Exhibit 10
                              EMPLOYMENT AGREEMENT

     THIS  EMPLOYMENT  AGREEMENT  dated as of the 6th day of January 2000 by and
between VASOMEDICAL,  INC., a Delaware  corporation  (hereinafter the "Company")
and D. Michael  Deignan,  an individual  residing at 6 Wax Myrtle Court,  Hilton
Head Island, South Carolina 29926 (hereinafter called "Deignan").

                              W I T N E S S E T H:

     WHEREAS,  the Company  desires to enter into an Employment  Agreement  with
Deignan; and

     WHEREAS,  Deignan  desires to enter into an Employment  Agreement  with the
Company;

     NOW, THEREFORE, it is agreed as follows:

     1. Prior Agreements  Superseded.  This Agreement supersedes any employment,
consulting or other  agreements,  oral or written,  entered into between Deignan
and the Company prior to the date of this Agreement.

     2.  Employment.  The Company  hereby  agrees to employ  Deignan and Deignan
hereby agrees to serve as President and Chief  Executive  Officer of the Company
with responsibility for the overall supervision, direction and administration of
all  activities  and  affairs  of the  Company  and  performance  of such  other
executive  duties  on  behalf  of the  Company  as the  Board of  Directors  may
determine.  Deignan's duties shall also include general  supervision and control
over all subsidiaries of the Company,  if any.  Deignan's  employment  hereunder
shall be on a  full-time  basis  and  Deignan  shall  not  engage  in any  other
business,  including directorships,  except with the prior approval of the Board
of Directors of the Company.  Deignan shall serve in similar  capacities of such
of the subsidiary corporations of the Company as may be selected by the Board of
Directors without additional compensation.  Notwithstanding the foregoing, it is
understood that the duties of Deignan during the performance of employment shall
not be inconsistent with his position and title as President and Chief Executive
Officer of the Company.

     3.  Term.  Subject  to  earlier  termination  on the terms  and  conditions
hereinafter  provided,  the  term  of this  Employment  Agreement  shall  end on
December 31, 2000.  The Company  shall have the right to extend the term of this
Employment  Agreement for additional one-year periods upon written  notification
to  Deignan  on or before  November  30,  2000 and on or before  November  30 of
subsequent years for additional one-year extensions of employment.

     4. Compensation. For all services rendered by Deignan under this Agreement,
compensation shall be paid to Deignan as follows:

          (a)  Deignan  shall be paid a per annum  base  salary  of One  Hundred
     Eighty  Thousand  ($180,000)  Dollars for the contract year January 6, 2000
     through  December  31,  2000,  such amount to be payable in equal  periodic
     installments  in accordance with the Company's  regular payroll  procedures
     for its executive employees.  For the year January 1, 2001 through December
     31, 2001, and subsequent  years,  if employment is extended,  Deignan's per
     annum  base  salary  may  be  increased  based  upon  merit  and  increased
     responsibilities   as  determined  by  the  Company's  Board  of  Directors
     consistent with its salary administration guidelines.
<PAGE>
          (b) During the  period of  employment  Deignan  shall be  eligible  to
     participate  in the Company's  stock option and stock purchase plans to the
     extent  determined  in the  discretion  of the  Board of  Directors  of the
     Company or committee thereof.

          (c) The Company shall forthwith issue to Deignan  non-qualified  stock
     options to purchase an aggregate of six hundred  thousand  (600,000) shares
     of the Company's  Common Stock at the closing price per share on the Nasdaq
     exchange on January 6, 2000 (the  "Options").  The Options  shall be vested
     and exercisable in accordance with the following  schedule:  150,000 shares
     on January 1, 2001,  100,000  shares on January 1, 2002,  100,000 shares on
     January 1, 2003,  100,000  shares on January 1, 2004 and 150,000 on January
     1, 2005;  provided that the Options shall vest only in the event Deignan is
     a full-time employee of the Company at the time of vesting. The time within
     which the Options may be exercised  shall be ten (10) years from January 6,
     2000.

          (d) Deignan  shall be entitled to  participate  in any  short-term  or
     long-term incentive plan which the Company has in existence or which may be
     adopted.

          (e) During the period of  employment,  Deignan shall be furnished with
     office space and secretarial  service and facilities  commensurate with his
     position and adequate for the performance of his duties.

          (f)  Deignan  shall be entitled  to fully  participate  in all benefit
     programs  available to executive  employees of the Company  throughout  the
     term of this Agreement.

          (g) Deignan  shall be entitled to four (4) weeks of vacation  and sick
     leaves consistent with current practice of the Company.

        5. Expenses.  Deignan shall be reimbursed for all out-of-pocket expenses
reasonably  incurred by him in the performance of his duties hereunder.  Expense
reports, with receipts and justifications,  must be submitted to the Chairman of
the Board for approval.

