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                                                                   EXHIBIT 10.3


                              EMPLOYMENT AGREEMENT

         This Employment Agreement is made and entered into effective as of
July 1, 2001 by and between Internet Pictures Corporation, a Delaware
corporation having an office at 3160 Crow Canyon, Fourth Floor, San Ramon,
California 94583, and the individual named in Exhibit A ("Executive").

         WHEREAS, the Company wishes to employ Executive with the title in
Exhibit A and upon the terms and conditions hereinafter set forth, and
Executive desires to serve in such capacities upon the terms and conditions
hereinafter set forth.

         NOW THEREFORE, in consideration of the premises and of the mutual
covenants and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Company and Executive hereby agree as follows:

         1.       Term. Executive's employment under this Agreement shall
commence on the Effective Date set forth in Exhibit A and shall continue
indefinitely as set forth herein until termination of Executive's employment as
provided in Section 6 hereof. If Executive's employment is terminated pursuant
to Section 6 hereof, the Term of Employment shall expire as of the Termination
Date (as defined in Section 6 hereof).

         2.       Duties and Activities. During the Term of Employment,
Executive will faithfully perform those duties and responsibilities
commensurate with the position set forth in Exhibit A. Executive shall
participate and perform such other responsibilities and duties as may be
reasonably determined in the future by the Company's Chief Executive Officer
("CEO") or other officer designated in Exhibit A as Executive's Direct
Supervisor. Executive will devote Executive's entire business time, attention
and energy and use best efforts to advance the business and welfare of the
Company in furtherance of the policies established by the CEO. Executive shall
report to officers on the Senior Executive level (Senior Vice President,
Executive Vice President, President, CEO) as the CEO may determine. Executive
shall not engage in any other employment activities for any direct of indirect
remuneration, except that Executive may continue to devote reasonable time to
the management of personal investments, participation in community and
charitable affairs, and the activities as further set forth in Exhibit B
hereto, so long as such activities do not interfere with Executive's
performance of his duties under this Agreement.

         3.       Former Employers. Executive represents and warrants that
employment by the Company will not conflict with and will not be constrained by
any prior or current employment, consulting or other relationship. Executive
represents and warrants that Executive does not possess confidential
information arising out of any such employment, consulting or other
relationship, which in Executive's best judgment, would be utilized in
connection with employment by the Company. Executive has documented in Exhibit
C any prior inventions claimed by Executive.


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         4.       Compensation.

                  4.1      Base Salary. In consideration for Executive's
                  services under this Agreement, Executive will be paid a
                  salary at an annual rate set forth in Exhibit A, or at such
                  other annual salary rate as determined by the CEO, the Board
                  or its Compensation Committee, but in any event at least
                  equal to the salary rate in effect immediately preceding any
                  change thereto. Executive's annual salary rate in effect from
                  time to time is referred to herein as the "Base Salary".
                  Executive's Base Salary shall be paid in periodic
                  installments at such times as salaries are generally paid to
                  other senior executives of the Company.

                  4.2      Earned Bonus, Performance Bonus and Other
                  Compensation. Executive shall be eligible to receive Bonus
                  Compensation equal to the Bonus Rate set forth in Exhibit A
                  at target and based on objectives to be mutually defined.
                  Bonus Compensation shall be paid on terms agreed to and
                  documented in writing. Executive's compensation by payments
                  of Base Salary and Bonus Compensation shall not be deemed
                  exclusive and shall not prevent Executive from participating
                  in any other incentive compensation, profit sharing or
                  benefit plan made available by the Company to its executive
                  Executives generally. The Base Salary payments hereunder
                  shall not in any way limit or reduce any other obligation of
                  the Company hereunder, and no other compensation, benefit or
                  payment hereunder shall in any way limit or reduce the
                  obligation of the Company to pay Executive's Base Salary.

