EMPLOYMENT AGREEMENT



                  EMPLOYMENT  AGREEMENT,  made  effective  as of the  1st day of
July, 1997 (the "Effective Date"), by and between Jaco Electronics, Inc., a New
York corporation  having offices at 145 Oser Avenue,  Hauppauge,  New York 11788
("Jaco"),  and Joel H. Girsky,  residing at 29 Winter Lane, Dix Hills,  New York
11746 ("Girsky").

                  WHEREAS, Girsky is Chairman of the Board of Directors 
("Chairman"), President,and Treasurer of Jaco;
                  WHEREAS,  Girsky's last written employment agreement with Jaco
expired on June 30, 1997; and
                  WHEREAS, Girsky has been employed from and after July 1, 1997,
pursuant to an oral  agreement of employment  consistent  with the terms hereof;
and
                  WHEREAS,  Jaco  desires  to have  the  continued  services  of
Girsky,  and Girsky desires to continue to be employed by Jaco, on the terms and
conditions hereinafter set forth.
                  NOW,  THEREFORE,  in consideration of the mutual covenants and
agreements herein contained, the parties agree as follows:

1.                Term of Employment; Duties.
                  1.1 Jaco hereby  employs  Girsky as Chairman and  President of
Jaco,  and Girsky hereby agrees to serve Jaco in such  capacities and to perform
such duties consistent  therewith as Jaco's Board of Directors from time to time
shall determine for a period commencing on the


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Effective Date and ending on the fourth (4th)  anniversary of the Effective Date
(the "Initial Term"),  provided,  however, the term of this Employment Agreement
shall be  automatically  extended after each  anniversary  date of the Effective
Date for an additional one year period following the Initial Term, unless either
Jaco or Girsky  shall  provide a notice of  non-renewal  to the other party (the
"Notice  of  Non-Renewal"),  which  notice  shall  be in  writing  and  shall be
delivered  not less than 90 days prior to the third  anniversary  date after the
Effective  Date  (the  "Employment  Period").  In the  event  that a  Notice  of
Non-Renewal  is delivered  by either  party,  this  Employment  Agreement  shall
continue for a period of three (3) years  following the  anniversary  date which
follows  immediately  after  the  date  that a valid  and  effective  Notice  of
Non-Renewal  is delivered.  By way of example,  if the Notice of  Non-Renewal is
delivered after the second  anniversary  date and not less than 90 days prior to
the third  anniversary  date of the Effective Date,  this  Employment  Agreement
shall continue until the sixth anniversary date of the Effective Date.

2.                Compensation.
                  2.1 For all services  rendered  pursuant to the terms  hereof,
Girsky shall  receive a base salary of $325,000 for each of the 12 month periods
(a "Contract  Year") ending June 30, 1998, and each June 30,  thereafter  ("Base
Salary"),  which  Base  Salary  shall  be  paid  to  Girsky  in  equal  periodic
installments  not less  frequently  than  monthly.  In addition  and not in lieu
thereof,  Girsky  shall be  entitled  to receive  such  fringe  benefits  and to
participate  in such benefit plans and programs as are generally  made available
by Jaco to other  senior  executive  employees,  including,  but not limited to,
health insurance.


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                  2.2 Girsky shall  receive a cash bonus (the "Cash  Bonus") for
each  Contract  Year equal to (i) four  percent (4%) of Jaco's  annual  earnings
before income taxes for the  corresponding  fiscal year if such earnings  before
income taxes are in excess of $1,000,000,  and not more than  $2,500,000 or (ii)
six percent (6%) of Jaco's  earnings  before income taxes for the  corresponding
fiscal year if such earnings  before income taxes are in excess of $2,500,000 up
to a maximum  annual Cash Bonus of $720,000.  If Jaco's  earnings  before income
taxes are in excess of $12,000,000  for any such fiscal year, in addition to the
Cash Bonus of $720,000, Girsky shall receive such number of common stock options
of Jaco as shall be negotiated between Girsky and Jaco at such time (the "Option
Bonus" and,  together with the Cash Bonus,  the  "Performance  Bonus").  As used
herein,  the term  "earnings  before income taxes" shall mean the income of Jaco
before extraordinary items and before payment of income taxes as shown on Jaco's
consolidated financial statements prepared in accordance with generally accepted
accounting  principles.  The  Performance  Bonus shall be payable  every year on
November 1 for the preceding fiscal year.
                  2.3 In addition to the Base Salary and  Performance  Bonus and
not in lieu thereof, in accordance with Section 2.4 hereof, Girsky shall receive
as additional  compensation the product of $50,000,  multiplied by the number of
years which  shall have passed  since July 1, 1984 and until the end of the last
day on which Girsky shall be employed hereunder ("Deferred Compensation").  Jaco
may,  but shall not be  obligated  to,  set aside  funds  with  which to pay the
Deferred  Compensation,  it being  understood and agreed that such funds are and
shall be the sole and exclusive property of Jaco, free from any lien or claim of
Girsky.  Should Girsky so request,  Jaco,  in its sole and absolute  discretion,
may, but shall not be obligated to, invest such funds in one or more  nationally
recognized, institutionally managed mutual funds which invest in publicly traded
equity


