<PAGE>


                                                                   EXHIBIT 10.38

                              EMPLOYMENT AGREEMENT

This  Agreement is made and entered  into as of October 1, 1998,  by and between
Paravant  Computer  Systems,  Inc., a Florida  corporation (the "Company"),  and
Edward W. Stefanko (the "Employee").

The parties hereto,  in  consideration  of the premises and the mutual covenants
herein contained, hereby agree as follows:

1. Term of  Employment.  Subject  to the terms and  conditions  hereinafter  set
forth,  the Company agrees to employ the Employee for a period of forty-two (42)
months.  The Employee commits to be employed for a period commencing on the date
hereof and ending no earlier than  December 31, 2000.  Upon  completion of forty
two (42) months of  employment  the Company and  Employee may extend the term of
employment  for an  additional  year by mutual  agreement.  Notwithstanding  the
foregoing,  the Employee  shall be entitled to terminate  his  employment at any
time  after the date  hereof  if:  (i) the  Employee  recommends  an  individual
qualified  to  perform  the  Employee's  job  responsibilities  (the  "Qualified
Replacement")  and (ii) the prior EDL and STL  shareholders,  who are  currently
employees,  first  approve  and  then  the  Company  approves  of the  Qualified
Replacement,  said approval not to be unreasonably  withheld. If such consent is
unreasonably  withheld,  then damages are limited to zero; however, the Employee
would be entitled to any  Earn-Out  ("Earn-Out")  provided for in Section 1.3 of
the  Acquisition  Agreement  dated as of March 31,  1998  between  the  Company,
Engineering  Development  Laboratories,  Incorporated ("EDL"), Signal Technology
Laboratories,  Inc. ("STL") and the  shareholders of EDL and STL,  including the
Employee,  which  should  have  been  paid as  performance  bonus or  additional
compensation.

2. Forfeiture of Earn-Out.  If the Employee  terminates his employment  prior to
December  31, 2000 without the approval of the Company he will forfeit his share
of Earn-Out to be paid for any Earn- Out Period  ending  after the date on which
he terminates his employment. The Company is not entitled to any further damages
caused as a result  of the  Employee's  termination  of his  employment.  If the
employment of the Employee is terminated by death or  disability,  as defined in
paragraph 5, then he or his  beneficiary  is still  entitled to his share of the
Earn-Out and his share of the Earn-Out is not subject to forfeiture.

3. Scope of  Employment.  During the term of  employment,  the Employee shall be
employed as the  President  and Chief  Executive  Officer  (CEO) of  Engineering
Development Laboratories, Incorporated, an Ohio corporation, and a subsidiary of
the Company  headquartered  in Dayton,  Ohio.  The  Employee  shall  render such
services  which are in  accordance  with his utmost  abilities and shall use his
best efforts to promote the interests of the Company and its  subsidiaries.  The
Employee  will not  engage  in any  capacity  or  activity  which  is, or may be
considered  contrary to the welfare,  interest or benefit of the business now or
hereafter  conducted  by the Company  and its  subsidiaries.  Employee's  duties
and/or  position  may be  modified  by mutual  agreement  of the Company and the
Employee.  The Company  shall not relocate the Employee  either  temporarily  or
permanently from Dayton, Ohio without Employee's consent during the term of this
Agreement.

4.  Compensation and Benefits.  (Attached)

<PAGE>
<PAGE>


5. Payments on Death or Disability.  In the event that the Employee shall die or
become  disabled  while  employed  under this  Agreement,  the Company shall pay
twelve (12) months compensation at the monthly  compensation rate, including all
benefits,  then in effect for the Employee (the  "Compensation") to his heir(s),
in the  cause  of his  death,  or to him or  his  guardian(s),  in  case  of his
disability,  (i)  in a  lump  sum  payment  or  (ii)  in  twelve  equal  monthly
installments,  which  lump sum or  installment  payment  method  shall be at the
discretion  of the  Employee  or his or her heir(s) or  guardian(s).  In case of
disability, the twelve (12) month period would begin as of the date on which the
Employee's   employment   hereunder  is  terminated  because  of  disability  as
hereinafter  provided.  Employee's  employment  hereunder  shall  be  terminated
because of  disability if (a) the Employee  shall become  physically or mentally
incapable  of  properly  performing  his  services  to the  Company as  provided
hereunder,   excluding   infrequent  and  temporary  absences  due  to  ordinary
illnesses,  (b) such incapacity  shall exist or be reasonably  expected to exist
for more than one hundred  fifty (150) days in the  aggregate  during any twelve
(12) consecutive  months covered  hereunder,  and (c) either the Employee or the
Company shall have given the other thirty (30) days written notice of his or its
intention  to  terminate  the  Employee's   employment  hereunder  due  to  such
disability. For purposes of this Agreement, the Employee may provide the Company
with a written  list of heirs in order of  preference  regarding  death  payment
benefits hereunder. The list may be altered and changed from time to time by the
Employee by giving  written  notice of such  changes or new list  thereof to the
Company as provided herein.  In the event of death, if no list has been provided
by the  Employee,  then all  compensation  provided  for in this  paragraph 5 is
payable to the estate of the Employee.