                  4.3      Stock Option Grant. The Company shall grant to
                  Executive an incentive stock option (the "Option"), (to the
                  extent permitted by the applicable provisions of Section 422
                  of the Internal Revenue Code) to purchase the number of
                  shares of the common stock of the Company as set forth in
                  Exhibit A. Executive shall be entitled to option shares in an
                  amount and consistent with option shares being granted to the
                  Company's other senior executive officers, which option
                  shares will be issued pursuant to the Company's employee
                  stock option plans, subject to approval by the Board of
                  Directors, and shall include the following terms:

                  (1)      The option shares will vest as set forth in Exhibit
                  A.

                  (2)      The exercise price for the option shall be at the
                  closing price on the date the Board of Directors approves the
                  option (the "Date of Grant"), as appropriately adjusted for
                  stock splits, stock dividends, and the like.

                  (3)      The option shall be exercisable upon vesting or
                  within 90 days after termination of Executive's employment
                  with the Company. Termination shall occur after all
                  Continuation Payments, as defined in Section 7, have been
                  made by the Company to Executive.


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                  (4)      Issuance of the option shall be in accordance with
                  all applicable securities laws and the other terms and
                  conditions of the Company's Stock Option Plan and form of the
                  Stock Option Agreement.

                  (5)      The Option will have a term of ten years.

                  (6)      In the event of a Change of Control (as defined in
                  the Company's 2001 Equity Incentive Plan), all unvested
                  options will vest and become fully exercisable. In the event
                  of the death of the Executive; or the Permanent Disability of
                  Executive (as defined in Section 6.1 (b) hereof), vesting of
                  options will continue for the 90 day period thereafter. In
                  the event of the termination of Executive without Cause (as
                  defined in Section 6.1 (c) hereof) or termination by
                  Executive for Good Reason (as defined in Section 6.1(e), then
                  vesting of options will continue in accordance with their
                  terms over the 6 month severance period.

         5.       Benefits.

                  5.1      Participation. Executive shall be entitled to
                  participate in all fringe benefit programs maintained by the
                  Company and made available to its executive officers from
                  time to time. The Company shall maintain for Executive
                  disability, health, vision, dental and prescription drug
                  coverage comparable to that provided to executives of the
                  Company. Executive shall be entitled to four (4) weeks of
                  paid vacation per year, which vacation time shall accrue in
                  accordance with the Company's policies.

                  5.2      Expenses. The Company will pay or reimburse
                  Executive for such reasonable travel, entertainment or other
                  business expenses incurred on behalf of the Company in
                  connection with the performance of Executive's duties
                  hereunder but only to the extent that such expenses were
                  either specifically authorized by the Company or incurred in
                  accordance with policies established by the CEO for
                  executives and provided that Executive shall furnish the
                  Company with such evidence relating to such expenses as the
                  Company may reasonably require to substantiate such expenses
                  for tax purposes.

         6.       Termination of Employment.

                  6.1      Circumstances of Termination. Notwithstanding the
         terms set forth in Section 1 hereof, Executive's employment shall
         terminate under any of the following circumstances and the date of
         such an occurrence, unless otherwise provided below, shall be
         Executive's "Termination Date":

                           (a)      Death. Immediately, in the event of
         Executive's death.

                           (b)      Permanent Disability. At the option of the
         Company, if Executive becomes physically or mentally incapacitated or
         disabled so that (i) Executive is unable


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         to perform for the Company substantially the same services as
         Executive performed prior to incurring such incapacity or disability
         or to devote a substantial portion of Executive's business time or use
         Executive's best efforts to advance the business and welfare of the
         Company or otherwise to perform Executive's duties under this
         Agreement, (ii) such condition exists for an aggregate of six (6)
         months in any twelve (12) month consecutive calendar months, and (iii)
         such incapacity or disability is incapable of reasonable
         accommodations under applicable law, including but not limited to the
         Americans with Disabilities Act of 1990, as amended (a "Permanent
         Disability"), the Company, at its option and expense, is entitled to
         retain a physician reasonably acceptable to Executive to confirm the
         existence of such incapacity or disability, and the determination of
         such physician is binding upon the Company and Executive.

