Document:

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                                                                     EXHIBIT 4.5

                             1997 STOCK OPTION PLAN

                               OF CHILI!SOFT, INC.

1.      PURPOSE. This 1997 Stock Option Plan ("Plan") is established as a
        compensatory plan to attract, retain and provide equity incentives to
        selected persons to promote the financial success of Chili!Soft, Inc., a
        California corporation (the "Company"). Capitalized terms not previously
        defined herein are defined in Section 18 of this Plan.

2.      TYPES OF OPTIONS AND SHARES. Options granted under this Plan (the
        "Options") may be either (a) incentive stock options ("ISOs") within the
        meaning of Section 422 of the Internal Revenue Code of 1986, as amended
        (the "Code"), or (b) nonqualified stock options ("NQSOs"), as designated
        at the time of grant. The shares of stock that may be purchased upon
        exercise of Options granted under this Plan (the "Shares") are shares of
        the common stock of the Company.

3.      NUMBER OF SHARES. The aggregate number of Shares that may be issued
        pursuant to Options granted under this Plan is 921,500 Shares, subject
        to adjustment as provided in this Plan. If any Option expires or is
        terminated without being exercised in whole or in part, the unexercised
        or released Shares from such Option shall be available for future grant
        and purchase under this Plan. At all times during the term of this Plan,
        the Company shall reserve and keep available such number of Shares as
        shall be required to satisfy the requirements of outstanding Options
        under this Plan.

4.      ELIGIBILITY.

(a)     GENERAL RULES OF ELIGIBILITY. Options may be granted to employees,
        officers, directors, consultants, independent contractors and advisors
        (provided such consultants, contractors and advisors render bona fide
        services not in connection with the offer and sale of securities in a
        capital-raising transaction) of the Company or any Parent, Subsidiary or
        Affiliate of the Company. ISOs may be granted only to employees
        (including officers and directors who are also employees) of the Company
        or a Parent or Subsidiary of the Company. The Committee (as defined in
        Section 14) in its sole discretion shall select the recipients of
        Options ("Optionees"). An Optionee may be granted more than one Option
        under this Plan.

(b)     COMPANY ASSUMPTION OF OPTIONS. The Company may also, from time to time,
        assume outstanding options granted by another company, whether in
        connection with an acquisition of such other company or otherwise, by
        either (i) granting an Option under this Plan in replacement of the
        option assumed by the Company, or (ii) treating the assumed option as if
        it had been granted under this Plan if the terms of such assumed option
        could be applied to an option granted under this Plan. Such assumption
        shall be

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        permissible if the holder of the assumed option would have been eligible
        to be granted an option hereunder if the other company had applied the
        rules of this Plan to such grant.

5.      TERMS AND CONDITIONS OF OPTIONS. The Committee shall determine whether
        each Option is to be an ISO or an NQSO, the number of Shares subject to
        the Option, the exercise price of the Option, the period during which
        the Option may be exercised, and all other terms and conditions of the
        Option, subject to the following:

(a)     FORM OF OPTION GRANT. Each Option granted under this Plan shall be
        evidenced by a written Stock Option Grant (the "Grant") in substantially
        the form attached hereto as Exhibit A or such other form as shall be
        approved by the Committee.

(b)     DATE OF GRANT. The date of grant of an Option shall be the date on which
        the Committee makes the determination to grant such Option unless
        otherwise specified by the Committee. The Grant representing the Option
        will be delivered to the Optionee with a copy of this Plan within a
        reasonable time after the date of grant; provided, however that if, for
        any reason, including a unilateral decision by the Company not to
        execute an agreement evidencing such option, a written Grant is not
        executed within sixty (60) days after the date of grant, such option
        shall be deemed null and void. No option shall be exercisable until such
        Grant is executed by the Company and the Optionee.

