

                                  EXHIBIT 10.3

                              EMPLOYMENT AGREEMENT


     This Employment  Agreement (the "Agreement") is entered into by and between
SRC VISION,  Inc., an Oregon  corporation (the "Company"),  and William J. Young
(the "Executive"), as of January 1, 1998.

     I. RECITAL.

     WHEREAS,  the Company  desires to employ the  Executive  as Chairman of the
Board.

     NOW,  THEREFORE,  the Company and the Executive desire to set forth in this
Agreement  the terms  and  conditions  of the  Executive's  employment  with the
Company.

     II. EMPLOYMENT.

     The Company hereby  employs the Executive and the Executive  hereby accepts
such  employment,  upon the terms and  conditions  hereinafter  set forth,  from
January 1, 1998 to and  including  December 31, 1999.  This  Agreement  shall be
automatically  renewed for one additional  year for each year subsequent to 1999
unless the  Executive or the Company gives notice to the other,  in writing,  at
least 30 days prior to the expiration of 1998 or, thereafter, 13 months prior to
the  expiration  of  the  Agreement,  of its or his  desire  to  terminate  this
Agreement or modify its terms.  The Company  agrees that the  Executive  will be
located, and will render such services, in the Medford, Oregon area.

     III. DUTIES.

     A. The  Executive  shall  serve  during  the  course of his  employment  as
Chairman of the Board of the Company  and shall have such other  similar  duties
and  responsibilities  as the Board of Directors of the Company shall  determine
from time to time.

     B. The Executive agrees to devote a portion of his time, energy and ability
to the business of the Company that he deems necessary.

     C. For the term of this Agreement,  the Executive shall report to the Board
of Directors of the Company.

     IV. COMPENSATION.

     A. Base Salary. The Company shall pay the Executive a Base Salary at a rate
to be  determined  by the  Compensation  Committee of the Board of Directors but
which rate shall not be less than the greater of

          (i) $35,000 per year, or

          (ii) if such rate is increased  from time to time by the  Compensation
     Committee, such increased rate of Base Salary.

     V. TERMINATION.

     A.  Death  or  Disability.   The  Executive's  employment  shall  terminate
automatically  upon the  Executive's  death.  If the Company  determines in good
faith that disability of the Executive has occurred  (pursuant to the definition
of Disability set forth below),  it may give to the Executive  written notice of
its  intention to  terminate  the  Executive's  employment.  In such event,  the
Executive's  employment with the Company shall terminate effective on the day of
receipt  of such  notice  by the  Executive.  For  purposes  of this  Agreement,
"Disability"  shall mean the absence of the  Executive  from his duties with the
Company on the basis  provided in this  agreement  for a period of 3 months as a
result of Incapacity due to mental or physical illness which is determined to be
total and  permanent by a physician  selected by the Company or its insurers and
acceptable to the Executive or his legal  representative.  "Incapacity"  as used
herein shall be limited only to such  Disability  which  substantially  prevents
Company from availing itself of the services of the Executive.

     B. Cause.  The Company may terminate the Executive's  employment for Cause.
For purposes of this Agreement,  "Cause" shall mean that the Company,  acting in
good faith based upon the information then known to the Company, determines that
the Executive has:

          (i)  committed  an act of fraud upon,  or an act  evidencing  material
     dishonesty toward the Company; or

          (ii) been  convicted of a felony,  which  conviction  through lapse of
     time or otherwise is not subject to appeal; or

          (iii)  willfully  refused  to  perform  material  required  duties and
     responsibilities  or  performed  them  with  gross  negligence  or  willful
     misconduct and failed to cure such misconduct given the opportunity  within
     thirty days written notice by the Company to remedy such acts.

     C.  Obligations  of the  Company  upon  Termination  Based  upon  Death  or
Disability or Cause.

          (i) Death or Disability.  If the Executive's  employment is terminated
     by reason of the  Executive's  Death or Disability,  this  Agreement  shall
     terminate  without  further  obligations  to the  Executive  or  his  legal
     representatives  under this Agreement,  other than for payments made by the
     Company to the Executive equal to the sum of:

               (a) the  Executive's  annual  Base  Salary  through  the  date of
          termination to the extent not theretofore paid, and

               (b) reasonable Employment Expenses,  as provided herein,  through
          the date of termination to the extent not theretofore paid.

     The sum of the amounts described in clauses (a)and (b) shall be hereinafter
referred to as the "Accrued Obligations" which shall be paid to the Executive or
his estate or beneficiary,  as applicable,  in a lump sum in cash within 30 days
of the date of termination.