                           (c)      Cause. At the option of the Company, if
                                    Executive:

                                    (i)      has been convicted of a felony; or
                                    (ii)     has embezzled or misappropriated
                                             Company funds or property or that
                                             of the Company's customers,
                                             suppliers or affiliates; or
                                    (iii)    has violated any material term of
                                             this Employment Agreement; or
                                    (iv)     has demonstrated gross negligence
                                             or willful misconduct in
                                             connection with the performance of
                                             Executive's duties hereunder;

         provided, however, that with respect to subsections (iii) and (iv)
         above, the Company's right to terminate Executive shall be conditioned
         on (A) the Company giving Executive written notice specifically
         referring to the pertinent subsection above and describing the
         specific circumstances and/or actions purportedly giving rise to the
         occurrence of such item; and (B) failure by Executive, within ten (10)
         days after receipt of any such notice to cease the actions and/or
         reinstate or rectify the circumstances described in such notice to the
         reasonable satisfaction of the CEO. With respect to these subsections,
         the Company shall have the right to place Executive on administrative
         leave pending investigation of the circumstance(s) or action(s)
         purportedly giving rise to the occurrence of such items.

                           (d)      Without Cause. At the option of the Company
         at any time for any reason other than those referred to above or for
         no reason at all, whereupon the Company shall be obligated to make
         those payments set forth in Section 7 hereof but if, and only if,
         Executive executes a mutual, valid and comprehensive release of any
         and all claims that the Executive may have against the Company in a
         form provided by the Company.

                           (e)      Resignation for Good Reason.

                                    (i)      Executive, at Executive option,
                                             may resign for "Good Reason":


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                                    (1)      because the Company has
                                             unreasonably reduced the role or
                                             responsibilities of Executive;
                                    (2)      because the Company has reduced
                                             Executive's Base Salary from the
                                             level in effect immediately prior
                                             to such change, with the exception
                                             of a company-wide reduction of
                                             compensation due to economic
                                             considerations, provided that the
                                             foregoing shall not limit or
                                             derogate from the Company's
                                             obligations set forth in Section 4
                                             above;
                                    (3)      because the Company has breached
                                             any material term of this
                                             Agreement other than as noted in
                                             subsections (1) and (2) above;
                                    (4)      because the Company requests
                                             Executive to relocate; or
                                    (5)      the Company has relocated
                                             Executive's principal office
                                             location more than 20 miles from
                                             its current location.
                                    (6)      In the event that Executive
                                             terminates this Agreement for Good
                                             Reason, the Company shall become
                                             obligated to make those payments
                                             set forth in Section 7 hereof.

                  6.2      Notice of Termination. Any intent to terminate
                  employment by Executive pursuant to Section 6.1(e) shall be
                  communicated by written notice to the Company setting forth
                  in detail the specific actions deemed to constitute Good
                  Reason. If the Company does not respond within ten (10) days
                  from such notice, the resignation shall be deemed effective.
                  The Company may, within the ten (10) day period, correct such
                  condition giving rise to Executive's notice or dispute
                  Executive's claims by giving written notice of such dispute.

                  6.3      At-Will Employment. Notwithstanding the Company's
                  obligation described in Sections 6 and 7, Executive's
                  employment with the Company will be on an "at will" basis,
                  meaning that either Executive or the Company may terminate
                  Executive's employment at any time for any reason or no
                  reason, without further obligation or liability.

                  6.4      Resignation. Upon termination of employment,
                  Executive shall be deemed to have resigned from the Board of
                  Directors of the Company if Executive was a director.

                  6.5      Cooperation. After notice of termination and the 60
                  days thereafter, Executive shall cooperate with the Company,
                  as reasonably requested by the Company, to effect a
                  transition of Executive's


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                  responsibilities and to ensure that the Company is aware of
                  all matters being handled by Executive.