Moreover,  Deignan is entitled to a relocation allowance up to a total of Thirty
Thousand ($30,000) Dollars payable upon submission of supporting documentation.

        6.  Severance  Benefits.  Deignan  shall be  entitled  to the  severance
benefits  provided  for in this section in the event of the  termination  of his
employment  by  the  Company  without  cause  or in  the  event  of a  voluntary
termination  of  employment by Deignan for good reason.  In such event,  Deignan
shall  have no duty to  mitigate  damages  hereunder.  Deignan  and the  Company
acknowledge that the foregoing provisions of this paragraph 6 are reasonable and
are  based  upon the  facts  and  circumstances  of the  parties  at the time of
entering into this Agreement,  and with this  Agreement,  and with due regard to
future expectations.

     (a) The term "cause" shall mean:

     (i) Deignan's  willful and continued  failure to substantially  perform his
duties  under this  Agreement  (other than any such failure  resulting  from his
incapacity  due to  physical or mental  illness)  after  demand for  substantial
performance  is delivered to Deignan by the Chairman of the Board of the Company
which specifically identifies the manner in which the Board believes Deignan has
not substantially performed his duties.
<PAGE>
     (ii) Deignan's  failure to refuse to follow  directions  from the Company's
Board of Directors  provided that (a) Deignan is provided written notice of such
directions  and a  reasonable  period  in  which  to  comply  and (b)  Deignan's
compliance with any such direction would not be illegal or unlawful.

     (iii) Any act or fraud,  embezzlement or theft committed by Deignan whether
or not in connection with his duties or in the course of his employment.

     (iv) Any willful disclosure by Deignan of confidential information or trade
secrets of the Company or its affiliates.

     For purposes of this paragraph,  no act or failure to act on Deignan's part
shall be considered "willful" unless done, or omitted to be done, by Deignan not
in good faith and without  reasonable  belief that his action or omission was in
the best interest of the Company.  Notwithstanding the foregoing,  Deignan shall
not be deemed to have been  terminated  for cause  unless and until  there shall
have been delivered to him a copy of a notice of  termination  from the Chairman
of  the  Board  of  the  Company  after  reasonable  notice  to  Deignan  and an
opportunity  for  Deignan  with his  counsel  to be heard  before  the  Board of
Directors of the Company finding that in the good faith opinion of such Board of
Directors  Deignan was guilty of the conduct set forth in clauses  (i),  (ii) or
(iii) of this paragraph and specifying the particulars thereof in detail.

     (b) For these purposes,  Deignan shall have "good reason" to terminate this
Agreement if:


     (i) the Company  removes  Deignan from the position of President  and Chief
Executive Officer at any time during the term of this Agreement;

     (ii) Deignan's  place of employment is moved beyond a hundred-mile  radius,
as the crow  flies,  from 180 Linden  Avenue,  Westbury,  New York 11590 (or the
Company's  then  current  business  address)  as a  direct  result  of an  event
described in Section 14(a) or (b) hereof.


     (c)  The  severance  benefits  under  this  section  shall  consist  of the
continued payment to Deignan, for the balance of the term of this Agreement,  of
the annual salary provided in Section 4(a) hereof plus the immediate  vesting of
the options that would normally vest in that year.

        7.  Death.  In the  event of  Deignan's  death  during  the term of this
Agreement,  Deignan's legal  representative shall be entitled to receive his per
annum base salary as provided in  paragraph  4(a) of this  Agreement to the last
day of the calendar  quarter  following the calendar  quarter in which Deignan's
death shall have occurred and  thereafter to receive  one-half (1/2) of the base
salary  provided  in  paragraph  4(a) of this  Agreement  for the balance of the
period covered by this Employment Agreement.

     8. Non-Competition.

     (a) Deignan agrees that,  during the term of this  Agreement,  he will not,
without the prior  written  approval of the Board of  Directors  of the Company,
directly or indirectly,  through any other  individual or entity,  (a) become an
officer or employee of, or render any services [including  consulting  services]
to, any  competitor  of the  Company,  (b) solicit,  raid,  entice or induce any
customer of the Company to cease  purchasing  goods or services from the Company
or to become a customer of any  competitor of the Company,  and Deignan will not
approach any  customer for any such purpose or authorize  the taking of any such
<PAGE>
actions by any other  individual  or entity,  or (c)  solicit,  raid,  entice or
induce any  employee of the  Company,  and Deignan  will not  approach  any such
employee for any such purpose or authorize  the taking of any such action by any
other individual or entity. However, nothing contained in this paragraph 8 shall
be construed as  preventing  Deignan from  investing  his assets in such form or
manner as will not require  him to become an officer or  employee  of, or render
any services (including consulting services) to, any competitor of the Company.