(c)     EXERCISE PRICE. The exercise price of an NQSO shall be not less than
        eighty-five percent (85%) of the Fair Market Value of the Shares on the
        date the Option is granted. The exercise price of an ISO shall be not
        less than one hundred percent (100%) of the Fair Market Value of the
        Shares on the date the Option is granted. The exercise price of any
        option granted to a person owning more than ten percent (10%) of the
        total combined voting power of all classes of stock of the Company or
        any Parent or Subsidiary of the Company ("Ten Percent Shareholders")
        shall not be less than one hundred and ten percent (110%) of the Fair
        Market Value of the Shares on the date the Option is granted.

(d)     EXERCISE PERIOD. Options shall be exercisable within the times or upon
        the events determined by the Committee as set forth in the Grant;
        provided, however that each Option must become exercisable at a rate of
        at least twenty percent (20%) per year over five (5) years from the date
        the Option is granted; and provided, however, that no Option shall be
        exercisable after the expiration of ten (10) years from the date the
        Option is granted, and provided further that no ISO granted to a Ten
        Percent Shareholder shall be exercisable after the expiration of five
        (5) years from the date the Option is granted.

(e)     LIMITATIONS ON ISOS. The aggregate Fair Market Value (determined as of
        the time an Option is granted) of stock with respect to which ISOs are
        exercisable for the first time by an Optionee during any calendar year
        (under this Plan or under any other incentive stock option plan of the
        Company or any Parent or Subsidiary of the Company) shall not exceed one
        hundred thousand dollars ($100,000). If the Fair Market Value of stock
        with respect to which ISOs are exercisable for the first time by an
        Optionee during any calendar year exceeds $100,000, the Options for the
        first $100,000 worth of stock to

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        become exercisable in such year shall be ISOs and the Options for the
        amount in excess of $100,000 that becomes exercisable in that year shall
        be NQSOs. In the event that the Code or the regulations promulgated
        thereunder are amended after the effective date of this Plan to provide
        for a different limit on the Fair Market Value of Shares permitted to be
        subject to ISOs, such different limit shall be incorporated herein and
        shall apply to any Options granted after the effective date of such
        amendment.

(f)     OPTIONS NON-TRANSFERABLE. Options granted under this Plan, and any
        interest therein, shall not be transferable or assignable by the
        Optionee, and may not be made subject to execution, attachment or
        similar process, otherwise than by will or by the laws of descent and
        distribution and shall be exercisable during the lifetime of the
        Optionee only by the Optionee or any permitted transferee.

(g)     ASSUMED OPTIONS. In the event the Company assumes an option granted by
        another company in accordance with 4(b) above, the terms and conditions
        of such option shall remain unchanged (except the exercise price and the
        number and nature of shares issuable upon exercise, which will be
        adjusted appropriately pursuant to Section 424 of the Code and the
        Treasury Regulations applicable thereto). In the event the Company
        elects to grant a new option rather than assuming an existing option (as
        specified in Section 4), such new option need not be granted at Fair
        Market Value on the date of grant and may instead be granted with a
        similarly adjusted exercise price.

6.      EXERCISE OF OPTIONS.

(a)     NOTICES. Options may be exercised only by delivery to the Company of a
        written exercise agreement in a form approved by the Committee (which
        need not be the same for each Optionee), stating the number of Shares
        being purchased, the restrictions imposed on the Shares, if any, and
        such representations and agreements regarding the Optionee's investment
        intent and access to information, if any, as may be required by the
        Company to comply with applicable securities laws, together with payment
        in full of the exercise price for the number of Shares being purchased.