         7.       Payments Upon Termination of Employment.

                  7.1      Payments. In addition to any rights Executive may
         have under Section 4.3 on the Termination Date:

                           (a)      If the Company terminates Executive's
         employment for Cause or if Executive voluntarily terminates employment
         without Good Reason, the Company's obligation to compensate Executive
         shall in all respects cease as of the Termination Date, except that
         the Company shall pay to Executive within 30 days the Base Salary
         accrued under Section 4.1, a pro-rata amount of any Bonus or other
         compensation earned under Section 4.3, the value of accrued vacation
         time pursuant to Section 5.1 hereof, and the reimbursable expenses
         incurred under Section 5.2 of this Agreement up to such Termination
         Date (the "Accrued Obligations").

                           (b)      If Executive's employment is terminated due
         to the death of Executive, the Company's obligation to compensate
         Executive shall in all respects cease as of the Termination Date,
         except that within thirty (30) days after the Termination Date, the
         Company shall pay Executive's estate or legal representative the
         Accrued Obligations.

                           (c)      If Executive's employment is terminated
         upon the Permanent Disability of Executive, the Company's obligation
         to compensate Executive with respect to Base Salary (as in effect on
         the Termination Date) shall continue for up to six (6) months or until
         Executive is eligible for long-term disability payments from the
         Company's insurance provider, whichever is sooner. In addition, the
         Company shall pay Executive any Accrued Obligations within 30 days of
         termination; and

                           (d)      If Executive's employment is terminated by
         the Company pursuant to Section 6.1(d), or by Executive pursuant to
         Section 6.1(e) the Company's obligation to compensate Executive shall
         in all respects cease, except that within thirty (30) days after the
         Termination Date the Company shall pay Executive the Accrued
         Obligations and during the period ending on the expiration of the
         sixth month following the Termination Date the Company shall pay to
         Executive each month one-twelfth (1/12th) of the annual Base Salary of
         Executive in effect at the Termination Date (the "Continuation
         Payments"). The Company shall be excused from the obligations of this
         Section 7.1(d) if Executive breaches Executive's obligations under
         this Agreement or the Confidentiality Agreement.

         Notwithstanding the foregoing, in the event such termination occurs
         within two (2) years of a Change of Control of the Company, the full
         amount of the


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         Continuation Payments will be paid in a lump sum within ten (10) days
         of such Change of Control.

                  7.2      Medical Benefits.If Executive's employment is
         terminated by the Company pursuant to Section 6.1(d) or by Executive
         pursuant to Section 6.1(e), the Company shall reimburse the Executive
         for the amount of Executive's premium payments for group health
         coverage, if any, elected by the Executive pursuant to the
         Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
         ("COBRA"); provided, however, that the Executive shall be solely
         responsible for all matters relating to Executive's continuation of
         coverage pursuant to COBRA, including (without limitation) Executive's
         election of such coverage and Executive's timely payment of premiums;
         provided further , that upon the earlier to occur of (C) the time that
         the Executive no longer constitutes a Qualified Beneficiary (as such
         term is defined in Section 4980B(g)(1) of the Internal Revenue Code of
         1986, as amended) and (D) the date six (6) months following the
         Executive's termination, the Company's obligations to reimburse the
         Executive under this subsection (ii) shall cease.

                  7.3      Effect on this Agreement. Any termination of
         Executive's employment under this Agreement shall not affect the
         continuing operation and effect of this Section and Section 8 hereof,
         which shall continue in full force and effect with respect to the
         Company and Executive, and their heirs, successors and assigns.

                           Nothing in Section 6 hereof shall be deemed to
         operate as a release, settlement or discharge of any liability of
         Executive to the Company or others from any action or omission by
         Executive enumerated in Section 6.1 (c) hereof as a possible basis for
         termination of Executive's employment for Cause.

                  7.4      No Duty to Mitigate. Subject to the provisions of
         the Confidentiality Agreement and Section 8 of this Agreement,
         Executive shall be free to accept such employment and engage in such
         business as Executive may desire following the termination of
         employment hereunder, and no compensation received by Executive
         therefrom shall reduce or affect any payments required to be made by
         the Company hereunder except to the extent expressly provided herein
         or in the benefit plans of the Company.