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or debt securities. Should Girsky make any such request and should Jaco make any
such investment in accordance with such request, the Deferred Compensation shall
be  increased  by an amount  equal to any  after  tax gain or after  tax  income
realized therefrom or reduced by an amount equal to any loss realized therefrom,
as the case may be. For purposes of calculating  after tax gain,  income or loss
for  purposes of this  Section  2.3, it shall be assumed that Jaco is taxable on
its income at the highest applicable marginal rates.
                  2.4 The Deferred  Compensation  shall become payable to Girsky
in its entirety not later than January 15th of the year next following the later
to occur of the following events:
                           (a)      Girsky's attainment of age 60; or
                           (b)      Girsky's cessation of employment hereunder 
for  any reason; provided,  however,  if  Girsky  continues  to be  employed  by
Jaco  after  the expiration of this  Employment  Agreement in a substantially  
similar  executive position to that provided for  hereunder,  the Deferred  
Compensation  shall not become payable to him until  cessation of such  
employment,  whether or not such employment is pursuant to a written agreement.
                  2.5 (a) Upon Girsky's death, his legal representative(s) shall
be paid the sum of $1,500,000 (the "Death  Benefit") within fifteen (15) days of
Jaco's  receipt of the  proceeds of the  insurance  on Girsky's  life  purchased
pursuant to the provisions of Section 2.6 below. If, for any reason, at the time
of Girsky's death,  Jaco does not have in force an insurance  policy on Girsky's
life,  then,  notwithstanding  anything  in  this  Employment  Agreement  to the
contrary, the Death Benefit shall be due and payable within fifteen (15) days of
Girsky's death.
                           (b)      Upon Girsky's retirement on account of 
permanent disability (as that term is defined in Section 4.2 below) during the 
term hereof, he shall be paid the sum of $500,000


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(the "Disability Benefit") in twelve (12) equal monthly installments, commencing
with the month in which  Jaco  receives  the  proceeds  of the  annuity or other
endowment  policy  purchased for Girsky's  benefit pursuant to the provisions of
Section 2.6 below.  If, for any reason,  at the time of Girsky's  retirement  on
account of permanent disability, Jaco does not have in force an annuity or other
endowment policy for the benefit of Girsky,  then,  notwithstanding  anything in
this Employment Agreement to the contrary,  Jaco shall commence monthly payments
of the  Disability  Benefit in the month next  succeeding  the month of Girsky's
retirement on account of permanent disability.
                  2.6 Jaco shall use its best  efforts to purchase  insurance on
the life of Girsky, and insurance against Girsky becoming  disabled,  as well as
annuities or other endowment policies (collectively,  "Policies"), in sufficient
amounts fully to fund its  obligations  to Girsky under  Section 2.5 above.  All
such  policies  shall be and shall  remain the  property of Jaco.  Girsky  shall
cooperate fully with Jaco to enable Jaco to obtain such policies.
                  2.7 The  obligations  of Jaco to Girsky  hereunder are general
unsecured  obligations  of Jaco to  Girsky,  and Girsky  shall have no  security
interest  or other  interest  of any nature  whatsoever  in the  Policies or the
proceeds  thereof  (except as provided  in Section  2.8 below),  or in any other
assets of Jaco. Jaco, in its absolute discretion,  may establish any reserves or
special accounts or segregate assets to fund such obligations.  Girsky shall not
sell, transfer, assign, pledge, encumber,  hypothecate or otherwise alienate any
right  or  entitlement  of his  hereunder.  No such  purported  sale,  transfer,
assignment,  pledge,  encumbrance,  hypothecation or other alienation shall have
any force or  effect or in any way be  binding  upon or be  enforceable  against
Jaco. Except as otherwise provided by law, no such right or entitlement shall be
subject to attachment or garnishment.


