Exhibit 10.20

                           EMPLOYEE BENEFITS AGREEMENT


         This Employee  Benefits  Agreement (the "Agreement") is entered into as
of the  1st day of  August,  1997,  by and  between  Elcom  Systems,  Inc.  (the
"Company") and Peter McAree ("Employee").


                                   WITNESSETH:

         WHEREAS, Employee is a key employee of the Company; and

         WHEREAS,  the Company  considers that  providing  Employee with certain
employment  benefits will operate as an incentive for Employee during the period
of this  Agreement,  during  which time Elcom  International,  Inc.,  the parent
corporation  of the Company  (the  "Parent")  may undergo a change in control or
ownership, or may cause a change in control or ownership of the Company; and

         WHEREAS, this Agreement is intended to provide benefits in the event of
a change in control or  ownership  of Parent or the Company  prior to January 1,
1999 (the "Expiration Date"); and

         WHEREAS, this Agreement is also intended to provide certain benefits in
the event of a termination of Employee under certain  circumstances prior to the
Expiration Date.

         NOW THEREFORE,  to induce Employee to remain productive,  and for other
good and valuable consideration,  the receipt and sufficiency of which is hereby
acknowledged, the Company and Employee agree as follows:

         1.       Definitions.

          (a)  "Change of Control"  shall mean the  occurrence of any one of the
               following events:

               (i)  The  stockholders of the Parent or the Company approve (A) a
                    merger or  consolidation  of the Parent or the Company  with
                    any other corporation,  other than a merger or consolidation
                    which would result in the voting securities of the Parent or
                    the Company,  as applicable,  outstanding  immediately prior
                    thereto   continuing  to  represent   (either  by  remaining
                    outstanding or by being converted into voting  securities of
                    the surviving  entity) more than eighty percent (80%) of the
                    combined voting power of the voting securities of the Parent
                    or the Company,  as  applicable,  or such  surviving  entity
                    outstanding  immediately after such merger or consolidation,
                    or (B) a plan of complete  liquidation  of the Parent or the
                    

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                    Company or an agreement for the sale or  disposition  by the
                    Parent or the Company of all or substantially all the assets
                    of the Parent or the Company to other than the Parent or any
                    of its subsidiaries; or

               (ii) During any period of one (1) year,  a majority  of the Board
                    of  Directors  of the  Parent  or the  Company  ceases to be
                    comprised  of  "Continuing   Directors,"   which  term,  for
                    purposes of this Subsection 1(a), shall mean individuals who
                    at  the  beginning  of  any  period  of one  (1)  year  (not
                    including  any period  which ended prior to the date of this
                    Agreement)  constitute  the  Board  and any new  director(s)
                    whose  election by the Board or  nomination  for election by
                    the Parent's or the Company's  stockholders,  as applicable,
                    was  approved  by a  vote  of at  least  a  majority  of the
                    directors  then still in office who either were directors at
                    the beginning of the period or whose  election or nomination
                    for election was previously so approved; or

             (iii)  Any "person" (as defined in Sections  13(d) and 14(d) of the
                    Securities  Exchange Act of 1934, as amended (the  "Exchange
                    Act")) is or becomes the  "beneficial  owner" (as defined in
                    Rule 13d-3 under the Exchange Act),  directly or indirectly,
                    of securities  of the Parent or of the Company  representing
                    fifty percent (50%) or more of the combined  voting power of
                    such entity's then outstanding  securities;  provided that a
                    Change of  Control  shall not be deemed to occur  under this
                    clause (iii) by reason of the  acquisition  of securities by
                    the Parent,  the Company or an employee benefit plan (or any
                    trust  funding such a plan)  maintained by the Parent or the
                    Company.

         (b)      "Severance Payments" shall mean any payment or distribution of
                  compensation  or benefits  made  pursuant to Section 3 of this
                  Agreement.

         (c)      "Separation  Date" shall mean the date, if any, of termination
                  of Employee's employment relationship with the Company.

         (d)      "Voluntary Separation" shall mean the voluntary resignation by
                  Employee  from  employment  with  the  Company  other  than  a
                  voluntary  resignation  following  either of the following two
                  events:

                  (i)      any future reduction in Employee's base salary; or

                  (ii)     a future relocation of Employee's place of employment
                           which  results in an  increase  of  twenty-five  (25)
                           miles  or  more  in  the  distance  from   Employee's
                           residence to Employee's place of employment.