         8.       Post-Employment Activities.

                  8.1      Conditional Nature of Severance Payments;
                           Non-Competition. Executive acknowledges that the
                           nature of the Company's business is such that during
                           the term of employment and for twelve (12) months
                           following termination of Executive's employment with
                           the Company (the "Noncompete Period"):

                           8.1.1    if Executive were to become employed by, or
                                    substantially involved in, the business of
                                    a Competitor, it would be very


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                                    difficult for the Executive not to rely on
                                    or use the Company's trade secrets and
                                    confidential information. A "Competitor" is
                                    defined as any person, entity or division,
                                    whether now existing or hereafter
                                    established, which directly competes with
                                    the products and services of the Company.
                                    To avoid the inevitable disclosure of the
                                    Company's trade secrets and confidential
                                    information, Executive agrees and
                                    acknowledges that the Executive's right to
                                    receive the severance payments and other
                                    benefits set forth in Section 7 (to the
                                    extent the Executive is otherwise entitled
                                    to such payments) shall be conditioned upon
                                    (a) the Executive not directly or
                                    indirectly engaging in (whether as an
                                    employee, consultant, proprietor, partner,
                                    director or otherwise), nor having any
                                    ownership interest directly or indirectly
                                    in more than 1% in, or participating in the
                                    financing, operation, management or control
                                    of, a Competitor; and (b) Executive
                                    continuing to observe, and not be in breach
                                    of, the provisions of the Confidentiality
                                    Agreement and Invention Assignment
                                    Agreement (the "Confidential Agreement")
                                    entered into by Executive and the Company.
                                    Upon any breach of this Section or the
                                    Confidentiality Agreement, all severance
                                    payments pursuant to Section 7 shall
                                    immediately cease.

                                    The obligations under the Confidential
                                    Agreement shall survive termination of this
                                    Agreement for any reason.

                           8.1.2    Executive shall not, without the prior
                                    written consent of the Company, directly or
                                    indirectly, (i) solicit, request, cause or
                                    induce any person who is at the time, or 12
                                    months prior thereto had been, an employee
                                    of or a consultant of the Company to leave
                                    the employ of or terminate such person's
                                    relationship with the Company or (ii)
                                    attempt to limit or interfere with any
                                    business agreement or relationship existing
                                    between the Company and/or its affiliates
                                    with a third party.

                           8.1.3    Executive shall not disparage the business
                                    reputation of the Company (or its
                                    management team) or take any actions that
                                    are harmful to the Company's goodwill with
                                    its customers, content providers, bandwidth
                                    or other network infrastructure providers,
                                    vendors, employees, the media or the
                                    public. Executive recognizes that such
                                    actions would cause irreparable harm for
                                    which there is no adequate remedy at law
                                    and that the Company may seek in state or
                                    federal court, and is entitled to a
                                    temporary restraining


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                                    order and to preliminary and permanent
                                    injunctive relief in state or federal court
                                    to stop any such conduct or statements for
                                    any breach or threatened breach of this
                                    Section 8 during the term of employment and
                                    for a period of two years thereafter.

                           8.1.4    The Company spends considerable amounts of
                                    time, money and effort in developing and
                                    maintaining good will in its industry.
                                    Executive agrees the covenants contained
                                    within this Section 8: (i) are reasonable
                                    and necessary in all respects to protect
                                    the goodwill, trade secrets, confidential
                                    information, and business interests of
                                    Company; (ii) are not oppressive to
                                    Executive; and (iii) do not impose any
                                    greater restraint on Executive than is
                                    reasonably necessary to protect the
                                    goodwill, trade secrets, confidential
                                    information and legitimate business
                                    interests of Company.