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                  2.8 If, at any time,  Girsky  ceases to be an employee of Jaco
other than on account of death or retirement on account of permanent disability,
Jaco,  at Girsky's  option,  shall  transfer and assign to Girsky all its right,
title and  interest in the  Policies  and Jaco shall  cause the  premiums on the
Policies to be fully paid up to the date of Girsky's  termination.  Girsky shall
refund to Jaco the pro rata portion (determined by the straight-line  method) of
premiums  on the  Policies,  if any,  paid by Jaco  for any  period  beyond  the
termination date. Upon such termination of Girsky's employment and upon complete
assignment  of all of the  Policies  to  Girsky,  Jaco  shall  have  no  further
liability  to Girsky for payment of premiums  under the Policies or otherwise in
respect of its obligations under Sections 2.5 and 2.6 hereof.

3. Services to be Provided.
                  3.1 Girsky shall devote his best efforts and substantially all
of his working time to the business of Jaco.
                  3.2  Girsky  shall  perform  all  duties,   obligations,   and
responsibilities  assigned  to him by the  Board  of  Directors  and  ordinarily
performed by a person employed as a senior executive  officer,  and shall devote
his full attention to the performance of the duties assigned to him.
                  3.3 If duly elected,  Girsky shall also serve as a director of
Jaco and as an officer and/or director of any of its  subsidiaries,  whether now
existing or hereafter established or acquired,  and he shall perform such duties
as are assigned to him,  from time to time, by the Board of Directors of Jaco or
any of its subsidiaries.




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4.                Termination of Employment.
                  4.1 During the Employment Period,  Girsky's  employment may be
terminated  by the Board of  Directors of Jaco on the  occurrence  of any one or
more of the following events:
                           (a)      The death of Girsky;
                           (b)      Subject to the provisions of Section 4.2 
below, the disability of Girsky; or
                           (c)      For "Cause", which shall mean (i) the 
willful failure by Girsky substantially  to perform his duties  hereunder  for
reasons other than death or disability;  (ii) the  willful  engaging  by  Girsky
in  misconduct  materially injurious  to Jaco;  or (iii) the  commission  by 
Girsky of an act  constituting common law fraud or a felony.
                  4.2 If Girsky  becomes  mentally or physically  disabled for a
period  of six (6)  consecutive  months  so that he is not able to  perform  his
duties substantially as contemplated herein  ("Disability"),  Jaco's obligations
to pay the Base Salary and the Performance  Bonus shall cease from and after the
last day of such six (6) month period and shall not be resumed  unless and until
Girsky  shall have  returned  to his duties on a full time basis for a period of
two (2) consecutive  months.  During such two (2) month period,  Girsky shall be
paid at the rates of Base  Salary and  Performance  Bonus  which would then have
been prevailing hereunder had he not become so disabled.  If Girsky's Disability
becomes permanent,  Jaco, at its option, may terminate Girsky's  employment with
Jaco and its  obligation  hereunder  to pay the Base Salary and the  Performance
Bonus.  Girsky's  Disability shall be deemed to have become permanent when, as a
result  of the  injury or  sickness,  Girsky  becomes  wholly  and  continuously
disabled and is thus  prevented  from  performing  the material and  substantial
duties of his  employment  as set forth in Section 1.1 above and while under the
care of


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<PAGE>



a physician.

5.  Reimbursement  of Expenses.  Jaco shall reimburse  Girsky for all reasonable
expenses  incurred in  connection  with the  promotion  of the business of Jaco,
including  expenses for travel,  entertainment  and similar expenses incurred by
Girsky on Jaco's  behalf.  No such  reimbursement  shall be made except upon the
presentation by Girsky of an itemized account of such expenses or other evidence
thereof for which  reimbursement  then is being sought,  all in form  reasonably
satisfactory to Jaco.

6. Indemnity.  Jaco, to the maximum extent it may provide  indemnification to an
officer or director under  applicable law, shall  indemnify  Girsky and hold him
harmless  from any and all  liability  arising  out of any act or failure to act
undertaken by him in good faith while  performing  services for Jaco,  and shall
use its best efforts to obtain  coverage for him under any insurance  policy now
in force or hereafter  obtained during the Employment  Period covering  officers
and  directors of Jaco  against  claims made against them or any of them for any
act or failure to act in such capacities. Jaco shall pay all expenses, including
reasonable  attorneys'  fees,  actually  or  necessarily  incurred  by Girsky in
connection  with the defense of any action,  suit, or proceeding  arising out of
any such claim and in connection with any appeal arising therefrom.

