<PAGE>   1
Exhibit 10.1


                    SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

     This amendment to Employment Agreement (the "Amendment") is made as of the
first day of January, 1997 by and among VITALCOM INC., a Delaware corporation
("VitalCom") and David L. Schlotterbeck (the "Executive").

                                   WITNESSETH

     WHEREAS, on or about August 29, 1995 VitalCom entered into an employment
agreement with Executive (the "Employment Agreement"), as modified on or about
January 5, 1996, pursuant to which the services of Executive had been retained
by VitalCom;

     WHEREAS, the Executive has terminated his employment with VitalCom
effective January 1, 1997 and VitalCom and Executive wish to modify certain
sections of the Employment Agreement;

     NOW, THEREFORE, on the basis of the foregoing premises and for good and
valuable consideration, the receipt of which is hereby acknowledged, including
the mutual covenants and agreements set forth herein, the parties agree as
follows:

1. Section 3(a) Compensation. Salary. Salary shall be changed from $220,000.00
per annum, to $198,000.00 per annum.

2. Section 6(f) Termination and Default. Payments, sentence number three, shall
be changed from: "In the event the Executive accepts other employment or engages
in his own business prior to the last date of the Severance Term, the Executive
shall forthwith notify the Company and the Company shall be entitled to set off
from amounts due the Executive under this Section 6(f) the amounts paid to the
Executive in respect of such other employment or business activity."

to:
"In the event the Executive accepts other employment or engages in his own
business prior to the last date of the Severance Term, the Executive shall
forthwith notify the Company and the Company shall be entitled to set off from
amounts due the Executive under this Section 6(f) the amounts paid to the
Executive in respect of such other employment or business activity; however, any
consulting performed for VitalCom pursuant to the Consulting Agreement between
VitalCom and Executive dated January 1, 1997 shall not be set off from amounts
due the Executive under this Section 6(f)."

3. Except as expressly set forth herein and the Amendment dated January 5, 1996,
the Employment Agreement will remain in full force and effect as originally
executed.

     IN WITNESS WHEREOF, the undersigned have executed this Second Amendment as
of the first day and year first above written.




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<PAGE>   2
                                /s/ David L. Schlotterbeck
                                --------------------------
                                David L. Schlotterbeck "Executive"


                                VITALCOM INC.


                                /s/ Donald W. Judson
                                --------------------
                                Donald W. Judson
                                Its: President & CEO, Chairman of the Board





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<PAGE>   3
                              EMPLOYMENT AGREEMENT


EMPLOYMENT AGREEMENT, dated as of this 29th day of August, 1995, between PACIFIC
COMMUNICATIONS, INC., a California corporation (the "Company"), and David L.
Schlotterbeck (the "Executive").

                                    RECITALS:

     WHEREAS, the Company recognizes that the future growth, profitability and
success of the Company's business will be substantially and materially enhanced
by the employment of the Executive by the Company;


WHEREAS, the Company desires to employ the Executive and the Executive has
indicated Executive's willingness to provide services, on the terms and
conditions set forth herein;


NOW, THEREFORE, on the basis of the foregoing premises and in consideration of
the mutual covenants and agreements contained herein, the parties hereto agree
AS follows:


     SECTION 1. EMPLOYMENT. The Company hereby agrees to employ the Executive
and the Executive hereby accepts employment with the Company, on the terms and
subject to the conditions hereinafter set forth. Subject to the terms and
conditions contained herein, the Executive shall serve as President and Chief
Executive Officer of the Company and, in such capacity, shall report directly to
the Chairman of the Company (the "Chairman") and shall have such duties as are
typically performed by a President and Chief Executive Officer of the Company in
the areas of managing the Company's operations including sales, marketing,
finance, engineering, R&D, quality, regulatory, and manufacturing functions on a
daily basis, together with such additional duties, commensurate with the
Executive's position as President and Chief Executive Officer the of the
Company, as may be assigned to the Executive from time to time by the Chairman
of the Company. The principal location of the Executive's employment shall be at
the Company's principal executive office located in Orange County, California,
although the Executive understands and agrees that Executive may be required to
travel from time to time for business reasons.



     SECTION 2. TERM. Subject to the provisions and conditions of this Agreement
(including Section 6), the Executive's employment hereunder shall commence on
the date hereof and shall continue during the period ending on the third
anniversary of the date hereof (the "Employment Term")

     SECTION 3. COMPENSATION.

