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EXHIBIT 10.2

January 9, 2003

Michael Shahbazian
1292 Estate Drive
Los Altos, CA 94024

Dear Michael,

Congratulations on accepting a position with Niku Corporation (the Company)
as Senior Vice President and Chief Financial Officer reporting directly to me,
Josh Pickus, commencing on 01-20-03. You will receive an annual salary of
$225,000, less applicable withholding in accordance with our normal payroll
procedures. You will have an annual bonus potential of $50,000 based on
individual milestones to be agreed upon between you and the Company.
Furthermore, you are eligible to receive certain employee benefits, which will
be outlined in the Companys Benefit Brochure. Like all employees, you will be
entitled to vacation time and paid company holidays each year.

In connection with the commencement of your employment, the Company will
recommend that its Board of Directors grant you an option to purchase 120,000
shares (post split) of the Companys Common Stock with an exercise price equal
to the fair market value on the date of the grant. The option will vest at the
rate of 1/4th after one year and 1/48th per month thereafter (so that the
option is fully vested after four years). Vesting will, of course, depend on
your continued employment with the Company. The option will be a non-qualified
stock option to the maximum extent allowed by the tax code and will be subject
to the terms of the Companys 2001 Equity Incentive Plan and the Stock Option
Agreement between you and the Company. The option will accelerate and become
fully vested upon a change in control of the Company.

In addition, we have agreed that we will develop an Executive Bonus Program
based on Company performance and that we will target a payoff for you under
that plan at 50% of your base salary upon full achievement of Company
objectives.
We have also agreed that we will jointly develop and present to the
Compensation Committee a proposal relating to executive severance arrangements.
Both of these proposals will, of course, be subject to the approval of the
Compensation Committee.

Your employment is at-will and for no specified period, and either you or the
Company may terminate this employment relationship at anytime and for any
reason. As an employee, you will be expected to abide by the Companys
policies and to devote all of your business time, skill, attention and best
efforts to Company business so as to fulfill the responsibilities assigned to
you. Your acceptance of this offer and commencement of employment with the
Company is contingent upon the execution and delivery of the Companys
Confidential Information and Invention Assignment Agreement (the
Confidentiality Agreement), a copy of which is enclosed for your review and
execution. For purposes of federal immigration law, you will be required to
provide to the Company documentary evidence of your identity and eligibility
for employment in the United States. Such documentation must be provided
within three (3) business days of your date of hire, or our employment
relationship with you may be terminated.

You agree to follow the Companys strict policy that employees must not
disclose, either directly or indirectly, any information, including any of the
terms of this agreement, regarding salary, bonuses, or stock option allocations
to any person, including other employees of the Company; provided, however,
that you may discuss such terms with members of your immediate family and any legal, tax or accounting specialists
who provide you with individual legal, tax or accounting advice.





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This employment offer will expire if not accepted by Friday, January 10th,
2003. To accept the offer before this expiration date, you must sign and date
this letter in the space provided below and return it to me, along with a
signed and dated copy of the Confidentiality Agreement. This letter, together
with the Confidentiality Agreement, sets forth the terms of your employment
with the Company and supersedes any prior representations or agreements,
whether written or oral. This letter may not be modified or amended except by
a written agreement, signed by the Company and by you.

Sincerely,

Niku Corporation,

|                        |                  
|----------------------- | -----------------
|BY:                     | /s/ Joshua Pickus
|
|Josh Pickus            
|Chief Executive Officer

AGREED AND ACCEPTED:

Michael Shahbazian

/s/ Michael Shahbazian

Signature

1/10/2003

Date

enclosure: Confidential Information and Invention Assignment