(b)     PAYMENT. Payment for the Shares may be made in cash (by check) or, where
        approved by the Committee in its sole discretion at the time of grant
        and where permitted by law: (i) by execution of a promissory note for
        the benefit of the Company, having such terms as are approved by the
        Committee; (ii) by cancellation of indebtedness of the Company to the
        Optionee; (iii) by surrender of shares of Common Stock of the Company
        already owned by the Optionee, having a Fair Market Value equal to the
        exercise price of the Option; (iv) by waiver of compensation due or
        accrued to Optionee for services rendered; (v) through a guaranty by the
        Company of a loan to the Optionee by a third party of all or part of the
        option price (but not more than the option price), and such guaranty may
        be on an unsecured or secured basis as the Committee shall approve
        (including, without limitation, by a security interest in the shares of
        the Company); (vi) provided that a public market for the Company's stock
        exists, through a "same day sale" commitment from the Optionee and a
        broker-dealer that is a member of the National Association of Securities

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        Dealers, Inc. (an "NASD Dealer") whereby the Optionee irrevocably elects
        to exercise the Option and to sell a portion of the Shares so purchased
        to pay for the exercise price and whereby the NASD Dealer irrevocably
        commits upon receipt of such Shares to forward the exercise price
        directly to the Company; (vii) provided that a public market for the
        Company's stock exists, through a "margin" commitment from the Optionee
        and an NASD Dealer whereby the Optionee irrevocably elects to exercise
        the Option and to pledge the Shares so purchased to the NASD Dealer in a
        margin account as security for a loan from the NASD Dealer in the amount
        of the exercise price, and whereby the NASD Dealer irrevocably commits
        upon receipt of such Shares to forward the exercise price directly to
        the Company; or (viii) by any combination of the foregoing.

(c)     WITHHOLDING TAXES. Prior to issuance of the Shares upon exercise of an
        Option, the Optionee shall pay or make adequate provision for any
        federal or state withholding obligations of the Company, if applicable.
        Where approved by the Committee in its sole discretion, the Optionee may
        provide for payment of withholding taxes upon exercise of the Option by
        requesting that the Company retain Shares with a Fair Market Value equal
        to the minimum amount of taxes required to be withheld. In such case,
        the Company shall issue the net number of Shares to the Optionee by
        deducting the Shares retained from the Shares exercised. The Fair Market
        Value of the Shares to be withheld shall be determined on the date that
        the amount of tax to be withheld is to be determined in accordance with
        Section 83 of the Code (the "Tax Date"). All elections by Optionees to
        have Shares withheld for this purpose shall be made in writing in a form
        acceptable to the Committee and shall be subject to the following
        restrictions:

(i)     the election must be made on or prior to the applicable Tax Date;

(ii)    once made, the election shall be irrevocable as to the particular Shares
        as to which the election is made;

(iii)   all elections shall be subject to the consent or disapproval of the
        Committee;

(iv)    if the Optionee is an officer or director of the Company or other person
        (in each case, an "Insider") whose transactions in the Company's Common
        Stock are subject to Section 16(b) of the Securities Exchange Act of
        1934, as amended (the "Exchange Act") and if the Company is subject to
        Section 16(b) of the Exchange Act, the election must be made at least
        six (6) months prior to the Tax Date and must otherwise comply with Rule
        16b-3.

(d)     LIMITATIONS ON EXERCISE. Notwithstanding anything else to the contrary
        in the Plan or any Grant, no Option may be exercisable later than the
        expiration date of the Option.

7.      RESTRICTIONS ON SHARES. At the discretion of the Committee, the Company
        may reserve to itself and/or its assignee(s) in the Grant (a) a right of
        first refusal to purchase all Shares that an Optionee (or a subsequent
        transferee) may propose to transfer to a third party and/or (b) for so
        long as the Company's stock is not publicly traded, a right to
        repurchase a portion of or all Shares held by an Optionee upon the
        Optionee's termination

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        of employment or service with the Company or its Parent, Subsidiary or
        Affiliate, except that the Company may repurchase a portion (but not
        all) of the Shares held by an Optionee only if the Optionee first
        consents to such repurchase, for any reason within a specified time as
        determined by the Committee at the time of grant at the higher of (i)
        the Optionee's original purchase price, (ii) the Fair Market Value of
        such Shares or (iii) a price determined by a formula or other provision
        set forth in the Grant. The terms of such a right of repurchase shall
        conform to Section 260.140.41(k) of the California Corporations
        Commissioner's Rules, or any successor rule.

