Exhibit 10.3

                                 AMENDMENT NO. 1

                                       TO

                              EMPLOYMENT AGREEMENT

     This AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT  ("Amendment") is entered into
as of January 1, 2000, by and between Jamie A. Wade ("Employee") and Engineering
Animation, Inc., a Delaware corporation (the "Company").

         WHEREAS, the parties entered into an employment  agreement  (Employment
Agreement) as of January 1, 1996,  whereby  Employee was employed by the Company
as its Vice President of  Administration  and General  Counsel for an Employment
Term (as such term is defined in the Employment  Agreement)  ending December 31,
1999;

         WHEREAS,  the  parties  desire  to extend  the  Employment  Term  until
December 31, 2003,  with Employee  serving in the capacity of Vice  President of
Administration, General Counsel and Secretary of the Company;

         NOW,  THEREFORE,  for good and valuable  consideration,  including  the
benefits  under  the  Severance  Agreement  (as  such  term  is  defined  in the
Employment  Agreement),   the  receipt  and  sufficiency  of  which  are  hereby
acknowledged, the parties hereto agree as follows:

         1. Section 1 of the Employment Agreement is amended to read as follows:
"Employment  Terms.  Subject  to the terms  and  conditions  set  forth  herein,
including  Section 13, the Company will employ Employee for a term commencing as
of January 1, 1996 (the  "Effective  Date") and ending on  December  31, 2003 or
such earlier  date as may occur  pursuant to Section 13 of this  Agreement  (the
"Employment Term")."

         2. The first  sentence  of  Section 2 of the  Employment  Agreement  is
amended as follows:  "Employment  Duties.  From  January 1, 2000 until  December
31,2003,  Employee will serve as the Vice President of  Administration,  General
Counsel and Secretary of the Company,  and shall perform such duties as shall be
assigned from time to time by the Board of Directors of the Company,  subject to
the  terms of this  Agreement  and the  direction  and  control  of the Board of
Directors of the Company."

         3.  Subsection (a) of Section 3 of the Employment  Agreement is amended
as follows:  "(a) from the Effective  Date until  December 31, 2003, a salary as
established  by the  compensation  committee  of the Board of  Directors  of the
Company,  payable in arrears not less frequently than monthly,  but otherwise in
accordance with the Company's ordinary payroll practices; and".

         4. All other terms and  conditions of the  Employment  Agreement  shall
remain unchanged.  Capitalized terms used herein and not otherwise defined shall
have the meaning ascribed to them in the Employment Agreement. In the event of a
dispute  between the terms of this Amendment and the Employment  Agreement,  the
terms of this Amendment shall control.

         IN WITNESS  WHEREOF,  the parties have executed  this  Amendment on the
date first written above.

ENGINEERING ANIMATION, INC.                 Employee:


By: /s/ Matthew Rizai                       /s/ Jamie A. Wade
    ---------------------------                 -------------------
Name:  Matthew M. Rizai                         Jamie A. Wade
Its:   Chariman and
       Chief Executive Officer