6. Covenant Not to Compete.  During the Term of  Employment  and for a period of
five (5) years  thereafter,  the  Employee  shall not  (except  on behalf of the
Company or a subsidiary  of the Company while the Employee is employed by either
the Company or a subsidiary of the Company or otherwise in  accordance  with the
Company's written consent) engage, directly or indirectly, in any business which
competes  in any manner  within the United  States of America  (the  "Geographic
Area"), with the Company's business of design,  manufacture,  repair and sale of
rugged and customized computer systems and medical computer assemblies or in any
other business of design, development,  manufacturing,  sales or service engaged
in or acquired by the Company or any subsidiary of the Company as of the date of
this  Agreement  or in  which  the  Company  employs  the  Employee  during  his
employment  under this Agreement.  For purposes of this Agreement,  the Employee
will be deemed to be engaged in a business if he  participates in such business,
directly or indirectly, as a stockholder, partner, owner, investor, principal or
agent, employee,  officer, director,  creditor,  consultant, or otherwise in any
manner in such business. The Employee shall not, for purposes of this paragraph,
be  deemed  a  stockholder  if he  holds  less  than  five  percent  (5%) of the
outstanding shares of any publicly-owned  corporation. In addition, the Employee
shall not at any time, during or after the termination of this Agreement, engage
in any business which uses as its name, in whole or in part,  "Paravant Computer
Systems,  Inc.",  "PCS" or any other name then used by the Company or any of its
affiliates or subsidiaries.

7. Non-Disclosure.  Except as may be required by law or on behalf of the Company
or a  subsidiary  of the  Company  while the  Employee is employed by either the
Company or a  subsidiary  of the Company or  otherwise  in  accordance  with the
Company's  written  consent,  the  Employee  will not at


                                               2

<PAGE>
<PAGE>


any time, directly or indirectly,  disclose or furnish to any other person, firm
or corporation; (a) the methods of conducting the business of the Company or its
subsidiaries or affiliates; (b) a description of any of the methods of obtaining
business,  or manufacturing or advertising  products,  or of obtaining customers
thereof; (c) any technology,  design drawings,  software,  or other intellectual
property or property  rights of the Company or its  subsidiaries  or  affiliates
owned by the Company or any of its subsidiaries as of the date of this Agreement
or  acquired  by the Company or any of its  subsidiaries  during the  Employee's
employment under this Agreement; or (d) any confidential information acquired by
him  during the  course of his  employment  by the  Company,  its  predecessors,
subsidiaries or affiliates, including, without limitation, the generality of the
foregoing,  the names of any new customers or  prospective  customers of, or any
person,  firm or corporation,  who or which have, or shall have, traded or dealt
with  (whether such  customers  have been obtained by the Employee or otherwise)
the Company, its predecessors, subsidiaries or affiliates.

8. Intellectual Property. As between the Employee and the Company, all products,
designs, styles, processes, discoveries, materials, ideas, creations, inventions
and properties,  whether or not furnished by the Employee,  created,  developed,
invented or used in connection  with the Employee's  employment with the Company
or any  subsidiary of the Company or the business  markets of the Company or any
subsidiary  of the Company  under this  Agreement  will be the sole and absolute
property of the Company and its subsidiaries for any and all purposes whatsoever
in perpetuity,  whether or not conceived,  discovered  and/or  developed  during
regular  working hours.  The Employee will not have, and will not claim to have,
under this Agreement or otherwise,  any right,  title or interest of any kind or
nature whatsoever in or to any such products, processes,  discoveries,  material
ideas,  creations,  inventions and properties which are related to the Company's
business markets.

9.  Arbitration.  Any  controversy  arising out of or relating to this Agreement
shall be resolved by  arbitration  in the State of Ohio pursuant to the rules of
the  American  Arbitration  Association  then in  effect.  The  decision  of the
arbitrator(s) is binding on both the Company and the Employee.

10. Termination for Convenience. The Company may terminate Employee's employment
under  this  Agreement  for  convenience  at any  time.  In the  event  of  such
termination  the Company shall make lump sum payments  equal to the value of the
compensation  (1 and 2 attached)  and benefits (3 of attached as would have been
normally  paid  if the  employment  continued),  including  but not  limited  to
non-qualified  deferred  compensation and health  insurance,  for forty-two (42)
months less the amount which has previously  been paid or used.