8.      MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS. The Committee shall have
        the power to modify, extend or renew outstanding Options and to
        authorize the grant of new Options in substitution therefor, provided
        that any such action may not, without the written consent of the
        Optionee, impair any rights under any Option previously granted. Any
        outstanding ISO that is modified, extended, renewed or otherwise altered
        shall be treated in accordance with Section 424(h) of the Code. The
        Committee shall have the power to reduce the exercise price of
        outstanding options; provided, however, that the exercise price per
        share may not be reduced below the minimum exercise price that would be
        permitted under Section 5(c) of this Plan for options granted on the
        date the action is taken to reduce the exercise price.

9.      PRIVILEGES OF STOCK OWNERSHIP. No Optionee shall have any of the rights
        of a shareholder with respect to any Shares subject to an Option until
        such Option is properly exercised. No adjustment shall be made for
        dividends or distributions or other rights for which the record date is
        prior to such date, except as provided in this Plan. The Company shall
        provide to each Optionee a copy of the annual financial statements of
        the Company, at such time after the close of each fiscal year of the
        Company as such statements are released by the Company to its
        shareholders.

10.     NO OBLIGATION TO EMPLOY; NO RIGHT TO FUTURE GRANTS. Nothing in this Plan
        or any Option granted under this Plan shall confer on any Optionee any
        right (a) to continue in the employ of, or other relationship with, the
        Company or any Parent or Subsidiary of the Company or limit in any way
        the right of the Company or any Parent or Subsidiary of the Company to
        terminate the Optionee's employment or other relationship at any time,
        with or without cause or (b) to have any Option(s) granted to such
        Optionee under this Plan, or any other plan, or to acquire any other
        securities of the Company, in the future.

11.     ADJUSTMENT OF OPTION SHARES. In the event that the number of outstanding
        shares of Common Stock of the Company is changed by a stock dividend,
        stock split, reverse stock split, combination, reclassification or
        similar change in the capital structure of the Company without
        consideration, or if a substantial portion of the assets of the Company
        are distributed, without consideration in a spin-off or similar
        transaction, to the shareholders of the Company, the number of Shares
        available under this Plan and the number of Shares subject to
        outstanding Options and the exercise price per share of such Options
        shall be proportionately adjusted, subject to any required action by the
        Board of

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        Directors (the "Board") or shareholders of the Company and compliance
        with applicable securities laws; provided, however, that a fractional
        share shall not be issued upon exercise of any Option and any fractions
        of a Share that would have resulted shall either be cashed out at Fair
        Market Value or the number of Shares issuable under the Option shall be
        rounded up to the nearest whole number, as determined by the Committee;
        and provided further that the exercise price may not be decreased to
        below the par value, if any, for the Shares.

12.     ASSUMPTION OF OPTIONS BY SUCCESSORS.

(a)     In the event of (i) a merger or consolidation in which the Company is
        not the surviving corporation (other than a merger or consolidation with
        a wholly-owned subsidiary or where there is no substantial change in the
        shareholders of the corporation and the Options granted under this Plan
        are assumed by the successor corporation), or (ii) the sale of all or
        substantially all of the assets of the Company, any or all outstanding
        Options shall be assumed by the successor corporation, which assumption
        shall be binding on all Optionees, an equivalent option shall be
        substituted by such successor corporation or the successor corporation
        shall provide substantially similar consideration to Optionees as was
        provided to shareholders (after taking into account the existing
        provisions of the Optionees' options such as the exercise price and the
        vesting schedule), and, in the case of outstanding shares subject to a
        repurchase option, issue substantially similar shares or other property
        subject to repurchase restrictions no less favorable to the Optionee.