         (e)      "Termination   With  Cause"  shall  mean  any  termination  of
                  Employee  by the  Company  for  malfeasance,  insubordination,
                  theft,  fraud,  embezzlement,  

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<PAGE>

                    conviction  of a felony,  being under the  influence of
                    alcohol  or  unlawful  drugs  during  business  hours,   the
                    violation  of  Section 4 of this  Agreement  or of any other
                    agreement  with the  Company,  the removal of any  equipment
                    without the Company's written  permission,  the violation of
                    any  state  or  federal  law,  repeated   tardiness  without
                    acceptable  reasons  therefor,  and/or the failure to comply
                    with any of the Company's written policies and procedures.

         2.       Termination of Employee.

         (a)      Related  to Change  of  Control.  In the  event of  Employee's
                  termination of employment  with the Company within twelve (12)
                  months  following  the  date on which  there  is a  Change  of
                  Control of the Parent or of the Company, subject to Section 13
                  hereof,  the Company shall provide Employee with the Severance
                  Payments  outlined  in Section  3(a)(i)  and 3(b),  unless the
                  termination  is  a  Termination  With  Cause  or  a  Voluntary
                  Separation.

         (b)      Upon Certain Other  Terminations.  In the event that no Change
                  of Control of the Parent or the Company has  occurred  and the
                  Company terminates Employee's employment relationship prior to
                  the Expiration Date,  unless such termination is a Termination
                  With Cause,  subject to Section 13 hereof,  the Company  shall
                  provide  Employee  with the  Severance  Payments  outlined  in
                  Section 3(a)(ii) and 3(b).

         (c)      No  Duplication.  In no event  shall  Employee  be entitled to
                  receive benefits or Severance Payments under both Section 2(a)
                  and Section 2(b) hereof.

         3.       Severance Payments.

         (a)      Compensation.

                  (i)      Related  to Change  of  Control.  In the  event  that
                           Employee is entitled to Severance  Payments  pursuant
                           to the terms of Section  2(a),  the Company shall pay
                           Employee  an amount  equal to twelve (12) months base
                           salary  as of the  Separation  Date,  without  giving
                           effect to any future  reduction  in base salary prior
                           to the Separation  Date,  payable in accordance  with
                           the provisions of Section 13 hereof.

                  (ii)     Upon Certain  Other  Terminations.  In the event that
                           Employee is entitled to Severance  Payments  pursuant
                           to the terms of Section  2(b),  the Company shall pay
                           Employee  an amount  equal to twelve (12) months base
                           salary  as of the  Separation  Date,  without  giving
                           effect to any future  reduction  in base salary prior
                           to the Separation  Date,  payable in accordance  with
                           the provisions of Section 13 hereof.

                  (iii)    Payment  of  Compensation.   Subject  to  Section  13
                           hereof,  such  payments  shall be made in  accordance
                           with the Company's  normal payroll  practices 

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<PAGE>

                        as such practices shall be in effect from time to 
                        time, provided,  however, that the Company may elect 
                        to accelerate payments required under this Section 3(a).

         (b)      Employee  Benefits.  In the event that Employee is entitled to
                  Severance  Payments  pursuant  to  the  terms  of  Section  2,
                  Employee shall be entitled to the following benefits,  subject
                  to Section 13 hereof:

                  (i)      Vacation.  Any accrued  vacation  pay due but not yet
                           taken  at  the  Separation  Date  shall  be  paid  to
                           Employee   within  thirty  (30)  days  following  the
                           Separation Date.

                 (ii)    Health Benefits. If Employee participated in any health
                         benefit  plan  in  effect   immediately  prior  to  the
                         Separation  Date,  and if  Employee  elects to continue
                         participating  in such  plan  pursuant  to the terms of
                         said  plan  and  the   Comprehensive   Omnibus   Budget
                         Reconciliation Act ("COBRA"), the Company shall pay for
                         its  normal   portion   of  the  costs  of   Employee's
                         participation  in such  plan from the  Separation  Date
                         until  the  earlier  of:  (a) the  date  which is three
                         months  following the Separation  Date; or (b) the date
                         of Employee's  eligibility  in any health  benefit plan
                         offered by Employee's  new employer,  if any.  Employee
                         shall notify the Company in writing  within thirty (30)
                         days of any new employment.