          (ii) Cause. If the Executive's employment is terminated by the Company
     for Cause,  this Agreement shall terminate  without further  obligations to
     the Executive other than for the timely payment of Accrued Obligations.

     D.  Obligations  of the Company  upon  Termination  without  Cause.  If the
Executive's  employment  is  terminated  by the Company  other than for Cause as
described in Section V. B. above,  the Company  shall pay  Executive the Accrued
Obligations  and, in addition,  shall pay the  Executive an amount equal to 2.99
times the then  current  annual  Base  Salary in 24 equal  monthly  installments
unless such  termination  follows a "change of control"  (as  described  in this
Section  V. D.  below),  in which  case the  Company  will  immediately  pay the
Executive  such amount in a single cash lump sum  payment.  Termination  without
cause shall also be deemed to occur upon "Constructive Termination" as described
below.  Termination  pursuant to Section V. A. (Death or  Disability)  shall not
constitute  termination without cause under this Section V. D. In addition,  the
Company shall pay to the Executive or his estate or beneficiary,  as applicable,
Accrued Obligations.

     Change in  Control.  For  purposes of this  Agreement,  a change of control
shall mean:

          (i) any  transfer  or  series of  transfers  of  capital  stock of the
     Company,  other than as a result of a sale of capital  stock of the Company
     pursuant to a public offering  registered under the Securities Act of 1933,
     as  amended,  as a result  of which the  holders  of  capital  stock of the
     Company prior to such transfer or transfers become, collectively, the legal
     or beneficial holders of less than fifty percent (50%) of the capital stock
     of the Company;

          (ii) the  consummation of any merger or  consolidation  of the Company
     with  another  corporation;  provided,  however,  that no Change in Control
     shall be deemed to have occurred if,  immediately  following such merger or
     consolidation,  legal or beneficial holders of capital stock of the Company
     prior to such merger or  consolidation  shall own or  control,  directly or
     indirectly,   through  one  or  more   intermediaries,   equity  securities
     representing  the power to vote or  direct  the  voting of more than  fifty
     percent  (50%) of the  voting  power of all  classes  of equity  securities
     entitled to vote in the election of directors of the corporation  resulting
     from such merger or consolidation; or

          (iii) any  transfer of all or  substantially  all of the  business and
     assets of the Company to another corporation;  provided,  however,  that no
     Change  in  Control  shall  be  deemed  to have  occurred  if the  legal or
     beneficial  holders of capital  stock of the Company prior to such transfer
     of   control,   retain   directly  or   indirectly   through  one  or  more
     intermediaries,  the power to vote or direct  the voting of more than fifty
     percent  (50%) of the  voting  power of all  classes  of equity  securities
     entitled to vote in the election of directors of such  corporation to which
     all or  substantially  all of the  business  and assets of the  Company are
     transferred.

     For purposes of this Change in Control  section  only,  the term  "Company"
shall mean the Company or its parent, Advanced Machine Vision Corporation.

     Constructive  Termination.  For  purposes of this  Agreement,  constructive
termination shall occur if

          (i) the  Executive's  place of employment  or the  Company's  business
     office is moved more than 50 miles from its present location,

          (ii) there is a material downward change in the Executive's duties and
     responsibilities,  (iii) there is a downward change in the Executive's Base
     Salary,  or  (iv)  there  is a  change  in  the  Executive's  title  and/or
     responsibilities that is clearly a demotion.

     E. Special  Severance.  Following  the  expiration or  termination  of this
Agreement by breach or passage or time,  if the  Executive's  employment  at any
time is terminated  without  cause,  then the Company shall pay the Executive as
Special  Severance  compensation  an amount equal to 2.99 times the then current
annual Base Salary, payable in 24 equal monthly installments, subject to Section
V. F.  below.  This  Special  Severance  payment  shall be reduced  by  standard
withholding and other authorized deductions.

     F.  Notwithstanding  any other provision of this  Agreement,  the Executive
shall be entitled to, and the Company  will be  obligated to pay the  Executive,
severance in an amount equal to the lesser of

          (i) the amount prescribed by this Agreement, or

          (ii) the maximum permitted under then current U. S. Federal Income Tax
     Regulations  as  currently  described  in  Section  280(g) of the  Internal
     Revenue Code without triggering a "parachute" excise tax for the Executive,
     if applicable.  The Executive and the Company shall determine in good faith
     the maximum payment permitted under Federal Income Tax Regulations.

