<PAGE>
 
                                                                    EXHIBIT 10.8

                              EMPLOYMENT AGREEMENT
                              --------------------

      This EMPLOYMENT AGREEMENT (the "Agreement"), dated as of the 1st day
of August, 1996 is by and between Styles on Video, Inc., a California
corporation ("Employer"), and K. Eugene Shutler, an individual ("Employee").


                                  WITNESSETH:

      WHEREAS, in recognition of the valuable nature of Employee's financial
and management capabilities to the business of Employer, Employer desires to
enter into this Agreement with Employee to be effective as of the date above
first written (the "Effective Date"); and

      WHEREAS, Employee desires to enter into this Agreement with Employer
and to be employed by Employer in the capacity, for the period, and on the terms
and conditions set forth herein;

      NOW THEREFORE, for and in consideration of the mutual covenants,
agreements and conditions contained herein, the parties hereto intending to be
legally bound do hereby covenant and agree as follows:

      1.  EMPLOYMENT
          ----------

          (a) Employer hereby agrees to employ Employee, and Employee hereby
agrees to serve Employer, as Chief Executive Officer of Employer, and, subject
to the direction of the Board of Directors of Employer to perform such duties,
functions and responsibilities commensurate with and appropriate to such
position, and as the same may be from time to time set forth in the Bylaws of
Employer or otherwise delegated to Employee by the Board of Directors of
Employer.

          (b) Employee shall receive from Employer the necessary power and
authority to carry out and discharge such duties, functions and
responsibilities.

          (c) Employee shall be a full time employee of Employer and shall
devote his best efforts to the performance, discharge and fulfillment of all
such duties, functions and responsibilities.

          (d) Employee will perform his services in the greater Los Angeles
metropolitan area (including, without limitation,  Ventura County), or at such
other location as may be mutually agreed upon by Employee and the Board of
Directors of Employer.

          (e) Employee shall be appointed to the Board of Directors of Employer
and each of its subsidiaries (including majority-owned subsidiaries).
<PAGE>
 
      2.  TERM OF EMPLOYMENT
          ------------------

          (a) Employment of Employee hereunder shall be effective on the
Effective Date and shall, subject to earlier termination pursuant to Section 6
hereof, continue for a period of two (2) years thereafter, provided that this
Agreement shall renew automatically for successive one year periods, unless
during the thirty (30) day period commencing one hundred and twenty (120) days
prior to the applicable termination date, either the Employer or Employee
notifies the other in writing that this Agreement shall not be so extended.  The
period during which this Agreement shall be in effect, including any extensions,
is referred to as "Term."  The covenants and obligations of Employee pursuant to
Sections 7 and 8 hereof shall survive the expiration of this Agreement.

          (b) In the event of the termination of Employee's employment without
Cause (as defined below), Employer shall pay to Employee a termination benefit
equal to (i) 50% of the Annual Base Salary in effect as of the date of
termination (payable in accordance with Section 3(b) hereof), plus (ii) any
Incentive Bonus accrued and unpaid as of the date of such termination.  Employee
shall have no obligation to seek other employment, but the Employer's obligation
to pay the benefit described in clause (i) above shall be reduced dollar for
dollar to the extent of Employee's earnings from employment or self-employment
(not including investment income) during the six-month period following such
termination.  Upon any termination without Cause, all of the Warrants (as
defined below), shall become immediately fully vested and exercisable.

          (c) In the event of the termination of Employee's employment for
Cause, Employer shall pay to Employee the unpaid portion of the Annual Base
Salary through the effective date of termination and the Incentive Bonus, to the
extent it is accrued and unpaid as of such date.  On a termination for Cause,
further vesting of the Warrants shall cease, but such termination shall not
affect Warrants vested prior to such termination.

          (d) In the event the employment of Employee is terminated within six
months following a Change of Control (as hereinafter defined) other than a
voluntary termination by Employee in the absence of a breach of this Agreement
by Employer, the Employer shall pay to the Employee on the thirtieth (30th) day
following such termination a termination benefit equal to (i) the greater of
100% of the Annual Base Salary in effect as of the date of termination through
the end of the Term or, if the unexpired portion of the Term is less than twelve
(12) months, the Annual Base Salary for a full twelve (12) month period
regardless of the length of the unexpired Term, plus (ii) any Incentive Bonus
then accrued and unpaid.  The Employee agrees that his right to receive the
termination benefit described in this Section 2(d) shall be the sole and
exclusive remedy of Employee against the Employer or any successor in

                                      -2-
<PAGE>
 
respect of a termination by the Employer or any successor of Employee's
employment upon a Change of Control and the Employee hereby waives any and all
claims (other than for recovery of such termination benefit and pursuant to
stock options and warrants (including the Warrants) he may hold) against the
Employer or any successor arising from the termination of Employee's employment
upon a Change of Control.  For purposes of this Agreement, "Change of Control"
means (i) the transfer of more than fifty percent (50%) of the capital stock of
Employer (on a fully-diluted basis) (other than on exercise of outstanding
warrants) or all or substantially all of the Employer's assets; (ii) the merger
or consolidation of Employer or any of its subsidiaries with, any one or more
persons or entities other than subsidiaries of Employer; or (iii) the merger or
consolidation of Employer with Dycam, Inc. if immediately following such merger
or consolidation, Employee is not chief executive officer of the surviving
company.