(b)     In the event such successor corporation, if any, refuses to assume or
        substitute, as provided above, pursuant to an event described in (a)
        above, or in the event of a dissolution or liquidation of the Company,
        the Options shall, except as set forth in a particular Grant, expire on
        a date at least twenty (20) days after the Committee gives written
        notice to the Optionees specifying the terms and conditions of such
        termination.

13.     ADOPTION AND SHAREHOLDER APPROVAL. This Plan shall become effective on
        the date that it is adopted by the Board. This Plan shall be approved by
        the shareholders of the Company, in any manner permitted by applicable
        corporate law, within twelve (12) months before or after the date this
        Plan is adopted by the Board. Thereafter, no later than twelve (12)
        months after the Company becomes subject to Section 16(b) of the
        Exchange Act, the Company will comply with the requirements of Rule
        16b-3 (or its successor) with respect to shareholder approval.

14.     ADMINISTRATION. This Plan may be administered by the Board or a
        Committee appointed by the Board (the "Committee"). If, at any time
        after the Company registers under the Exchange Act, all of the directors
        are not Disinterested Persons, the Board shall appoint a Committee
        consisting of not less than two directors, each of whom is a
        Disinterested Person and at all times during which the Company is
        registered under the Exchange Act, the Committee shall be comprised of
        Disinterested Persons. As used in this Plan, references to the
        "Committee" shall mean either such Committee or the Board if no
        committee has been established. The interpretation by the Committee of
        any of the

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        provisions of this Plan or any Option granted under this Plan shall be
        final and binding upon the Company and all persons having an interest in
        any Option or any Shares purchased pursuant to an Option.

15.     TERM OF PLAN. Options may be granted pursuant to this Plan from time to
        time on or prior to August 28, 2007.

16.     AMENDMENT OR TERMINATION OF PLAN. The Board of Directors or Committee
        may, at any time, amend, alter, suspend or discontinue the Plan, but no
        amendment, alteration, suspension or discontinuation shall be made which
        would impair the rights of any Optionee under any Option theretofore
        granted, without his or her consent, or which, without the approval of a
        majority of the outstanding voting shares of the Company would:

(a)     except as provided in Section 11 of the Plan, increase the total number
        of Shares reserved for the purposes of the Plan;

(b)     extend the duration of the Plan;

(c)     extend the period during and over which Options may be exercised under
        the Plan; or

(d)     change the class of persons eligible to receive Options granted
        hereunder.

Without limiting the foregoing, the Board of Directors may at any time or from
time to time authorize the Company, with the consent of the respective
Optionees, to issue new options in exchange for the surrender and cancellation
of any or all outstanding Options.

17.     INFORMATION RIGHTS. The Company shall furnish and/or make available
        financial statements to each Optionee under the Plan on an annual basis,
        unless such Optionee is a key employee whose duties in connection with
        the Company assure him or her access to equivalent information.

18.     CERTAIN DEFINITIONS. As used in this Plan, the following terms shall
        have the following meanings:

(a)     "PARENT" means any corporation (other than the Company) in an unbroken
        chain of corporations ending with the Company if, at the time of the
        granting of the Option, each of the corporations other than the Company
        owns stock possessing fifty percent (50%) or more of the total combined
        voting power of all classes of stock in one of the other corporations in
        such chain.

(b)     "SUBSIDIARY" means any corporation (other than the Company) in an
        unbroken chain of corporations beginning with the Company if, at the
        time of the granting of the Option, each of the corporations other than
        the last corporation in the unbroken chain owns stock possessing fifty
        percent (50%) or more of the total combined voting power of all classes

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        of stock in one of the other corporations in such chain.

(c)     "AFFILIATE" means any corporation that directly, or indirectly through
        one or more intermediaries, controls or is controlled by, or is under
        common control with, another corporation, where "control" (including the
        terms "controlled by" and "under common control with") means the
        possession, direct or indirect, of the power to cause the direction of
        the management and policies of the corporation, whether through the
        ownership of voting securities, by contract or otherwise.