7. Disclosure of Information.  All memoranda, notes, records, or other documents
made or  compiled  by Girsky or made  available  to him during the course of his
employment with


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Jaco  concerning  the  business  of Jaco shall be Jaco's  property  and shall be
delivered to Jaco by Girsky on the  termination of Girsky's  employment.  Unless
authorized  by Jaco,  Girsky  shall not use for  himself or others or divulge to
others, any proprietary or confidential information of Jaco obtained by him as a
result of his employment.  For purposes of this Section 7, the term "proprietary
or confidential  information" shall mean all information which (i) is known only
to Girsky or to Girsky and employees, former employees,  consultants of Jaco, or
others in a  confidential  relationship  with Jaco,  (ii)  relates  to  specific
matters such as trade secrets,  customers,  potential  customers,  vendor lists,
pricing and credit techniques,  research and development  activities,  books and
records,  and commission  schedules,  as they may exist from time to time, which
Girsky may have  acquired or obtained by virtue of work  heretofore or hereafter
performed  for or on behalf of Jaco or which he may acquire or may have acquired
knowledge  of during  the  performance  of such work,  and (iii) is not  readily
available to others.  In the event of a breach or a threatened  breach by Girsky
of the  provisions  of this  Section 7, Jaco shall be entitled to an  injunction
restraining  Girsky from  disclosing,  in whole or in part,  the  aforementioned
proprietary or confidential  information of Jaco, or from rendering any services
to any person,  firm,  corporation,  association,  or other entity to whom or to
which such  proprietary or  confidential  information,  in whole or in part, has
been disclosed or is threatened to be disclosed.  Nothing contained herein shall
be construed as prohibiting  Jaco from pursuing any other remedies  available to
Jaco for such breach or  threatened  breach,  including  the recovery of damages
from Girsky.





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8.                Restrictive Covenants.
                  8.1  Girsky  hereby  acknowledges  and  recognizes  the highly
competitive nature of Jaco's business and, accordingly,  in consideration of the
premises  contained  herein,  agrees  that  during  the  Employment  Period  and
thereafter  until the Designated Date (as hereinafter  defined) he will not: (i)
directly  or  indirectly  engage in any  Competitive  Activity  (as  hereinafter
defined),  whether such engagement shall be as an officer,  director,  employee,
consultant,  agent, lender,  stockholder,  or other participant;  or (ii) assist
others in engaging in any Competitive Activity.  The term "Competitive Activity"
shall  mean and  shall  include  soliciting,  raiding,  enticing,  or  inducing,
individually  or in  concert  with  others,  (i) any  person  or  entity to be a
customer  for the same or  similar  services  for  which  that  person or entity
engaged  Jaco,  if such person or entity (a) was a customer of Jaco's during the
Employment Period or at any time thereafter prior to the Designated Date, or (b)
was solicited by Jaco to be a customer  during the one-year  period prior to the
termination of this  Employment  Agreement;  (ii) any  manufacturer  or supplier
whose products are distributed by Jaco at the time this Employment  Agreement is
terminated to act as a manufacturer  or supplier for any other party of the same
or similar  goods that it  supplies  to Jaco;  or (iii) any  employee of Jaco to
leave Jaco or to do business with any enterprise or business which competes with
Jaco.
                  8.2      As used in this Section 8, the "Designated Date" 
shall mean any of the following dates:
                           (a)      in the event Girsky willfully terminates his
employment with Jaco in violation of this Employment Agreement prior to the
expiration of the Employment Period,  the term "Designated Date" shall mean the 
first anniversary of the date of such termination;


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                           (b)      in the event Jaco terminates the employment 
of Girsky under this Employment  Agreement for Cause, the term "Designated Date"
shall mean the first anniversary of the date of such termination; or
                           (c)      in the event Jaco terminates the employment
of Girsky without cause, the term "Designated Date" shall mean the date of such 
termination.
                  8.3 It is the  desire  and  intent  of the  parties  that  the
provisions of this Section 8 shall be enforced to the fullest extent permissible
under  the  laws and  public  policies  applied  in each  jurisdiction  in which
enforcement is sought.  Accordingly, if any provision of this Section 8 shall be
adjudicated  to be  invalid  or  unenforceable  in any such  jurisdiction,  such
provision  of this  Section 8 shall be deemed  amended to delete  therefrom  the
portion thus adjudicated to be invalid or unenforceable,  such deletion to apply
only with respect to the  operation  of such  provision of this Section 8 in the
particular  jurisdiction in which such adjudication is made. In addition, if the
scope of any  restriction  contained in this Section 8 is  adjudicated to be too
broad to permit enforcement thereof to its fullest extent, then such restriction
shall be enforced to the maximum  extent  permitted  by law,  and Girsky  hereby
consents and agrees that such scope may be judicially  modified  accordingly  in
any proceeding brought to enforce such restriction.
                  8.4 In the event of a breach or threatened breach by Girsky of
the  provisions  of this  Section 8, Jaco  shall be  entitled  to an  injunction
restraining him from such breach. Nothing contained herein shall be construed as
prohibiting  Jaco from  pursuing  any other  remedies  available  to it for such
breach or threatened breach or any other breach of this Employment Agreement.




