EXHIBIT 10.3




                                 AMENDMENT NO. 3
                             TO EMPLOYMENT AGREEMENT

     THIS AMENDMENT NO. 3 TO EMPLOYMENT  AGREEMENT (the "Amendment") is made and
entered into at Santa Barbara,  California, on the date hereinafter set forth by
and between DANIEL R. DOIRON, PH.D.  (hereinafter referred to as the "Employee")
and PDT SYSTEMS, INC., a California Corporation  (hereinafter referred to as the
"Employer").

WHEREAS:

     A. The Employer and the  Employee  are parties to an  Employment  Agreement
effective  as of  AUGUST  1,  1992,  and  Amendments  No. 1 and 2  thereto  (the
"Employment Agreement").

     B. The parties  hereto wish to amend the  Employment  Agreement  in certain
respects.

     NOW,   THEREFORE,   in   consideration   of  the  premises,   promises  and
representations hereinafter contained, it is agreed as follows:

     1. Effective  DECEMBER 9, 1996, the expiration  dates of the Options listed
on Exhibit B attached  hereto are  amended to be ten (10) years from the date of
grant, or upon termination of employment, which ever occurs first.

     2. Effective JANUARY 1, 1997, the section entitled EMPLOYEE COMPENSATION on
Exhibit A to the Employment Agreement is hereby amended to read as follows:
     
     EMPLOYEE COMPENSATION

     ONE HUNDRED FIFTY EIGHT THOUSAND FOUR HUNDRED DOLLARS ($158,400) PER ANNUM.

     3. In all other  respects,  the  Employment  Agreement is hereby  ratified,
confirmed and approved in its entirety.






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     IN WITNESS WHEREOF, the parties hereto have executed this Amendment on this
10th day of January, 1997.

                                  EMPLOYER:
                                  PDT SYSTEMS, INC.
                                  a California Corporation

                                  By: /S/ GARY S. KLEDZIK, PH.D.
                                  ------------------------------
                                  Gary S. Kledzik, Ph.D.
                                  Chairman


                                  EMPLOYEE:
                                  /S/ DANIEL R. DOIRON, PH.D.
                                  ---------------------------
                                  Daniel R. Doiron, Ph.D.