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<PAGE>   4
     (a) SALARY. As compensation for the PERFORMANCE of the Executive's services
hereunder, the Company shall pay to the Executive a SALARY (the "Salary") of
$220,000.00 per annum with increases, if any, as may be approved by the Board of
Directors. The Salary shall be payable in accordance with the payroll practices
of the Company as the same shall exist from time to time. In no event shall the
Salary be decreased during the Employment Term.


     (b) BONUS Plan. The Executive shall be eligible to receive an annual cash
bonus ( "Bonus") which shall be determined by the Board of Directors.


     (c) BENEFITS. In addition to the Salary and Bonus, the Executive shall be
entitled to participate in health, insurance, pension, and other benefits
provided to other senior executives of the Company on terms no less favorable
than those available to such senior executives of the Company. The Executive
shall also be entitled to the same number of vacation days, holidays, sick days
and other benefits as are generally allowed to other senior executives of the
Company in accordance with the Company policy in effect from time to time.



     SECTION 4. EXCLUSIVITY. During the Employment Tem-4 the Executive shall
devote Executive's full time to the business of the Company, shall faithfully
serve the Company, shall in all respects conform to and comply with the lawful
and reasonable directions and instructions given to him by the Chairman in
accordance with the terms of this Agreement, shall use Executive's best efforts
to promote and serve the interests of the Company and shall not engage in any
other business activity, whether or not such activity shall be engaged in for
pecuniary profit, except that the Executive may: (i) participate in the
activities of professional trade organizations related to the business of the
Company; (ii) engage in personal investing activities; and (iii) participate on
one or more boards of directors of entities which are not directly competitive
with the Company or its affiliates; and (iv) participate in community,
charitable or similar activities and associations which are not competitive with
the Company for other than pecuniary profit; provided that activities set forth
in these clauses (i) through (iv), either singly or in the aggregate, do not
interfere in any material respect with the services to be provided by the
Executive hereunder.




     SECTION 5. REIMBURSEMENT FOR EXPENSES. The Executive is authorized to incur
reasonable expenses in the discharge of the services to be performed hereunder,
including expenses for travel, entertainment, lodging and similar items in
accordance with the Company's expense reimbursement policy, as the same may be
modified by the Company from time to time. The Company shall reimburse the
Executive for all such proper expenses upon presentation by the Executive of
itemized accounts of such expenditures in accordance with the financial policy
of the Company, as in effect from time to time.

     SECTION 6. TERMINATION AND DEFAULT.

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<PAGE>   5
           (a) DEATH. This Agreement shall automatically terminate upon the
death of the Executive and upon such event, the Executive's estate shall be
entitled to receive the amounts specified in Section 6(f) below.

           (b) DISABILITY. If the Executive is unable to perform the duties
required of him under this Agreement because of illness, incapacity, or physical
or mental disability, this Agreement shall remain in full force and effect and
the Company shall pay all compensation required to be paid to the Executive
hereunder, unless the Executive is unable to perform the duties required of him
under this Agreement for an aggregate of 180 days (whether or not consecutive)
during any 12month period during the term of this Agreement, in which event this
Agreement (other than Sections 6(f), 7, 8, 9, and 12 hereof), including, but not
limited to, the Company's obligations to pay any Salary or to provide any
privileges under this Agreement, shall terminate.


           (c) JUST CAUSE. The Company may terminate this Agreement (other than
Sections 6(f), 7, 8, 9 and 12 hereof) at any time. If the Executive's employment
is terminated pursuant to this Section 6(c), the Executive shall be entitled to
receive the amounts specified in Section 6(f) below. In the event of termination
pursuant to this Section 6(c) for Just Cause, the Company shall deliver to the
Executive written notice setting forth the basis for such termination, which
notice shall specifically set forth the nature of the Just Cause which is the
reason for such termination. Termination of the Executive's employment hereunder
shall be effective upon delivery of such notice of termination. For purposes of
this Agreement, "Just Cause" shall mean: (i) any @l or intentional act of the
Executive that has the effect of injuring the business prospects of the Company
or its affiliates in any material respect; (ii) any continued or repeated
absence from the Company, unless such absence is (A) approved or excused by the
Chairman or (B) is the result of the Executive's illness, disability or
incapacity (in which event the provisions of Section 6(b) hereof shall control),
(iii) use of illegal drugs by the Executive or repeated drunkenness; (iv)
conviction of the Executive for the commission of a felony involving moral
turpitude; or (v) the commission by the Executive of a material act of fraud or
embezzlement against the Company.