                           8.1.5    Executive acknowledges and agrees that
                                    promises made by the Company in this
                                    Agreement such as (i) the establishment of
                                    an employment relationship and (ii) the
                                    commitment to provide severance
                                    compensation in the event of the
                                    termination of Executive's employment for
                                    reasons other than Cause (subject to
                                    certain requirements on the part of
                                    Executive), constitute one form of
                                    consideration for Executive's agreement to
                                    and compliance with the restrictive
                                    covenants in this Agreement. Executive
                                    acknowledges and agrees that Company's
                                    agreement to provide Executive with access
                                    to Company's confidential and proprietary
                                    information is a separate form of
                                    consideration supporting the restrictive
                                    covenants in this Agreement. Executive
                                    acknowledges and agrees that the Company's
                                    agreement to permit the use of the
                                    Company's goodwill with the Company's
                                    customers, investors and content providers
                                    is a separate form of consideration
                                    supporting the restrictive covenants in
                                    this Agreement. Executive acknowledges and
                                    agrees that the Company's commitment to
                                    providing Executive with unique skill
                                    development and training is a separate form
                                    of consideration supporting the restrictive
                                    covenants in this Agreement.

                  8.2      Exclusions. No provision of this Agreement shall be
                  construed to preclude Executive from performing the same
                  services which the Company hereby retains Executive to
                  perform for any person or entity which is not a Competitor of
                  the Company upon the expiration or termination of Executive's
                  employment (or any post-employment


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                  consultation) so long as Executive does not thereby violate
                  any term of the Confidentiality Agreement.

         9.       Remedies. Executive's obligations under the Confidentiality
         Agreement under Section 8 of this Agreement shall survive the
         expiration or termination of Executive's employment (whether through
         Executive's resignation or otherwise) with the Company. Executive
         acknowledges that a remedy at law for any breach or threatened breach
         by Executive of the provisions of the Confidentiality Agreement or
         Section 8 would be inadequate and Executive therefore agree that the
         Company shall be entitled to injunctive relief in any court of
         competent jurisdiction in the case of any such breach or threatened
         breach. Executive acknowledges that this Section does not limit the
         Company's right to seek monetary damages for breach of this Agreement.

         10.      Miscellaneous.

                  10.1     Notice. All notices, requests, consents and other
                  communications hereunder shall be in writing, shall be
                  addressed to the receiving party's address set forth below or
                  to such other address as a party may designate by notice
                  hereunder, and shall be either (i) delivered by hand, (ii)
                  made by telecopy, (iii) send by overnight courier, or (iv)
                  sent by registered or certified mail, return receipt
                  required, postage prepaid.

                           If to the Company:  Internet Pictures Corporation
                                               3160 Crow Canyon Road
                                               Fourth Floor
                                               San Ramon, CA 94583

                           If to Executive:    Home address of Executive as
                                               maintained in the Company's
                                               personnel records.

                  10.2     Modification and No Waiver of Breach. No waiver or
                  modification of this Agreement shall be binding unless it is
                  in writing signed by the parties hereto. No waiver by a party
                  of a breach hereof by the other party shall be deemed to
                  constitute a waiver of a future breach, whether of a similar
                  or dissimilar nature, except to the extent specifically
                  provided in any written waiver under this Section.

                  10.3.    Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
                  AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
                  THE STATE OF CALIFORNIA EXCLUDING ITS CONFILICT OF LAW
                  PRINCIPALS. ALL QUESTIONS RELATING TO THE VALIDITY AND
                  PERFORMANCE


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                  HEREOF AND REMEDIES HEREUNDER SHALL BE DETERMINED IN
                  ACCORDANCE WITH SUCH LAW.

                  10.4.    Counterparts. This Agreement may be executed in one
                  or more counterparts, each of which shall be deemed an
                  original, but all of which taken together shall constitute
                  one and the same agreement.

                  10.5     Captions. The captions used herein are for ease of
                  reference only and shall not define or limit the provisions
                  hereof.

                  10.6     Assistance in Litigation. Executive shall, during
                  and after termination of employment, upon reasonable notice,
                  furnish such information and proper assistance to the Company
                  as may reasonably be required by the Company in connection
                  with any litigation in which it or any of its subsidiaries or
                  affiliates is, or may become a party; provided, however, that
                  such assistance following termination shall be furnished at
                  mutually agreeable times and for mutually agreeable
                  compensation.

