDICAL SYSTEMS LTD.

By:     /s/ Shimon Eckhouse
    -------------------------------