      3.  COMPENSATION
          ------------

          (a) In consideration for all of the services to be rendered by
Employee to Employer, Employer shall pay Employee an annual base salary of Two
Hundred Thirty Thousand and No/100 Dollars ($230,000) (the "Annual Base Salary")
subject to increase from time to time in the sole discretion of Employer's Board
of Directors.

          (b) The Annual Base Salary shall be paid to Employee in periodic
installments throughout the year in accordance with Employer's normal and
customary pay policy for executive officers of Employer.

          (c) In addition to the Annual Base Salary, Employee shall be eligible
to receive a one time bonus (the "Incentive Bonus") of $50,000.  The Incentive
Bonus shall be deemed accrued if the unaudited accounts of the Employer reflect
a Cash-Flow Break Even for any three consecutive month period during the Term.
The Incentive Bonus shall be paid as promptly as practicable following its
accrual.  "Cash-Flow Break Even" shall mean a positive operating monthly cash
flow of the Employer determined in accordance with GAAP before interest expense
but after capital expenditures.  Employee shall also be eligible to receive
discretionary bonuses in the sole discretion of Employer's Board of Directors.

          (d) The amount of the Annual Base Salary and any other cash amounts
payable pursuant to this Agreement are gross amounts due by Employer to Employee
hereunder, and Employer shall have the right to deduct therefrom all taxes and
other amounts which may be required to be deducted or withheld by law
(including, but not limited to, federal income tax withholding and social
security payments), whether such law is now in effect or becomes effective after
the date of this Agreement.

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<PAGE>
 
          (e) Concurrently herewith, Employer and Employee have entered into a
Warrant Agreement in the form of Exhibit A hereto pursuant to which the Employer
has granted Employee warrants (the "Warrants") to purchase an aggregate of
4,071,684 shares of the Employer's common stock constituting 5% of the
Employee's common stock on a fully-diluted basis, taking into account all
outstanding shares, warrants and options and options issuable under the
Employer's stock option plan and have entered into an amendment, in the form of
Exhibit "B" hereto, to the Registration Rights Agreement dated as of May 15,
1996 between Employer and Employee.

      4.  EMPLOYEE BENEFITS AND BUSINESS EXPENSES.
          --------------------------------------- 

          (a) During the term hereof, Employee shall be entitled to participate
in such employee benefit plans and programs maintained by the Employer for the
benefit of its executive officers and to participate in applicable new or
amended programs, including, but not limited to, medical, dental, health, life,
accident and disability insurance programs, savings for retirement plans, bonus,
stock option plans, and any other incentive compensation plans, provided that
the Employer is not obligated to provide any particular plan or program and may
adopt, terminate or modify any such plan or program in its sole discretion.

          (b) Employee shall be reimbursed $27,500 in non-accountable moving
expenses in connection with his re-location to Ventura County, California or its
environs.

          (c) Employee shall be reimbursed for any necessary business expenses
reasonably incurred by Employee in carrying out Employee's duties, functions and
responsibilities hereunder, subject to providing the Employer with reasonable
documentation in support thereof.

      5.  VACATION AND SICK LEAVE TIME
          ----------------------------

          Employee shall be entitled to four (4) weeks vacation annually,
commencing on his first day of employment hereunder, which shall be taken at
such time or times as are approved by the Chairman of the Board of Directors (if
other than Employee), or if Employee is acting as Chairman, by the Chairman of
the Audit Committee or the full Board of Directors.  Employee shall also be
entitled to such holiday and sick leave time pursuant to the plan or policy
currently in effect, or as hereafter may be amended, available for other
executive officers of Employer.  Vacation time shall not carry over from year to
year in excess of one week per year.

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<PAGE>
 
      6.  TERMINATION OF EMPLOYMENT
          -------------------------

          (a) Death or Disability.  The Term shall terminate automatically upon
              -------------------                                              
Employee's death.  If, in the good faith opinion of the Board of Directors
(excluding Employee), Employee shall be prevented from performing his duties and
responsibilities hereunder as a result of physical or mental illness, injury or
other incapacity for a period of ninety (90) days in the aggregate in any
twelve-month ("Disability"), then, to the extent permitted by law, the Employer
may, at the election and in the sole discretion of the Board of Directors
(excluding Employee), terminate the Term effective upon the date specified for
such termination in written notice thereof delivered to Employee.  In the event
that Employee shall dispute the determination of the Board of Directors as to
the Disability of Employee, Employee may appeal the determination to a panel of
three doctors, one to be selected by Employee, one to be selected by the Board
of Directors (excluding Employee) and one to be selected by the doctors chose by
Employee and the Board of Directors.  The decision of the panel of doctors shall
be final.  Any termination for Disability under this Agreement shall not affect
the rights, if any, that Employee may otherwise have under any disability plan
the Company may have in effect at the date of such termination and in which
Employee is then participating.