           (d) GOOD Reason. The Executive may terminate this Agreement (other
than Sections 6(b), 7, 8, 9 and 12) for "Good Reason" if Executive resigns from
Executive's employment hereunder following a Substantial Breach (as hereinafter
defined) and such Substantial Breach shall not have been corrected by the
Company within thirty (30) days of receipt by the Company of written notice from
the Executive of the occurrence of such Substantial Breach, which notice shall
specifically set forth the nature of the Substantial Breach which is the reason
for such resignation. The term "Substantial Breach" means: (i) the failure by
the Company to pay to the Executive the Salary and Bonus, if any, in accordance
with Sections 3(a) and 3(b) hereof, (H) the failure by the Company to allow the
Executive to participate in the Company's employee benefit plans generally
available from time to time to senior executives of the Company; or (iii) the


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failure of any successor to all or substantially all of the business and/or
assets of the Company to assume this Agreement; provided, however, that the term
"Substantial Breach" shall not include a termination of the Executives
employment hereunder pursuant to Sections 6(b) or (c) hereof The date of
termination of the Executive's employment under this Section 6(d) shall be the
effective date of any resignation specified in writing by the Executive, which
shall not be less than thirty (30) days after receipt by the Company of written
notice of such resignation, provided that such resignation shall not be
effective pursuant to this Section 6(d) and the Substantial Breach shall be
deemed to have been cured if such Substantial Breach is corrected by the Company
during such 30-day period.



     (e) RESIGNATION. The Executive shall have the right immediately to
terminate this Agreement (other than Sections 6(f), 7, 8, 9 and 12) by giving
notice of the Executive's resignation other than for Good Reason. Upon receipt
of such notice, this Agreement, other than Sections 6(f), 7, 8, 9 and 12, shall
terminate immediately.



     (f) PAYMENTS. In the event that the Executive's employment hereunder
terminates for any reason, the Company shall pay to the Executive all amounts
accrued but unpaid hereunder through the date of termination in respect of
Salary, accrued vacation, and unreimbursed expenses. In the event the
Executive's employment hereunder is terminated by the Company without Just Cause
or by the Executive with Good Reason, in addition to the amounts specified in
the foregoing sentence, (i) the Executive shall continue to receive the Salary
(less any applicable withholding or similar taxes) at the rate in effect
hereunder on the date of such termination periodically, in accordance with the
Company's prevailing payroll practices, for a period of twelve months following
the date of such termination (the "Severance Term") and (H) the Executive shall
continue to receive any health or other insurance benefits (including, but not
limited to, self-insured dental, eye care or other benefits) provided to him as
of the date of such termination in accordance with the Section 3(c) hereof
during the Severance Term; provided, however, that Executive shall not be
entitled to participate in any pension, profit sharing or 401-K plan benefits,
or to accrue any vacation time or benefits, during the Severance Tenn. In the
event the Executive accepts other employment or engages in his own business
prior to the last date of the Severance Term, the Executive shall forthwith
notify the Company and the Company shall be entitled to set off from amounts due
the Executive under this Section 6(f) the amounts paid to the Executive in
respect of such other employment or business activity. Amounts owed by the
Company in respect of the Salary or reimbursement for expenses under the
provisions of Section 5 hereof shall, except as otherwise set forth in this
Section 6(f), be paid promptly upon any termination. Upon any termination of
this Agreement, all of the rights, privileges and duties of the Executive
hereunder shall cease, except for Executive's rights under this Section, 6(f)
and Executive's obligations under Sections 7, 8, 9, and 12 hereunder.



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<PAGE>   7
           SECTION 7. SECRECY AND NON-COMPETITION.

           (a) NON COMPETING EMPLOYMENT. The Executive acknowledges that the
agreements and covenants contained in this Section 7 are essential to protect
the value of the Company's business and assets and by Executive's current
employment with the Company and its subsidiaries, the Executive has obtained and
will obtain such knowledge, contacts, know-how, training and experience and
there is a substantial probability that such knowledge, know-how, contacts,
training and experience could be used to the substantial advantage of a
competitor of the Company and to the Company's substantial detriment. Therefore,
the Executive agrees that for the period commencing on the date of this
Agreement and ending on the second anniversary (or, in the event of termination
by the Company without Just Cause, or by the Executive with Good Reason, ending
on the first anniversary) of the termination of the Executive's employment
hereunder, (such period is hereinafter referred to as the "Restricted Period")
with respect to any county or parish in the United States in which the Company
or any of its subsidiaries or affiliates is actively providing services or
otherwise doing business on the date of the termination of the Executive's
employment hereunder, the Executive shall not participate or engage, directly or
indirectly, for himself or on behalf of or in conjunction with any person,
partnership, corporation or other entity whether as an employee, agent, officer,
director, shareholder, partner, joint venturer, investor (other than owning or
holding not greater than a two percent (21/o) interest in a publicly held
entity), or otherwise, in any business activities if such activity consists of
any activity undertaken or expressly contemplated to be undertaken by the
Company or any of its subsidiaries or affiliates or by the Executive at any time
during the Employment Term.