                  (iii)    Retirement   and   Benefit   Plans.   Notwithstanding
                           anything   in  this   Agreement   to  the   contrary,
                           Employee's rights in any retirement,  pension,  stock
                           option or profit-sharing  plans offered by the Parent
                           or the Company shall be governed by the rules of such
                           plans as well as by applicable law.

                  (iv)     Outplacement  Assistance.  The Company  will  provide
                           Employee   up  to  two  (2)   months  of   employment
                           outplacement   services   with   a   Company-selected
                           service.

         4. Continuing Obligations. In order to induce the Company to enter into
this Agreement,  Employee hereby agrees that all documents, records, techniques,
business  secrets  and  other   information  which  have  come  into  Employee's
possession  from time to time  during  Employee's  continued  employment  by the
Company  or  which  may  come  into  Employee's   possession  during  Employee's
employment hereunder,  shall be deemed to be confidential and proprietary to the
Company,  and Employee  further agrees to retain in confidence any  confidential
information known to Employee concerning the Company, the Parent, any subsidiary
of the Parent,  and their  respective  businesses so long as such information is
not publicly disclosed.  Employee further agrees to cooperate fully as requested
from time to time by the Company's  Board of Directors or Company  Management in
connection with any transaction  involving the possible sale of the Parent or of
the Company.  Employee  further agrees not to speak about a possible sale of the
Parent or of the Company  with or  otherwise  respond to requests to or from any
third  parties  involving  the  possible  sale of the Parent or of the  Company,
unless  specifically  

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<PAGE>

authorized  to do so by the  Company.  The  obligations  of Employee  under this
Section 4 shall be in addition to, and shall not limit,  any other obligation of
Employee  to the  Company  with  respect  to the  matters  set  forth  herein or
otherwise.

         5.  Assignments  and Transfers.  Employee agrees that Employee will not
assign, sell, transfer, delegate or otherwise dispose of, whether voluntarily or
involuntarily,  or by  operation of law,  any rights or  obligations  under this
Agreement,  nor shall Employee's  rights be subject to encumbrance or the claims
of creditors.  Any purported  assignment  shall be null and void. This Agreement
shall inure to the benefit of and be enforceable by Employee's personal or legal
representatives,  executors,  administrators,  successors,  heirs, distributees,
devisees and legatees.  This Agreement  shall be binding upon and shall inure to
the benefit of the Company and its successors and assigns, and the Company shall
require any  successor or assign to  expressly  assume and agree to perform this
Agreement  in the same manner and to the same  extent that the Company  would be
required to perform it if no such  succession  or  assignment  had taken  place,
except no  assumption  shall be  required  if this  Agreement  is  automatically
assumed by operation of law. The term "the Company" as used herein shall include
such  successors and assigns.  The term  "successors and assigns" as used herein
shall  include  a  corporation  or other  entity  acquiring  at least 51% of the
outstanding  shares of the Company or all or substantially all of the assets and
business of the Company.

         6.  Notices.  For  purposes  of this  Agreement,  notices and all other
communications  provided  for herein  shall be in writing and shall be deemed to
have been duly  given and  received  when  delivered,  including  by a  national
overnight  courier  service  or when  mailed  by  United  States  registered  or
certified mail,  return receipt  requested,  postage  prepaid,  addressed to the
Company at:

                           Elcom Systems, Inc.
                           10 Oceana Way
                           Norwood, Massachusetts 02062
                           Attn: Chief Financial Officer

  and to Employee at:

                           Peter McAree
                           17 Blackthorne Circle
                           Hopkinton, MA  01748

or such  address as either  party may have  furnished to the other in writing in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.

         7.  Governing  Law.  The  validity,  interpretation,  construction  and
performance of this Agreement shall be governed by the laws of the  Commonwealth
of Massachusetts.

         8. At-Will  Employment.  At the present time,  the Company and Employee
have, and will continue to have, an at-will  employment  relationship.  That is,
either party can terminate  the  

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<PAGE>

employment  relationship for any reason at any time.  Nothing  contained in this
Agreement  shall  be  interpreted  to amend or  alter  this  at-will  employment
relationship.

         9. Entire  Agreement.  The terms of this  Agreement are intended by the
parties to be the final expression of their agreement with respect to Employee's
severance benefits and supersedes any previous or contemporaneous agreements.

