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                                                                   EXHIBIT 10.16

                              EMPLOYMENT AGREEMENT



        This Employment Agreement is made and entered into by and between
SpatiaLight, Inc. a New York Corporation (the "Company") and Fred R. Hammett
("Hammett") as of December 31, 1999 (the "Effective Date").


1.      POSITION AND DUTIES:

        1.1    The Company has employed Hammett in the position of President
               since July 1, 1998. In this position, Hammett has and will
               continue to report to the Company's Chief Executive Officer.

        1.2    Hammett agrees to devote his time, energy and skill to his duties
               at the Company. These duties shall be commensurate and consistent
               with that of the President as well as any other duties that may
               be assigned to Hammett from time to time. The Company and Hammett
               acknowledge that Hammett will be devoting some of his time to
               Chronomotion Imaging Applications, Inc. ("Chronomotion").


2.      COMPENSATION:

        2.1    Base Salary: Hammett will be paid an annual salary of $210,000,
               less applicable withholding, in accordance with the Company's
               normal payroll procedures. Hammett's salary will be reviewed by
               the Board of Directors (the "Board") on approximately an annual
               basis, and is subject to an increase adjustment based upon
               various factors including, but not limited to Hammett's
               performance and the Company's profitability.

        2.2    Signing Bonus: Immediately upon execution of this Agreement, the
               Company shall provide Hammett with a signing bonus in the amount
               of Fifteen Thousand Dollars ($15,000.00) (the "Signing Bonus").

        2.3    Performance Bonus Plan: Hammett will be eligible to participate
               in the Company's performance bonus plan (the "Bonus Plan"), and
               this bonus will be governed by the terms of the Company's
               standard Bonus Plan in effect at the time. Any executive bonus
               plan shall be at the discretion of the compensation committee.

        2.4    Equity Stake: The Board has approved the issuance to Hammett of
               an option to purchase a total of 250,000 shares of the Company's
               common stock (the "Options") in accordance with Company's Stock
               Option Plan



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               (the "Plan"). The Plan provides that fifty (50) percent of the
               options vest on May 8, 1999 and the remaining fifty (50) percent
               of the options vest on May 7, 2000. Upon the execution of this
               Agreement the Options shall be amended to provide that in the
               event of a Change of Control of the Company, all of the options
               issued pursuant to the Options shall become fully vested as of
               the date of the Change of Control. In the event of Hammett's
               death all Options shall become fully vested as of that date, and
               ownership shall be held by Hammett's beneficiary. On December
               31, 1999 the Board granted an additional 250,000 options which
               will vest over a 3-year period based upon performance milestones
               set and agreed upon by the Compensation Committee of the Board
               and Hammett.

        2.5    Additional Provisions. The Options shall be amended to contain,
               the following additional provisions: (i) in the event of a Change
               of Control (as defined below) of the Company, all of the unvested
               shares shall become vested immediately prior to the Change in
               Control. For purposes of this Agreement, a "Change of Control"
               shall mean an "Ownership Change Event" (as defined below) or a
               series of related Ownership Change Events (collectively, the
               "Transaction") wherein the stockholders of the Company
               immediately before the Transaction do not retain immediately
               after the Transaction direct or indirect beneficial ownership of
               more than fifty percent (50%) of the total combined voting power
               of the outstanding voting stock of the Company or the corporation
               or corporations to which the assets of the Company were
               transferred (the "Transferee Corporation(s)"), as the case may
               be. For purposes of the preceding sentence, indirect beneficial
               ownership shall include, without limitation, an interest
               resulting from ownership of the voting stock of one or more
               corporations which, as a result of the Transaction, own the
               Company or the Transferee Corporation(s), as the case may be,
               either directly or through one or more subsidiary corporations.
               The Board shall have the right to determine whether multiple
               sales or exchanges of the voting stock of the Company or multiple
               Ownership Change Events are related, and its determination shall
               be final, binding and conclusive.

               For purpose of this Agreement, an "Ownership Change Event" shall
               be deemed to have occurred if any of the following occurs with
               respect to the Company:

                      (a) The direct, indirect sale, exchange, merger or
               consolidation in a single or series of related transactions by
               the stockholders of the Company of more than fifty percent (50%)
               of the voting stock of the Company;

                      (b) The sale, exchange, or transfer of all or
               substantially all of the assets of the Company; or



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                      (c)    A liquidation or dissolution of the Company.

        2.6    Benefits: Hammett will be entitled to participate in all of the
               Company's benefit plans, as those plans may change from time to
               time, on the same terms as all other employees of the Company.

        2.7    Vacation: Hammett is granted four (4) weeks of paid vacation
               yearly.

        2.8    Life Insurance: The Company will obtain insurance for Hammett in
               the amount of three (3) times his annual salary with proceeds
               going to his beneficiary in the event of his death.

        2.9    Relocation Expenses: The Company acknowledges that it has
               reimbursed Hammett for the reasonable expenses associated with
               the relocation of his home to the San Francisco Bay Area. These
               relocation expenses included but were not limited to the
               following:

               (i)     the costs associated with packing and moving Hammett's
                       personal belongings to the Bay Area;

               (ii)    the non-recurring closing costs associated with each of
                       the sale of Hammett's current home in Carlsbad and the
                       purchase of a home in the Bay Area (including real
                       estate commission on the sale of Hammett's home in
                       Carlsbad and "points", provided that no payment for
                       "points" were used to reduce Hammett's mortgage
                       principal), and

               (iii)   Two house hunting trips for Hammett and his spouse
                       including expenses for meals and lodging, not to exceed
                       $1,000.00.