11.  Termination  for   Cause.  The  Company  may  terminate   this   Employee's
employment under this Agreement for "cause" without any liability to the Company
other  than  to pay the compensation benefits provided for in this Agreement for
services  rendered prior to the date of such  termination.  The following  shall
constitute  grounds  for termination  of the  Employee  for cause:  (i)  willful
or  gross  neglect by the  Employee of his duties of  employment  under,  or any
willful  misconduct  of  the Employee in connection  with the performance of his
duties  under  this Agreement; (ii) conviction of the Employee of any felony, or
of any lesser crime or offense materially and adversely  affecting the property,
reputation  or goodwill of the Company,  any  subsidiary  of the  Company or any
successor  or  assignee  of the  Company  or any  subsidiary of the Company;  or
(iii) any material  breach by the

                                        3

<PAGE>
<PAGE>
Employee of the terms of this Agreement.

12. Equitable  Remedies and Remedies at Law. The parties recognize that, because
of the nature of the subject matter of this Agreement it would be  impracticable
and extremely  difficult to determine  actual damages for a breach of certain of
the provisions of this Agreement,  specifically those provisions of paragraphs 6
and 7. Accordingly,  in the event of a violation or threatened  violation or any
provisions  of  this  Agreement,  specifically  including  those  provisions  of
paragraphs  6 and  7,  all  legal  and  equitable  remedies,  including  without
limitation,   injunctive  relief,  both  preliminary  and  permanent,  shall  be
available  and the posting of a surety bond shall not be required in  connection
therewith and money damages for any loss suffered as a consequence  of violation
of such provisions shall also be available.

13. Severability. The invalidity or unenforceability of any term or provision of
this  Agreement  or the  nonapplicability  of any such term or  provision to any
person or  circumstances  shall  not  impair or  affect  the  remainder  of this
Agreement,   and  the  remaining  terms  and  provisions  hereof  shall  not  be
invalidated, but shall remain in full force and effect and shall be construed as
if  such  invalid,  unenforceable  or  nonapplicable  provisions  were  omitted.
Further,  if  any  of the  covenants  contained  in  paragraphs  6 or 7 of  this
Agreement,  or any part  thereof,  are held to be  unenforceable  because of the
duration of such  provisions  or the area covered  thereby,  or the scope of the
activities sought to be restricted, the parties hereto agree that the arbitrator
or court  making  such  determination  shall  have  the  power  to  reform  such
provisions of this  Agreement to the maximum time,  geographic  limitations,  or
time permitted by applicable law.

14.  Governing Law. All of the provisions of this Agreement other than those set
forth in paragraphs 2, 6, and 7 shall be governed by,  construed and enforced in
all respects in accordance with the laws of the State of Ohio. The provisions of
paragraphs  2, 6, and 7 shall be  governed  by,  construed  and  enforced in all
respects in accordance with the laws of the State of Florida.

15. Captions.  Titles or captions of paragraphs  contained in this Agreement are
inserted  only as a  matter  of  convenience  and for  reference,  and in no way
define,  limit, extend or prescribe the scope of this Agreement or the intent of
any provision hereof.

16. Counterparts.  This Agreement may be executed in counterparts, each of which
shall constitute one and the same Agreement.

17. Construction.  The parties acknowledge that they have had the opportunity to
participate equally in the drafting of this Agreement and that in the event of a
dispute,  no party  shall be  treated,  for any  purpose,  as the author of this
Agreement or have any ambiguity resolved against such party on account thereof.

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

Paravant Computer Systems, Inc.

                                        4

<PAGE>
<PAGE>



By:       /s/   Krishan K. Joshi
       -----------------------------
       Krishan K. Joshi,
       Chairman of the Board and CEO

             /s/   Edward W. Stefanko
       ------------------------------
       Edward W. Stefanko, Employee

                                               5

<PAGE>
<PAGE>


COMPENSATION AND BENEFITS OF Edward W. Stefanko

POSITION: President and Chief Executive Officer (CEO) of EDL

1.  An annual salary of $ 169,300

2. A  non-qualified  deferred  compensation  (funded)  of 40 % of No. 1 $ 67,720
based on plan (attached).

3. Standard EDL/STL benefits package attached, modified as follows:

         a.  2x (twice) All Employee Incentive Program payment percentage.

         b. 16 hours of personal leave per payroll period.

         c. Life insurance of $ 169,300.

         d.  Continuation  of Health Care coverage for employee and spouse until
         each is eligible for Medicare coverage under existing plan benefits and
         at a cost no greater  than current  plan (see  attached).  This benefit
         continues  after  retirement  or  separation.  This  provision  will be
         interpreted  based upon laws and other  benefits that were in effect as
         of March 30, 1998.

Note:    The plans  referred to above as attached  have been  furnished  to the
         parties to the Acquisition Agreement.

                                       
                                        6


<PAGE>