                  10.7     Entire Agreement.This Agreement, any written
                  agreement referred to herein and the Exhibits hereto
                  constitute the entire agreement between the parties hereto
                  relating to the matters encompassed herby and supersede any
                  prior or contemporaneous written or oral agreements.

                  10.8     Successors.

                           (a)      Any successor to the Company (whether
                                    direct or indirect and whether by purchase,
                                    lease, merger, consolidation, liquidation
                                    or otherwise) to all or substantially all
                                    of the Company's business and assets shall
                                    assume the obligations under this Agreement
                                    and agree expressly to perform the
                                    obligations under this Agreement in the
                                    same manner and to the same extent as the
                                    Company would be required to perform such
                                    obligations in the absence of a succession.
                                    For all purposes under the Agreement, the
                                    term "Company" shall include successor to
                                    the Company's business and assets that
                                    executes and delivers the assumption
                                    agreement described in this subsection (a)
                                    or which becomes bound by the terms of this
                                    Agreement by operation of law.

                           (b)      The terms of this Agreement and all rights
                                    of Executive hereunder shall insure to the
                                    benefit or, and be enforceable by,
                                    Executive's personal or legal
                                    representatives, executors, administrators,
                                    successors, heirs, devisees and legatees.

                  10.9     Arbitration. Any dispute, controversy, or claim
                  arising out of, in connection with, or in relation to this
                  Agreement and its exhibits, except as


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                  provided in Section 9 hereof, shall be settled by arbitration
                  in California pursuant to the Commercial Rules then in effect
                  of the American Arbitration Association and in no other
                  place. Any award or determination shall be final, binding and
                  conclusive upon the parties, and a judgment rendered may be
                  entered in any court having jurisdiction thereof. Executive
                  and the Company knowingly waive any and all rights to a jury
                  trial in any form. The parties hereby expressly waive
                  punitive damages, and under no circumstances shall an award
                  contain any amount that in any way reflects punitive damages.
                  Each party shall bear its own expenses relating to the
                  arbitration, unless otherwise determined in arbitration.

                           It is intended that controversies or claims
                  submitted to arbitration under this Section shall remain
                  confidential, and to that end it is agreed by the parties
                  that neither the facts disclosed in the arbitration, the
                  issues arbitrated, nor the views or opinions of any persons
                  concerning them, shall be disclosed to third person at any
                  time, except to the extent necessary to enforce an award or
                  judgment or as require by law or in response to legal process
                  or in connection with such arbitration. Nothing in this
                  Section shall limit the Company's right to seek equitable
                  remedies in any court of competent jurisdiction for breach of
                  this Agreement.


         IN WITNESS HEREOF, this Agreement has been duly executed as of the
Effective date written in Exhibit A.



                                    INTERNET PICTURES CORPORATION


                                    By:  /s/ Sarah Pate
                                        ---------------------------------------

                                    Name: Sarah Pate
                                          -------------------------------------

                                    Title: SVP/GM
                                           ------------------------------------



                                    /s/ Paul Farmer
                                    ------------------------------------------
                                    Executive


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                                   EXHIBIT A

EFFECTIVE DATE OF EMPLOYMENT AGREEMENT:  JULY 01, 2001

NAME:  PAUL FARMER

TITLE:  CHIEF FINANCIAL OFFICER AND EXECUTIVE
 VICE PRESIDENT

DIRECT SUPERVISOR:  DONALD STRICKLAND

ANNUAL BASE SALARY:  $225,000

TARGET BONUS RATE: 50%

OPTIONS:
         NUMBER:  750,000
         VESTING START DATE:  JUNE 28TH, 2001
         VESTING TERMS:  33.3% VESTING ONE YEAR FROM GRANT DATE, THEN
                         1/24TH EACH MONTH THEREAFTER FOR FULL VESTING
                         THREE YEARS FROM GRANT DATE.

OTHER (STATE "NONE" IF NO OTHER ITEMS SHOULD BE NOTED):
NONE


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                                   EXHIBIT B

                                OTHER POSITIONS


                                      14
<PAGE>   15


                                   EXHIBIT C

                                PRIOR INVENTIONS


                                      15