AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT

     THIS AMENDMENT is made as of the 23h day of October,  1998, between Karl H.
Kostusiak ("Executive") and Detection Systems, Inc. ("Company").

     The parties  entered into an Employment  Agreement dated July 14, 1998 (the
"Employment  Agreement")  and  a  Non-Competition,  Disability,  and  Retirement
Agreement  dated the same date (the  "Non-Competition  Agreement").  Desiring in
this  Amendment No. 1 to set forth certain  agreed  amendments to the Employment
Agreement  and the  Non-Competition  Agreement,  the  parties  hereby  agree  as
follows:

     1.  Amendment  of Section  7(b) of  Employment  Agreement  . The portion of
Section 7(b) of the Employment  Agreement appearing before subsection 7(b)(1) is
hereby amended in its entirety to read as follows:

            "(b)  If:

                    (i)  any Change in Control of the Company  occurs while this
                         Agreement is effective, and

                    (ii) Executive  gives  notice to the  Company or the Company
                         (acting upon a determination of its Board of Directors)
                         gives notice to Executive, in either case to the effect
                         that the six month  period  called for by this  Section
                         7(b) shall begin to run, and

                    (iii)Executive's  employment  is  terminated by Executive or
                         by the  Company  (other than for  Executive's  death or
                         disability) within six months after the date the notice
                         provided for in (ii) above is received (in  Executive's
                         case the termination being effected by Executive giving
                         notice within that six month period,  effective  within
                         30 days after the notice is given,  that his employment
                         is  terminated),  regardless  the reason,  if any,  and
                         regardless  which party gave the notice provided for in
                         (ii) above, then the Company shall pay,  transfer,  and
                         provide to Executive the following  amounts,  benefits,
                         and assets:"


     2. Amendment of Section 4 of Non-Competition Agreement. The first paragraph
of Section 4 of the  Non-Competition  Agreement is hereby amended to read in its
entirety as follows:
<PAGE>

          "4. Consulting Services.  If this Agreement becomes effective upon the
     occurrence of any contingency set forth in Section 19 other than subsection
     19(b) or (c),  beginning upon the date of that  occurrence  Executive shall
     hold himself available to the Company for providing  consulting services to
     it as an independent contractor at mutually agreeable times and places; and
     the  Company  shall  have the  right  to call  upon  Executive,  so long as
     Executive  is able,  for up to 8 days of  consulting  services  per year to
     provide information  concerning matters that occurred,  were developed,  or
     were determined  while  Executive was a full-time or part-time  employee of
     the Company.  Unless otherwise agreed,  those consulting  services shall be
     rendered  at a place  and time  mutually  agreed  (but  within  25 miles of
     Executive's  residence at the time) and shall be paid at the rate of $1,500
     per day (or up to 100 hours of  consulting  services  per year at an hourly
     rate to be agreed upon).  Any other  consulting  services shall be provided
     if, as, and when the parties may agree."


     3.  Amendment  of Section 9 of  Non-Competition  Agreement.  The portion of
Section 9 of the  Non-Competition  Agreement appearing before subsection 9(b) is
hereby amended to read in its entirety as follows:

          "9.  Retirement.  The Company hereby agrees that, if not ended sooner,
     the Term of Service as used in the  Employment  Agreement  shall end at the
     close of business on December 31 of the year in which Executive attains the
     age of 68, and  beginning  on the  opening of  business on January 1 of the
     next year (and  regardless  whether the Term of Service ended prior to that
     December  31), the Company will pay Executive  retirement  benefits for his
     lifetime  and for his spouse's  lifetime,  if his spouse  survives  him, as
     follows:  
          (a) a  retirement  wage  benefit  initially  equal  to 20% of the base
     salary rate being paid to Executive at the end of his full time  employment
     with the  Company,  increased  for each year after the end of his full time
     employment by any increase in the CPI (as defined  below),  except that the
     retirement  wage benefit  shall be equal to 60% of that base salary rate at
     the end of  Executive's  full time  employment  with the Company,  plus CPI
     increases,  effective for any retirement year after a Change in Control and
     after either  Executive is no longer a full time employee of the Company or
     Executive  or the  Company  has given the  notice  provided  for in Section
     20(b)(ii) below, and except that the retirement wage benefit for his spouse
     shall be 75% of the amount thus  calculated for each year after the year of
     Executive's death;"
<PAGE>

            [Note that Section 20(b)(ii) is added in Section 4 below.]

Also, a new subsection (d) shall be added to Section 9, which shall read in
its entirety as follows:

            "(d)  The  retirement  benefits  provided under this Section 9 (and,
      if  applicable,  Section 10) shall be paid as provided  herein  regardless
      whether the Company has any claims  against  Executive  for default  under
      this Agreement or for any other breach of duty or otherwise,  and,  except
      as  otherwise  provided in Section 7 above,  the  Company  shall pay those
      retirement  benefits as provided  and must  pursue  remedies  for any such
      default  or  other   breach  of  duty  or  other  claim   separately   and
      independently."


     4.  Amendment of Section 20 of  Non-Competition  Agreement.  The portion of
Section  20(b) of the  Non-Competition  Agreement  appearing  before  subsection
20(b)(1) is hereby amended in its entirety to read as follows:

            "(b)  If:
                    (i)  any Change in Control of the Company  occurs while this
                         Agreement is effective, and

                    (ii) Executive  gives  notice to the  Company or the Company
                         (acting upon a determination of its Board of Directors)
                         gives notice to Executive, in either case to the effect
                         that the six month  period  called for by this  Section
                         20(b) shall begin to run, and

                    (iii)Executive's   consulting  services  are  terminated  by
                         Executive or by the Company (other than for Executive's
                         death or  disability)  within six months after the date
                         the notice  provided  for in (ii) above is received (in
                         Executive's  case the  termination  being  effected  by
                         Executive  giving  notice within that six month period,
                         effective  within 30 days  after  the  notice is given,
                         that his  consulting  services  are  terminated  to the
                         extent permitted under Section 4 above), regardless the
                         reason,  if any,  and  regardless  which party gave the
                         notice  provided  for in (ii)  above,  then the Company
                         shall  pay,  transfer,  and  provide to  Executive  the
                         following amounts, benefits, and assets:"

     5.  Continuation  of Agreements The parties  acknowledge and agree that, as
amended  by  this   Amendment   No.  1,  the   Employment   Agreement   and  the
Non-Competition  Agreement  remain  binding and in full force and effect between
the Company and Executive.

     IN WITNESS  WHEREOF the Company and Executive  have executed this Amendment
No. 1 as of the date set forth above.


                                        /s/Karl H. Kostusiak, Executive


                                        DETECTION SYSTEMS, INC.

                                        By: /s/Donald R. Adair, Chairman of
                                        the Compensation Committee of
                                        the Board of Directors