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                                                                   EXHIBIT 10.25

       EMPLOYMENT AGREEMENT BETWEEN THE REGISTRANT AND MR. JAMES M. WALKER




                                                   ** PERSONAL & CONFIDENTIAL **


November 5, 1996

Mr. James M. Walker


RE:  Offer of Employment

Dear Jim:

On behalf of Diamond Multimedia Systems, Inc., a Delaware Corporation
("Diamond"), I am pleased to extend an agreement of employment to you on the
following terms:

         1.   Your employment starts immediately. Upon assuming your duties,
              your title will be Senior Vice President and Chief Financial
              Officer. You report directly to the Company's Chief Executive
              Officer.

         2.   Your base salary will be $20,834 monthly, payable in arrears in
              biweekly increments of $9,615.70 commencing upon the assumption of
              your duties as Chief Financial Officer. In addition, you will be
              entitled to a performance bonus targeted at fifty percent (50%) of
              earned base salary payable at least annually and subject to
              satisfaction of performance targets established by the Board of
              Directors and subject to final approval by the Compensation
              Committee. This bonus will be guaranteed for your first twelve
              months of employment. You are entitled to the Company's standard
              medical, life insurance and other employee benefits. Your
              compensation will be subject to annual adjustment at the
              discretion of the Board of Directors.

         3.   The Diamond Multimedia Board of Directors has granted you an
              option to purchase 225,000 shares of the Common Stock of Diamond
              at the fair market value* as determined on the date of grant,
              which is November 5, 1996. These options will be non-statutory
              stock options. The option shares will fully vest after thirty-six
              (36) months from the first day of the month following your date of
              hire: 75,000 shares will vest on December 1, 1997 and the
              remaining 150,000 will vest 6,250 per month commencing January 1,
              1998, in each case assuming your continuous employment by Diamond.

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* fair market value is defined as the closing price of the day prior to the date
of grant, which is November 4, 1996.


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Mr. James M. Walker
November 5, 1996 - Page 2


         4.   Additionally, the Diamond Multimedia Board of Directors has
              granted you an option to purchase 75,000 shares of the Common
              Stock of Diamond Multimedia at the fair market value* as
              determined on the date of the grant, which is November 5, 1996.
              These options will be registered via a filing on Form S-3 or Form
              S-8 and will be subject to a vesting date of December 1, 1997.
              Upon the assumption of your duties as Chief Financial Officer, the
              vesting of the options will be fully accelerated to December 1,
              1996.

         5.   You understand that your employment is "at will" and the vesting
              schedule of options does not guarantee employment for such a
              length of time or for any length of time. These options are
              subject to all the terms and conditions of the Company's stock
              option plan and compliance with all applicable laws.

Your employment with the Company is "at will" and may be terminated by you or
the Company at any time, for any reason or for no reason. By accepting this
offer of employment, you accept employment on such terms.

With this agreement, you agree to execute a proprietary information agreement in
the standard form utilized by the Company for its employees. This agreement
provides, inter alia, that you will not violate any proprietary information
agreement with any prior employer in the course of your employment with the
Company. A copy of such agreement is enclosed.

Jim, we look forward to working with you. If you have any questions, please call
me. Please indicate your acceptance by signing and returning to me a copy of
this letter.

Sincerely,

/s/ William J. Schroeder
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William J. Schroeder
President & Chief Executive Officer


So Agreed:

/s/  James M. Walker             11/8/96
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James Walker                      (Date)

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* fair market value is defined as the closing price of the day prior to the date
of grant, which is November 4, 1996.


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