<PAGE>   1

                                  EXHIBIT 10.3

                               FIRST AMENDMENT TO
                      EMPLOYMENT AND STOCK OPTION AGREEMENT


         THIS FIRST AMENDMENT TO EMPLOYMENT AND STOCK OPTION AGREEMENT (the
"Amendment") is entered into this 22nd day of October, 1997, between AMPACE
CORPORATION, a Delaware corporation (the "Company") and David C.
Freeman (the "Executive").

                                                    WITNESSETH:

         WHEREAS, the parties hereto have previously entered into an Employment
and Stock Option Agreement dated February 16, 1995 (the "Agreement"); and

         WHEREAS, the parties desire to amend the Agreement as provided herein;

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth below, it is hereby covenanted and agreed by the Company and the
Executive as follows:

         1. Section 5(b) of the Agreement is hereby deleted in its entirety and
replaced with the following paragraph:

                  (b) The Option Price shall be $1.41 per share; provided,
                  however that in case the Company should at any time subdivide
                  the outstanding shares of Common Stock, or shall issue a stock
                  dividend on its outstanding Common Stock, the Option Price
                  shall be proportionately decreased, and in the case the
                  Company shall at any time combine the outstanding shares of
                  Common Stock, the Option Price in effect immediately prior to
                  such combination shall be proportionately increased, effective
                  at the close of business on the date of such subdivision,
                  dividend or combination, as the case may be.

         2. The text of Section 5(d) of the Agreement following subsection (v)
of said Section is hereby deleted in its entirety and replaced with the
following:

                  Upon the occurrence of any event described above (a "Change of
                  Control"), (i) the Company shall provide the Executive written
                  notice of such Change of Control and (ii) the Option shall
                  automatically accelerate and become fully exercisable.
<PAGE>   2

                  In addition, upon a Change of Control described in Section
                  5(d)(i), the portion of the Option that is not exercised shall
                  be assumed by, or replaced with comparable options by, the
                  surviving corporation. Any replacement options shall entitle
                  the Executive to receive the same amount and type of
                  securities as the Executive would have received as a result of
                  the Change of Control had the Executive exercised the Options
                  immediately prior to the Change of Control.

         3. Section 11 of the Agreement is hereby deleted in its entirety and
replaced with the following paragraph:

                  If this Agreement is terminated for any reason, other than
                  "Cause," the Executive will be entitled to receive an amount
                  equal to 2.5 times the total amount of salary and bonus
                  compensation paid to Executive during the year prior to
                  termination ("Severance Pay"). For purposes of this paragraph,
                  "Cause" shall mean (i) the commission of a felony or a crime
                  involving moral turpitude or the commission of any other act
                  involving dishonesty, disloyalty or fraud with respect to the
                  Company or any of its subsidiaries, (ii) conduct tending to
                  bring the Company or any of its subsidiaries into substantial
                  public disgrace or disrepute, (iii) willful disregard of
                  significant management responsibilities directed by the Board,
                  (iv) gross negligence or willful misconduct with respect to
                  the Company or any of its subsidiaries or (v) any other
                  material breach of this Agreement that is not cured within 15
                  days after written notice thereof to the Executive.

         4. The remaining provisions of the Agreement which have not been
modified by this Amendment shall remain in full force and effect as if set forth
herein.

         IN WITNESS WHEREOF, the Executive has hereunto set his hand and the
Company has caused these presents to be executed in its name and on its behalf,
all as of the day and year first above written.

                                              AMPACE CORPORATION

                                              By: /s/ Jay N. Taylor
                                                  ----------------------------
                                              Title:  President


                                              /s/ David C. Freeman
                                              ---------------------------------
                                              David C. Freeman


                                       2