          (b) Cause.  Employer may, at the election and in the sole discretion
              -----                                                           
of the Board of Directors (excluding Employee), terminate the Term for "Cause"
effective on the date specified for termination in written notice thereof
delivered to Employee.  For purposes of this Agreement, "Cause" shall mean that,
in the good faith judgment of the Board of Directors (excluding Employee), one
or more of the following events shall have occurred:  (i) Employee's habitual or
willful neglect of any of his material duties, responsibilities or obligations
hereunder provided that such neglect shall continue for ten days following
written notice to Employee; (ii) Employee's refusal to follow reasonable and
lawful directions of the Board of Directors provided that such refusal shall
continue for ten days following written notice to Employee; (iii) Employee's
conviction of, or pleading of nolo contendere to, (x) any felony of any type or
                              ---- ----------                                  
(y) any misdemeanor involving acts of moral turpitude or financial wrongdoing,
including without limitation, bribery, fraud, securities laws violations or
embezzlement or any other acts which could result in material damage to
Employer's reputation or otherwise have a material adverse effect on Employer;
and (v) Employee's breach of any confidentiality, nondisclosure, noncompetition,
or other agreement as may be entered into by Employee from time to time in
connection with Employee's employment.

          7.  COVENANT NOT TO COMPETE.  Employee covenants and agrees that
              -----------------------                                     
Employee will not during the Term, directly or indirectly in

                                      -5-
<PAGE>
 
the United States of America or Canada, as a principal, partner, agent,
consultant or otherwise of any person, partnership, corporation or other entity,
engage in or be financially interested in any business or group of affiliated or
unaffiliated businesses (other than Employer) that engages in any business which
is in competition with any material line or business in which the Employer or
its affiliates then currently engages or which the Employer or its affiliates
are then currently developing.  This Section 7 shall not prohibit Employee from
investing in less than three percent (3%) of any class of equity security of a
company that has a class of equity security registered pursuant to Section 12(b)
of the Securities Exchange Act of 1934, so long as Employer is not actively
involved in any capacity with the operation or management of such business.

     8.   CONFIDENTIALITY, PROPRIETARY INFORMATION AND TRADE SECRETS.
          ---------------------------------------------------------- 

          (a) During the Term and at all times thereafter, Employee shall not
use for his personal benefit, or disclose, communicate or divulge to, or use for
the direct or indirect benefit of any person, firm, association or company other
than Employer, any material referred to in subsections (f) and (g) of this
Section 8, or any proprietary information regarding the business methods,
business policies, procedures, techniques, research or development projects or
results, trade secrets or other knowledge or processes of, or developed by,
Employer or any names and addresses of customers or clients or any data on or
relating to past, present or prospective customers or clients or any other
confidential information relating to or dealing with the business operations or
activities of Employer, made known to Employee or learned or acquired by
Employee while employed by Employer.

          (b) During the Term of this Agreement and for a period of two (2)
years after the termination of this Agreement, Employee shall not, directly or
indirectly, in any geographic area served by Employer or its affiliates induce
or attempt to influence any employee of Employer or its affiliates to terminate
his or her employment with Employer or its affiliates or to hire any such
employee of Employer or its affiliates.

          (c) Employee acknowledges and agrees that the restrictions contained
in Section 7 hereof and in subsections (a) and (b) of this Section 8 (the
"Restrictions"), in view of the nature of the business in which Employer is
engaged, are reasonable and necessary in order to protect the legitimate
business interests of Employer, and Employee therefore further acknowledges and
agrees that, in the event Employee violates, or threatens to violate, any of
such Restrictions, Employer shall be entitled to obtain from any court of
competent jurisdiction, without the posting of any bond or other security,
preliminary and permanent injunctive or equitable relief as well as damages

                                      -6-
<PAGE>
 
and an equitable accounting of all earnings, profits and other benefits arising
from such violation, which rights shall be cumulative and in addition to any
other rights or remedies at law or in equity to which Employer may be entitled.

          (d) If any Restriction, or any part thereof, is determined in any
judicial or administrative proceeding to be invalid or unenforceable by reason
of duration, geographical scope, or otherwise, the intention of the parties is
that the Court or administrative officer reduce such Restriction to those which
it deems to be valid and enforceable and that the remainder of the Restrictions
shall not thereby be affected and shall be given full effect, without regard to
the invalid or unenforceable provisions.