           (b) NO INTERFERENCE. During the Restricted Period, the Executive
shall not, whether for Executive's own account or for the account of any other
individual, partnership, corporation or other business organization (other than
the Company), directly or indirectly solicit, endeavor to entice away from the
Company, its affiliates or subsidiaries, or otherwise directly interfere with
the relationship of the Company, its affiliates or subsidiaries with any person
who, to the knowledge of the Executive, is employed by or otherwise engaged to
perform services for the Company, its affiliates or subsidiaries (including, but
not limited to, any independent sales representatives or organizations) or who
is, or was within the then most recent twelve-month period, a customer or
client, of the Company, its predecessors or any of its subsidiaries or
affiliates. The placement of any general classified or "help wanted"
advertisements and/or general solicitations to the public at large shall not
constitute a violation of, this Section 7(b) unless the Executive's name is
contained in such advertisements or solicitations.


           (c) COORDINATION WITH OTHER AGREEMENT. In addition to the foregoing
provisions of this Section 7, Executive hereby ratifies and confirms all of the
terms, provisions, and obligations set forth in that certain Proprietary
Information and Inventions Agreement entered into by Executive and the Company
dated August 23, 1995, all of the terms and provisions of which are hereby
incorporated herein by this reference.



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<PAGE>   8
           SECTION 8. INJUNCTIVE Relief. Without intending to limit the remedies
available to the Company, the Executive acknowledges that A breach of any of the
covenants contained in Section 7 hereof may result in material irreparable
injury to the Company or its subsidiaries or affiliates for which there is no
adequate remedy at law, that it will not be possible to measure damages for such
injuries precisely and that, in the event of such a breach or threat thereof,
the Company shall be entitled to obtain a temporary restraining order and/or a
preliminary or permanent injunction, without the necessity of proving
irreparable harm or injury as a result of such breach or threatened breach of
Section 7 hereof, restraining the Executive from engaging activities prohibited
by Section 7 hereof or such other relief as may be required specifically to
enforce any of the covenants in Section 7 hereof

           SECTION 9. EXTENSION OF RESTRICTED PERIOD. In addition to the
remedies the Company may seek and obtain pursuant to Section 8 of this
Agreement, the Restricted Period shall be extended by any and all periods during
which the Executive shall be found by a court to have been in violation of the
covenants contained in Section 7 hereof

           SECTION 10. SUCCESSORS AND ASSIGNS: NO THIRD-PARTY BENEFICIARIES.
This Agreement shall inure to the benefit of, and be binding upon, the
successors and assigns of each of the parties, including, but not limited to,
the Executive's heirs and the personal representatives of the Executive's heirs
and the personal representatives of the Executive's estate; provided, however
that neither party shall assign or delegate any of the obligations created under
this Agreement without the prior written consent of the other party.
Notwithstanding the foregoing, the Company shall have the unrestricted right to
assign this Agreement and to delegate all or any part of its obligations
hereunder to any of its subsidiaries or affiliates, but in such event such
assignee shall expressly assume all obligations of the Company hereunder and the
Company shall remain fully liable for the performance of all of such obligations
in the manner prescribed in this Agreement. Nothing in this Agreement shall
confer upon any person or entity not a party to this Agreement, or the legal
representatives of such person or entity, any rights or remedies of any nature
or kind whatsoever under or by reason of this Agreement.



           SECTION 11. WAIVER AND AMENDMENTS. Any waiver, alteration, amendment
or modification of any of the terms of this Agreement shall be valid only if
made in writing and signed by the parties hereto; provided, however, that any
such waiver, alteration, amendment or modification is consented to on the
Company's behalf by the Board of Directors. No waiver by either of the parties
hereto of their rights hereunder shall be deemed to constitute a waiver with
respect to any subsequent occurrences or transactions hereunder unless such
waiver specifically states that it is to be construed as a continuing waiver.