         10. Amendments;  Waivers. This Agreement may not be modified,  amended,
or terminated  except by an  instrument in writing,  signed by Employee and by a
duly authorized representative of the Company other than Employee. No failure to
exercise and no delay in exercising any right,  remedy, or power hereunder shall
operate as a waiver  thereof,  nor shall any single or partial  exercise  of any
right, remedy, or power hereunder preclude any other or further exercise thereof
or the exercise of any other right,  remedy,  or power provided herein or by law
or in equity.

         11. Severability;  Enforcement.  If any provision of this Agreement, or
the application thereof to any person, place or circumstance, shall be held by a
court of  competent  jurisdiction  to be invalid,  unenforceable,  or void,  the
remainder of this  Agreement and such  provisions  as applied to other  persons,
places, and circumstances shall remain in full force and effect. Notwithstanding
any other provision in this Agreement to the contrary,  if Employee breaches any
term of this  Agreement,  the Company may  immediately  cease  making  Severance
Payments.

         12. Arbitration. The parties agree to submit any unresolved substantial
dispute arising under this Agreement to arbitration.  Arbitration  shall be by a
single arbitrator in the Norwood,  Massachusetts area experienced in the matters
at issue selected by the Company and Employee in accordance  with the commercial
arbitration rules of the American Arbitration  Association.  The decision of the
arbitrator  shall be final and binding as to any matter submitted to arbitration
under this  Agreement.  All costs and expenses  incurred in connection  with any
such  arbitration  proceeding  shall  be  borne by the  party  against  whom the
decision is rendered as provided by the arbitrator.

         13. Release.  As a condition to and in consideration for the receipt of
Severance  Payments  to which  Employee  may be  entitled  pursuant to Section 3
hereof,  Employee  agrees to execute a Release  Agreement  with the Company,  in
substantially  the same form as that attached  hereto as Exhibit A (the "Release
Agreement"),  within  the  30-day  period  beginning  21 days  after  Employee's
Separation  Date.  The  Company  shall not be  obligated  to make any  Severance
Payments  unless and until the  Company  shall  have  received  from  Employee a
validly executed Release  Agreement that shall not have been revoked by Employee
during the applicable  Revocation  Period as such term is defined in the Release
Agreement,  in compliance with applicable  law.  Provided that Company  receives
from Employee a validly executed  Release  Agreement which is not revoked during
the applicable  Revocation  Period,  the Company  agrees to commence  making any
Severance Payments theretofore withheld within 30 days of the expiration of such
Revocation Period.


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<PAGE>

         14.  Expiration Date. This Agreement shall be null and void if an event
which would entitle  Employee to Severance  Payments does not occur on or before
the Expiration Date.

         IN WITNESS  WHEREOF,  the  parties  have caused  this  Agreement  to be
executed and delivered as of the day and year set forth above.


                                           ELCOM SYSTEMS, INC.

                                           ("Company")



                                           By  /s/ Robert J. Crowell
                                           Robert J. Crowell
                                           Chairman and Chief Executive Officer



                                           By  /s/ Peter McAree
                                           Peter McAree
                                           ("Employee")


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<PAGE>




                                RELEASE AGREEMENT


         This  Release  Agreement  (the  "Agreement")  is entered into as of the
Effective  Date of the  Agreement  stated on the  signature  page below,  by and
between Elcom Systems, Inc. (the "Company") and Peter McAree ("Employee").


                                   WITNESSETH:

         WHEREAS, Employee and the Company have entered into a Employee Benefits
Agreement dated as of August 1, 1997 (the "Employee Benefits Agreement"); and

         WHEREAS,  Employee is entitled to certain  benefits  under the Employee
Benefits Agreement,  pursuant to Section 13 of which payment of such benefits is
made conditional  upon and in consideration  for Employee's valid execution of a
Release  Agreement,  all as more completely  described in the Employee  Benefits
Agreement.  (Capitalized  terms not  otherwise  defined  herein  shall  have the
meaning ascribed to them in the Employee Benefits Agreement.)