          (e) If Employee violates any of the Restrictions, the restrictive
period shall not run in favor of Employee from the time of the commencement of
any such violation until such time as such violation shall be cured by Employee
to the satisfaction of Employer.

          (f) It is recognized that Employee will have access to certain
confidential information of Employer and its affiliates, and that such
information constitutes valuable, special and unique property of Employer and
its affiliates.  Employee shall not at any time during the term of this
Agreement disclose any such confidential information to any party for any reason
or purpose except as may be made in the normal cause of business of Employer and
for its benefit.

          (g) All advertising, sales, and other materials including, without
limitation, customer sales analyses, invoices, or any other materials, designs
or data of any kind furnished to Employee by Employer or developed by Employee
on behalf of Employer or at Employer's direction or for Employer's use or
otherwise in connection with Employee's employment hereunder, are and shall
remain the sole, exclusive and confidential property of Employer.  In the event
that Employer requests the return of such materials at any time during, upon or
after the termination of Employee's employment, Employee shall immediately
deliver the same, and any and all copies thereof, to Employer.

     9.   Successors.
          ---------- 

          (a) This Agreement shall inure to the benefit of and be binding upon
Employer and Employee.  This Agreement and the benefits and obligations of
Employer hereunder may be assigned by Employer to any person acquiring all or
substantially all of the assets or all of the issued and outstanding equity
securities of Employer.

          (b) This Agreement shall inure to the benefit of and be binding upon
Employee and Employee's executors,

                                      -7-
<PAGE>
 
administrators, trustees, heirs and legal representatives.  Because Employee's
duties, functions, responsibilities, and services hereunder are special,
personal and unique in nature, Employee shall not transfer, sell or assign, by
operation of law or otherwise, Employee's obligations under this Agreement.

     10.  Waivers.  Neither the failure nor any delay on the part of either
          -------                                                          
party hereto to exercise any right, remedy, power or privilege (collectively,
"Right") under this Agreement shall operate as a waiver, abandonment or release
thereof, nor shall any single or partial exercise of any Right preclude any
other or further exercise of the same or of any other Right, nor shall any
waiver of any Right with respect to any occurrence by construed as a waiver of
such Right with respect to any other occurrence.

     11.  Severability.  If any provision of this Agreement shall be held to be
          ------------                                                         
invalid or unenforceable, such invalidity or unenforceability shall not affect
or impair the validity or enforceability of the remaining provisions of this
Agreement, which provisions shall remain in full force and effect, and the
parties hereto shall continue to be bound thereby.

     12.  Entire Agreement.  This Agreement contains the entire agreement
          ----------------                                               
between the parties relating to the subject matter hereof and supersedes all
previous agreements and understandings between the parties, whether written or
oral, with respect to the subject matter hereof, including without limitation
that certain Consulting Agreement dated as of April 19, 1996; provided, however,
that 137,500 warrants granted pursuant to such Consulting Agreement are vested
and not included in the Warrants.  This Agreement shall not be modified, altered
or amended except by a writing executed by both parties.  Employee acknowledges
and agrees that no such agreement will be effective unless it is approved by
formal resolution of the Board of Directors of Employer.

     13.  Notices.  Any notice or other communication provided for in this
          -------                                                         
Agreement or contemplated hereby shall be sufficiently given if given in writing
and delivered personally or by certified mail, return receipt requested, and
addressed, in the case of the Employer, to the Employer at:

                    Styles on Video, Inc.
                    667 Rancho Conejo Blvd.
                    Newbury Park, CA  91320

and in case of Employee, to him at:

                    K. Eugene Shutler
                    667 Rancho Conejo Blvd.
                    Newbury Park, CA  91320

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<PAGE>
 
Notice shall be effective when so delivered personally or, if mailed, three days
after deposit thereof with postage prepaid in the U.S. mail.  Either party may
designate a different address by giving notice of change of address in the
manner provided above.

     14.  Arbitration.  Any disputes under this Agreement shall be resolved by
          -----------                                                         
binding arbitration in Los Angeles, California in accordance with the rules and
procedures of the American Arbitration Association as then in effect provided
that neither party shall be precluded from obtaining provisional relief in any
court of competent jurisdiction.  In any such dispute, the arbitrators or court
may award the prevailing party its reasonable fees and costs incurred in
connection therewith.

     15.  Construction of Agreement.  This Agreement shall be governed by,
          -------------------------                                       
construed and enforced in accordance with the laws of the State of California.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the day and year above first written.

                         STYLES ON VIDEO, INC.,
                         a Delaware corporation



                         By:  
                              -----------------------------------------------
                              Name:
                              Title:



                              -----------------------------------------------
                              K. Eugene Shutler

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