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9.                Consolidation; Merger; Change of Control.
                  9.1 In the event of any  consolidation  or merger of Jaco into
or with another  corporation  during the Employment  Period, and Jaco is not the
surviving  entity, or the sale of all or substantially all of the assets of Jaco
to another  corporation during the Employment Period, or in the event that fifty
(50%)  percent or more of the voting  common stock of Jaco shall be owned by one
or more  individuals  or  entities,  who are  acting in concert or as part of an
affiliated  group  (other than a group one of the members of which is Girsky) at
any time during the Employment Period,  (the occurrence of any of the foregoing,
a "Change of Control"),  then (i) Jaco shall pay or cause to be paid to Girsky a
certified or cashier's  check in an amount equal to two hundred and  ninety-nine
percent  (299%) of the average of  Girsky's  Base Salary plus Cash Bonus for the
previous five (5) years;  and (ii) this Employment  Agreement may be assigned by
Jaco or any such  successor  or surviving  corporation  on sixty (60) days prior
written notice to Girsky;  provided,  however,  such assignment  shall not cause
Girsky's  principal  place of  employment  to be moved to any space located more
than forty-five (45) miles from Girsky's  principal place of employment prior to
a Change of Control without his prior written consent.
                           9.2     Notwithstanding the provisions of Section 9.1
above, any such payments  shall be made only in an amount  which,  when taken
together with the present value of all other payments to Girsky that are
contingent on a Change in Control  of  Jaco,  computed  in  accordance with  the
provisions  of  Section 280G(d)(4) of the Internal Revenue Code of 1986 
(the "Code"),  does not equal or exceed three times Girsky's "Base Amount", 
 as computed in accordance  with Code Section 280G(b)(3).



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10. Notices.  Any notices required or permitted to be given under the provisions
of this Employment Agreement shall be in writing and delivered personally,  sent
by  recognized  overnight  courier or mailed by  certified or  registered  mail,
return receipt  requested,  postage  prepaid to the persons and at the addresses
first set forth  above,  or to such other  person at such  other  address as any
party may  request by notice in writing  to the other  party to this  Employment
Agreement. Notices which are hand delivered or delivered by recognized overnight
courier  shall be  effective  on  delivery.  Notices  which are mailed  shall be
effective on the third day after mailing.

11.  Construction,  This  Employment  Agreement shall be construed in accordance
with,  and be  governed  by,  the laws of the  State  of New York for  contracts
entered into and to be performed in New York.

12.  Successors and Assigns.  This Employment  Agreement shall be binding on the
successors and assigns of Jaco and shall inure to the benefit and be enforceable
by and against its successors and assigns. This Employment Agreement is personal
in nature and may not be assigned  or  transferred  by Girsky  without the prior
written consent of Jaco.

13.  Entire   Agreement.   This   Employment   Agreement   contains  the  entire
understanding  and agreement  between the parties relating to the subject matter
hereof,  and neither this Employment  Agreement nor any provision  hereof may be
waived, modified,  amended,  changed,  discharged,  or terminated,  except by an
agreement in writing signed by the party against whom enforcement of any waiver,
modification, change, amendment, discharge, or termination is sought.


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14. Counterparts.  This Employment  Agreement may be executed  simultaneously in
counterparts,  each of  which  shall be  deemed  an  original,  and all of which
counterparts shall together constitute a single agreement.

15.  Illegality.  In case any one or more of the  provisions of this  Employment
Agreement  shall be invalid,  illegal,  or  unenforceable  in any  respect,  the
validity, the legality, and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.

16.  Captions.  The captions of the sections hereof are for convenience only and
shall not control or affect the meaning or  construction  of any of the terms or
provisions of this Employment Agreement.


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<PAGE>


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

                        JACO ELECTRONICS, INC.

                        By: HERBERT ENTENBERG
                            Vice President




                           JOEL H. GIRSKY


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