EMPLOYMENT AGREEMENT




                  EMPLOYMENT  AGREEMENT,  made  effective  as of the  1st day of
July, 1998 (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  Charles  Girsky,  residing  at 3455  Twin Lake  Ridge,  Westlake
Village, California 91361 ("Girsky").

                  WHEREAS, Girsky is Executive Vice President of Jaco;
                  WHEREAS, Girsky has been employed from and after July 1, 1998,
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 Executive Vice President of
Jaco,  and Girsky  hereby  agrees to serve Jaco in such  capacity and to perform
such  duties  consistent  therewith  as Jaco's  Board of  Directors  and/or  the
President  from time to time  shall  determine  for a period  commencing  on the
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

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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 an  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 $225,000 for each of the 12 month periods
(a "Contract  Year") ending June 30, 1999, 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.
                  2.2 Girsky shall  receive a cash bonus (the "Cash  Bonus") for
each  Contract  Year equal to (i) two  percent  (2%) 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


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$2,500,000 or (ii) three percent (3%) 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 $360,000.  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  $360,000,  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 Upon Girsky's death, his legal  representative(s) shall be
paid the sum of $1,000,000  (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 2.4 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.
                  2.4 Jaco shall use its best  efforts to purchase  insurance on
the  life  of  Girsky,  as  well  as  annuities  or  other  endowment   policies
(collectively,  "Policies"), in sufficient amounts fully to fund its obligations
to Girsky under Section 2.3 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.
                  2.5 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


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whatsoever  in the  Policies  or the  proceeds  thereof  (except as  provided in
Section  2.6  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.
                  2.6 If, at any time,  Girsky  ceases to be an employee of Jaco
other than on account of death,  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 2.3
and 2.4 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/or the President
and ordinarily performed by a person employed


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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 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  and/or the
President of Jaco or any of its subsidiaries.

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.


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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 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.


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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 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


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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.

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.


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                  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;
                           (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.


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                  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.

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 fifty percent
(250%) 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


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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).

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.



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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.

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


                          By: JOEL H., GIRSKY
                              President



                              CHARLES GIRSKY


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