     (b) During the term hereof and at all times  thereafter,  Deignan shall not
disclose to any  person,  firm or  corporation  other than the Company any trade
secrets, trade information,  techniques or other confidential information of the
business of the Company, its methods of doing business or information concerning
its customers learned or acquired by Deignan during Deignan's  relationship with
the Company and shall not engage in any unfair trade  practices  with respect to
the Company.

     9. Enforcement.

     (a) The  necessity  for  protection  of the  Company  and its  subsidiaries
against  Deignan's  competition,  as  well  as the  nature  and  scope  of  such
protection,  has been carefully considered by the parties hereto in light of the
uniqueness of Deignan's  talent and his importance to the Company.  Accordingly,
Deignan agrees that, in addition to any other relief to which the Company may be
entitled,  the Company  shall be entitled to seek and obtain  injunctive  relief
(without the  requirement  of any bond) for the purpose of  restraining  Deignan
from any actual or threatened  breach of the covenants  contained in paragraph 8
of this Agreement.

     (b) If for any  reason  a court  determines  that  the  restrictions  under
paragraph 8 of this Agreement are not reasonable or that consideration  therefor
in adequate,  the parties  expressly  agree and covenant that such  restrictions
shall be interpreted,  modified or rewritten by such court to include as much of
the duration and scope identified in paragraph 8 as will render the restrictions
valid and enforceable.

     10.  Notices.  Any notice to be given to the  Company or Deignan  hereunder
shall be deemed given if delivered personally,  telefaxed or mailed by certified
or registered mail, postage prepaid,  to the other party hereto at the following
addresses:

        To the Company: Vasomedical, Inc.
                        180 Linden Avenue
                        Westbury, New York  11590

        To Deignan:     D. Michael Deignan
                        6 Wax Myrtle Court
                        Hilton Head Island, South Carolina  29926

Either  party may change the address to which  notice may be given  hereunder by
giving notice to the other party as provided herein.

     11.  Successors and Assigns.  This Agreement  shall inure to the benefit of
and be binding upon the Company,  its successors and assigns,  and upon Deignan,
his heirs, executors, administrators and legal representatives.
<PAGE>
     12. Entire  Agreement.  This  Agreement  constitutes  the entire  agreement
between the parties except as specifically otherwise indicated herein.

     13. Governing Law. This Agreement shall be construed in accordance with the
laws of the State of New York.

     14. In the event (a) the  Company has been  consolidated  or merged into or
with any other  corporation  or all or  substantially  all of the  assets of the
Company  have been sold to another  corporation,  with or without the consent of
Employee,  in his sole  discretion;  or (b) the  Company  undergoes  a Change of
Control, as hereinafter defined below, without prior Board approval; then

Employee is entitled to the following settlement benefits:

     (i)  a lump-sum  payment  for the  greater of (A) twelve (12) months of the
          annual  salary  provided in section  4(a) hereof or (B) the balance of
          compensation for the term of this Employment Agreement; and
     (ii) any and all stock options and warrants  held by Employee  shall become
          immediately vested and exercisable; if

          (A)  Employee  voluntarily and unilaterally  resigns his position with
               the Company within 30 days of an event described in Section 14(a)
               or (b) hereof, or
          (B)  Employee is given notice of  termination  directly as a result of
               such  Change  in  Control  within  six  (6)  months  of an  event
               described in Section 14(a) or (b) hereof, or
          (C)  Employee's  place of  employment  is moved beyond a  hundred-mile
               radius, as the crow flies, from 180 Linden Avenue,  Westbury, New
               York 11590 (or the Company's then current business  address) as a
               direct  result  of an event  described  in  Section  14(a) or (b)
               hereof.

     A  "Change  of  Control"  of the  Company,  or in any  person  directly  or
indirectly controlling the Company, shall mean:

     (i) a change of control  as such term is  presently  defined in  Regulation
240.12b-2 under the Securities Exchange Act of 1934 (the "Exchange Act");

     (ii) if during the Term of employment any "person" (as such term is used in
Section  13(d) and 14(d) of the  Exchange  Act)  other  than the  Company or any
person who on the date of this Employment  Agreement is a director or officer of
the Company,  becomes the  "beneficial  owner" (as defined in Rule 13(d)03 under
the  Exchange  Act),  directly  or  indirectly,  of  securities  of the  Company
representing  20%  of  the  voting  power  of  the  Company's  then  outstanding
securities; or

     (iii) if during the Term of employment the individuals who at the beginning
of such  period  constitute  the Board  cease for any reason  other than  death,
disability or retirement to constitute at least a majority thereof."

     IN WITNESS  WHEREOF,  the parties  hereto  have  executed  this  Employment
Agreement as of the day and year first above written.


                                VASOMEDICAL, INC.

                                By: /s/ Abraham E. Cohen
                                    -----------------------------
                                        Abraham E. Cohen
                                        Chairman of the Board


                                   /s/ D. Michael Deignan
                                    -----------------------------
                                       D. Michael Deignan
                                       Employee