           SECTION 12. SEVERABILITY AND GOVERNING LAW. The Executive
acknowledges and agrees that the covenants set forth in Section 7 hereof are
reasonable and valid in geographical and temporal scope and in all other
respects. If any of such covenants or such other provisions of this Agreement
are found to be invalid or unenforceable by a final determination of a court of

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<PAGE>   9
competent jurisdiction, (a) the remaining terms and provisions hereof shall be
unimpaired and (b) the invalid or unenforceable term or provision shall be
deemed replaced by a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the invalid or unenforceable term
or provision. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF CALIFORNIA APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED ENTIRELY SUCH STATE.



           SECTION 13. NOTICES.

(i) All communications under this Agreement sham be in writing and shall be
delivered by hand or mailed by overnight courier or by registered or certified
mail, postage prepaid:



(1) if to the Executive, at 26373 Parkside Drive, Hayward, CA 94542 or at such
other address as the Executive may have furnished the Company in writing, or

(2) if to the Company, at 2041 South Grand Avenue, Santa Ana, California 92705,
marked for the attention of Donald W. Judson, Chairman, or at such other address
as it may have furnished in writing to the Executive.

     (ii) Any notice so addressed shall be deemed to be given: if delivered by
hand, on the date of such delivery; if mailed by overnight courier, on the first
business day following the date of such mailing; and if mailed by registered or
certified mail, on the third business day after the date of such mailing.

     SECTION 14. SECTION HEADINGS. The headings Of the sections and subsections
of this Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof, affect the meaning or interpretation of this
Agreement or of any term or provision hereof

     SECTION 15. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding and agreement of the parties hereto regarding the employment of
the Executive. Except as expressly provided herein, this Agreement supersedes
all prior negotiations, discussions, correspondence, communications,
understandings and agreements between the parties relating to the subject matter
of this Agreement.



     SECTION 16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.


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<PAGE>   10
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

                               PACIFIC COMMUNICATIONS, INC., a California
                               Corporation
                        
                        
                               By:
                               /s/ Donald W. Judson
                               ---------------------------------
                               Name: Donald W. Judson
                               Title: Chairman
                        
                               /s/ David L. Schlotterbeck
                               ---------------------------------
                               Executive: David L. Schlotterbeck
                   


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<PAGE>   11
                        AMENDMENT TO EMPLOYMENT AGREEMENT



     This Amendment to Employment Agreement (the "Amendment") is made and
entered into as of the 5th day of January, 1996 by and among PACIFIC
COMMUNICATIONS, INC., a California corporation (PCI), ACCUCORE, INC., a Delaware
corporation ("ACCUCORE"), and David L. Schlotterbeck (the "Executive").

                                   WITNESSETH

     WHEREAS, on or about August 29, 1995, Employee entered into an employment
agreement with Executive(the "Employment Agreement") pursuant to which the
services of Executive have been retained by PCI;

     WHEREAS, PCI has been merged with and into ACCUCORE as of December 28,
1995, and ACCUCORE has assumed all of the liabilities and obligations of PCI as
of the date of such merger;

     WHEREAS, in the event of such merger, ACCUCORE desires to retain the
services of Executive, and Executive desires to be employed by ACCUCORE, on
substantially the same terms and conditions as those set forth in the Employment
Agreement.

     NOW, THEREFORE, on the basis of the foregoing premises and for good and
valuable consideration, the receipt of which is hereby acknowledged, including
the mutual covenants and agreements set forth herein, and to be effective
December 28, 1995, when PCI merged with and into ACCUCORE (the "Effective
Date"), the parties hereby agree as follows:

1. AMENDMENT OF EMPLOVMENT AGREEMENT. On the Effective Date, the Employment
Agreement is hereby amended to substitute ACCUCORE in the place and stead of
PCI. Executive hereby accepts and agrees to such substitution.


2. ASSUMPTIONOF0BLIENTIONS. On the Effective Date, ACCUCORE will assume all of
the liabilities and obligations of PCI pursuant to the Employment Agreement.

2. NO OTHER CHANGES. Except as expressly set forth herein, the Employment
Agreement will remain in full force and effect as originally executed.


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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the first
day and year first above written

                          /s/ David L. Schlotterbeck
                          --------------------------
                          "Executive"


                          PACIFIC COMMUNICATIONS, INC.

                          By:       /s/ Donald W. Judson
                                    --------------------
                                    Its: Chairman


                          ACCUCORE, INC.

                          By:       /s/ Donald W. Judson
                                    --------------------
                                    Its: Chairman



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