3.      TERMINATION

        3.1    Terms: Hammett's employment with the Company pursuant to this
               Agreement is subject to the provisions regarding termination set
               forth in Sections 3.2 and 3.3 and may be terminated by Hammett or
               the Company at any time. In the event that either party elects to
               terminate this Agreement benefits shall be provided as set forth
               in Sections 3.2 and 3.3.

        3.2    Voluntary Termination: In the event Hammett voluntarily resigns
               from his employment with the Company, Hammett shall be entitled
               to no compensation or benefits from the Company other than those
               earned under paragraph 2 above, through the date of this
               termination.

        3.3    Involuntary Termination: In the event of the termination of
               Hammett's employment by the Company for the reasons set forth
               below, Hammett shall be entitled to the following:



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               a.     Termination for Cause: If Hammett's employment is
                      terminated by the Company for cause as defined below,
                      Hammett shall be entitled to no compensation or benefits
                      from the Company other than those earned under paragraph
                      2, through the date of Hammett's termination.

               For the purposes of this Agreement, a termination "for cause"
               occurs if Hammett's' employment is terminated for any of the
               following reasons:

                      (1)     theft, dishonesty, or falsification of any
                              employment or Company records;

                      (2)     conviction of a felony or any act involving
                              moral turpitude;

                      (3)     consistent poor performance, as determined by
                              the Board;

                      (4)     improper disclosure of the Company's
                              confidential or proprietary information;

                      (5)     any intentional act by Hammett that has a
                              material detrimental effect on the Company's
                              reputation or business;

                      (6)     Any material breach of this Agreement, which
                              breach, if curable, is not cured within thirty
                              (30) days following written notice of such
                              breach from the Company.

               b.     Termination for Other Than Cause: If Hammett's employment
                      is terminated by the Company for any reason other than
                      cause, Hammett shall be entitled to continuation of
                      Hammett's salary and all other benefits, including, but
                      not limited to, vesting in all stock options, for
                      nine-months following the termination of Hammett's
                      employment.


4. TERM OF EMPLOYMENT: Hammett's employment by the Company as set forth herein
shall commence on the date of this agreement and shall continue thereafter for a
period of 1 year unless and otherwise terminated pursuant to provisions of
Section 3 above. Notwithstanding the foregoing, the term shall be automatically
renewed upon the same terms and conditions contained herein, for consecutive
periods of one year each upon expiration of the immediately preceding term
unless and until either party elects not to so renew this agreement by
delivering written notice to the other party not less than 30 days prior to the
end of the term. In the event of a "Change of Control" of the Company, outlined
in Sections 2.4 and 2.5, the terms of this Employment Agreement shall remain in
effect.


5. CONFIDENTIAL AND PROPRIETARY INFORMATION: As a condition of Hammett's
employment with the Company, Hammett has signed the Company's proprietary
information and assignment of inventions agreement and Hammett has and agrees to
continue to comply with the terms of that agreement.



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6. DISPUTE RESOLUTION: In the event of any dispute or claim relating to or
arising out of this Agreement (including, but not limited to, any claims of
breach of contract, wrongful termination or age, sex, race or other
discrimination), Hammett and the Company agree that all such disputes shall be
fully and finally resolved by binding arbitration conducted by the American
Arbitration Association in San Francisco, California in accordance with its
National Employment Dispute Resolution rules, as those rules are currently in
effect (and not as they may be modified in the future). Hammett acknowledges by
accepting this arbitration provision he is waiving any right to a jury trial in
the event of such a dispute. Provided, however, that this arbitration provision
shall not apply to any disputes or claims relating to or arising out of the
misuse or misappropriation of trade secrets or proprietary information.


7. ATTORNEYS' FEES: The prevailing party shall be entitled to recover from the
losing party it's attorney's fees and costs incurred in any action brought to
enforce any right arising out of this Agreement.


8. INTERPRETATION: This Agreement shall be interpreted in accordance with and
governed by the laws of the State of California.


9. ASSIGNMENTS: In view of the personal nature of the services to be performed
Under this Agreement by Hammett, Hammett shall not have the right to assign or
transfer any of his obligations under this Agreement.


10. ENTIRE AGREEMENT: This Agreement, along with any agreements referred to in
paragraph 2, relating to stock options, and paragraph 5, relating to proprietary
information and assignment of inventions, sets forth the entire agreement
between Hammett and the Company regarding the terms and conditions of Hammett's
employment, and supersedes all prior negotiations, representations or agreements
between Hammett and the Company regarding Hammett's employment, whether written
or oral.

11. REPRESENTATIONS: Hammett acknowledges that he is not relying, and has not
relied, on any promise, representation or statement made by or on behalf of the
Company that is not set forth in this Agreement.


12. MODIFICATION: This Agreement may only be modified or amended by a
supplemental written agreement signed by Hammett and an authorized member of the
Board.



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        IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year written below.


                                            SPATIALIGHT, INC.

By: /s/ FRED R. HAMMETT                     By: /s/ ROBERT OLINS
   --------------------------------            ---------------------------------
       Fred R. Hammett                             Robert Olins, Director

                                            By: /s/ STEVEN TRIPP
                                               ---------------------------------
                                                   Steven Tripp, Director