     VI. ARBITRATION.

     Any controversy or claim arising out of or relating to this Agreement,  its
enforcement or  interpretation,  or because of an alleged  breach,  default,  or
misrepresentation  in connection with any of its provisions,  shall be submitted
to arbitration,  to be held in Medford,  Oregon in accordance with the rules and
procedures of the American  Arbitration  Association.  In the event either party
institutes  arbitration  under this  Agreement,  the costs and  expenses of such
arbitration  (including counsel fees) shall be borne by each of the parties,  or
as the arbitrator(s) may determine at the request of either party.

     VII. CONFIDENTIAL INFORMATION.

     The  Executive  shall hold in a fiduciary  capacity  for the benefit of the
Company all secret or  confidential  information,  knowledge or data relating to
the Company or any of its affiliated companies, and their respective businesses,
which shall have been  obtained by the  Executive  during his  employment by the
Company  or any of its  affiliated  companies  and which  shall not be or become
public knowledge (other than by acts by the Executive or his  representatives in
violation of this Agreement).  After  termination of the Executive's  employment
with the  Company,  he shall  not,  without  the prior  written  consent  of the
Company, or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it.

     VIII. SUCCESSORS.

     A. This  Agreement is personal to the Executive and shall not,  without the
prior written consent of the Company, be assignable by the Executive.

     B. This  Agreement  shall inure to the  benefit of and be binding  upon the
Company and its  successors and assigns and any such successor or assignee shall
be deemed  substituted for the Company under the terms of this Agreement for all
purposes.  As used herein,  "successor" and "assignee" shall include any person,
firm,  corporation  or other  business  entity  which at any  time,  whether  by
purchase, merger or otherwise,  directly or indirectly acquires the stock of the
Company or to which the Company  assigns  this  Agreement by operation of law or
otherwise.  Prior to assignment or  succession of  obligations  to the Executive
under this Agreement,  all remaining monetary  obligations  (including,  but not
limited to,  severance,  benefits and applicable  employer taxes) of the Company
will be placed in escrow by the  Company  for the sole  purpose  of paying  such
obligations.

     IX. WAIVER.

     No waiver of any breach of any term or provision of this Agreement shall be
construed to be, nor shall be, a waiver of any other  breach of this  Agreement.
No waiver shall be binding unless in writing and signed by the party waiving the
breach.

     X. MODIFICATION.

     This  Agreement  may not be  amended  or  modified  other than by a written
agreement executed by the Executive and the Company.

     XI. SAVINGS CLAUSE.

     If any  provision  of this  Agreement  or the  application  thereof is held
invalid, the invalidity shall not affect other provisions or applications of the
Agreement  which  can  be  given  effect  without  the  invalid   provisions  or
applications and to this end the provisions of this Agreement are declared to be
severable.

     XII. COMPLETE AGREEMENT.

     This  instrument   constitutes  and  contains  the  entire   agreement  and
understanding  concerning  the  Executive's  employment  and the  other  subject
matters  addressed  herein between the parties,  and supersedes and replaces all
prior negotiations and all agreements proposed or otherwise,  whether written or
oral, concerning the subject matters hereof. This is an integrated document.

     XIII. GOVERNING LAW.

     This Agreement  shall be deemed to have been executed and delivered  within
the State of Oregon,  and the rights and  obligations  of the parties  hereunder
shall be construed and enforced in accordance with, and governed by, the laws of
the State of Oregon without regard to principles of conflict of laws.

     XIV. CONSTRUCTION.

     Each  party  has  cooperated  in  the  drafting  and  preparation  of  this
Agreement.  Hence, in any  construction  to be made of this Agreement,  the same
shall not be  construed  against  any party on the basis  that the party was the
drafter.  The captions of this Agreement are not part of the  provisions  hereof
and shall have no force or effect.

     XV. COMMUNICATIONS.

     All notices,  requests, demands and other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered or if mailed
by registered or certified mail, postage prepaid,  addressed to the Executive at
the Executive's  residence address on file with the Company, or addressed to the
Company at 2067  Commerce  Drive,  Medford,  OR 97504.  Any party may change the
address  at which  notice  shall be given by written  notice  given in the above
manner.

     XVI. EXECUTION.

     This Agreement is being executed in one or more counterparts, each of which
shall be deemed an original,  but all of which together shall constitute one and
the same instrument. Photographic copies of such signed counterparts may be used
in lieu of the originals for any purpose.

     XVII. LEGAL COUNSEL.

     The  Executive  and the Company  recognize  that this is a legally  binding
contract and acknowledge and agree that they have had the opportunity to consult
with legal counsel of their choice.

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


SRC VISION, INC.                                 WILLIAM J. YOUNG


By:  /s/ Alan R. Steel                           /s/ William J. Young
-----------------------------------              -------------------------------

Its Chief Financial Officer
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