         NOW  THEREFORE,  to induce the Company to make the  Severance  Payments
pursuant to the  Employee  Benefits  Agreement,  and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and Employee agree as follows:

         1.  Release.  Employee  does hereby,  for  Employee and for  Employee's
heirs,  executors,  successors  and assigns,  release and forever  discharge the
Company,  Elcom  International,  Inc.,  the parent  corporation  of the  Company
("Elcom"),  and the subsidiaries,  divisions and affiliated businesses of either
the  Company  or  Elcom,  together  with  all  of  their  officers,   directors,
management,   representatives,   employees,  shareholders,  agents,  successors,
assigns, attorneys and other affiliated persons, both known and unknown, in both
their personal and agency capacities  (collectively,  the  "Releasees"),  of and
from any and all claims, demands, actions or causes of action, damages, or suits
at law or equity, of whatsoever kind or nature,  including,  but not limited to,
all claims and/or demands for back pay,  reinstatement,  hire or re-hire,  front
pay,  group  insurance  or employee  benefits of  whatsoever  kind (except as to
rights expressly  provided for herein and in the Employee  Benefits  Agreement),
claims for monies and/or expenses,  any claims arising out of or relating to the
cessation of Employee's  employment  with the Company,  the sale of the stock or
assets of the Company or of Elcom,  any claims for failing to obtain  employment
at any other  company or with any other person or employer,  and/or  demands for
attorneys'  fees and legal  expenses  that Employee has or may have by reason of
any matter or thing  arising out of, or in any way connected  with,  directly or
indirectly,  any act and/or  omission  that has occurred  prior to the Effective
Date of Agreement  (as  hereinafter  defined).  Employee  further  agrees not to
directly or indirectly  pursue or initiate any action or legal proceeding of any
kind against the Releasees  arising out of or related to the claims  released in
the preceding  sentence of this Section 1, or the sale of the stock or assets of
the  Company  or Elcom 

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<PAGE>

and also  waives  any  right to  recover  as a  result  of any such  proceedings
initiated on Employee's behalf.  Notwithstanding the foregoing, Employee and the
Company  agree  and  acknowledge  that  this  Release  shall  not  apply  to the
obligations  of the Company  arising  solely  under this  Agreement or under the
Employee Benefits Agreement.

         2. ADEA.  Employee  recognizes and understands  that, by executing this
Agreement,  employee  shall be releasing the  Releasees  from any and all claims
that Employee now has, or subsequently may have, under the Age Discrimination in
Employment Act of 1967, 19 U.S.C. ss.ss.621 et seq., as amended (the "ADEA"), by
reason of any  matter or thing  arising  out of, or in any way  connected  with,
directly or indirectly,  any acts or omissions  which have occurred prior to and
including the Effective Date of this  Agreement.  In other words,  Employee will
have none of the legal rights against the aforementioned Releasees that Employee
would have had otherwise  under federal age  discrimination  law by signing this
Agreement.

         3. "Consideration  Period." The Company hereby notifies Employee of his
right to consult with  Employee's  chosen legal counsel  before  executing  this
Agreement.  The Company shall afford, and Employee acknowledges  receiving,  not
less than  twenty-one  (21) calendar days in which to consider this Agreement to
insure that Employee's execution of this Agreement is knowing and voluntary.  In
signing below,  Employee  expressly  acknowledges that Employee has had at least
twenty-one (21) days to consider this Agreement and that Employee's execution of
same is with full knowledge of the consequences thereof and is of Employee's own
free will.

         4.  Revocation  Period.  Employee and the Company  agree and  recognize
that, for a period of seven (7) calendar days following  Employee's execution of
this Agreement (the "Revocation Period"),  Employee may revoke this Agreement by
providing  written notice revoking the same,  within the Revocation  Period,  to
Elcom Systems,  Inc., 10 Oceana Way, Norwood,  Massachusetts  02602, Attn: Chief
Financial   Officer.   Such  revocation  of  this  Agreement  by  Employee  will
automatically  revoke  the  Severance  Payments  provided  for in  the  Employee
Benefits  Agreement  and  Employee  will not be  entitled  to any of the amounts
described therein.

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<PAGE>



         IN  WITNESS  WHEREOF,  Employee  and the  Company  have  executed  this
Agreement effective and binding as of the Effective Date.


       Date of Execution by Employee
          "Effective Date of Agreement" is          AGREED TO AND ACCEPTED BY
           the 8th calendar day after this Date       EMPLOYEE

                                                    Peter McAree

                                                    Execution witnessed by:




         Date of Execution by the Company           AGREED TO AND ACCEPTED BY
                                                     THE COMPANY

                                                    ELCOM SYSTEMS, INC.

                                                    By:
                                                    Its:

                                                    Execution witnessed by:






-------------------------------------------------------------------------------


         Date of Receipt by Employee                RECEIPT ACKNOWLEDGED BY
                                                      EMPLOYEE


                                                    Peter McAree

                                                    Receipt witnessed by:



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