(d)     "DISINTERESTED PERSONS" shall have the meaning set forth in Rule
        16b-3(c)(2) as promulgated by the SEC under Section 16(b) of the
        Exchange Act, as such rule is amended from time to time and as
        interpreted by the SEC.

(e)     "FAIR MARKET VALUE" shall mean the fair market value of the Shares as
        determined by the Committee from time to time in good faith. If a public
        market exists for the Shares, the Fair Market Value shall be the average
        of the last reported bid and asked prices for Common Stock of the
        Company on the last trading day prior to the date of determination or,
        in the event the Common Stock of the Company is listed on a stock
        exchange or on the NASDAQ National Market System, the Fair Market Value
        shall be the closing price on such exchange or quotation system on the
        last trading day prior to the date of determination.

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                                    EXHIBIT A

                               STOCK OPTION GRANT

Optionee:

Address:

Total Shares Subject to Option:

Exercise Price Per Share:

Date of Grant:

Expiration Date of Option:

Type of Stock Option:                  Incentive:
                                       Nonqualified:

1.      GRANT OF OPTION. Chili!Soft, Inc., a California corporation (the
        "Company"), hereby grants to the optionee named above ("Optionee") an
        option (this "Option") to purchase the total number of shares of Common
        Stock of the Company set forth above (the "Shares") at the exercise
        price per share set forth above (the "Exercise Price"), subject to all
        of the terms and conditions of this Grant and the Company's 1996 Stock
        Option Plan, as amended to the date hereof (the "Plan"). If designated
        as an Incentive Stock Option above, this Option is intended to qualify
        as an "incentive stock option" ("ISO") within the meaning of Section 422
        of the Internal Revenue Code of 1986, as amended (the "Code"). Unless
        otherwise defined herein, capitalized terms used herein shall have the
        meanings ascribed to them in the Plan.

2.      EXERCISE PERIOD OF OPTION. The option rights granted hereunder are
        exercisable during the time period or periods, and as to the number of
        shares exercisable during each time period, as follows:

        (a) _____________ shares, or any part thereof, may be exercised at any
        time or times, from and including _______________ to and including
        ____________________;

        (b) an additional ___________ shares, or any part thereof, may be
        exercised at any time or times, from and including ____________ to and
        including ___________________;

        (c) an additional ___________ shares, or any part thereof, may be
        exercised at any

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        time or times, from and including _____________ to and including
        ___________________;

        (d) an additional ___________ shares, or any part thereof, may be
        exercised at any time or times, from and including _____________ to and
        including ___________________;

        (e) and the remaining ____________ shares, or any part thereof, may be
        exercised at any time or times, from and including _________ to and
        including ____________.

Notwithstanding the above, (i) the minimum number of Shares that may be
purchased upon any partial exercise of the Option is one hundred (100) shares,
and (ii) this Option shall expire on the Expiration Date set forth above and
must be exercised, if at all, on or before the Expiration Date. The portion of
Shares as to which an Option is exercisable in accordance with the above
schedule as of the applicable dates shall be deemed "Vested Options."

3.      RESTRICTION ON EXERCISE. This Option may not be exercised unless such
        exercise is in compliance with the Securities Act of 1933, as amended,
        and all applicable state securities laws, as they are in effect on the
        date of exercise, and the requirements of any stock exchange or
        over-the-counter market on which the Company's Common Stock may be
        listed or quoted at the time of exercise. Optionee understands that the
        Company is under no obligation to register, qualify or list the Shares
        with the Securities and Exchange Commission, any state securities
        commission or any stock exchange to effect such compliance.

4.      TERMINATION OF OPTION. Except as provided below in this Section 4, this
        Option shall terminate and may not be exercised if Optionee ceases to be
        employed by the Company or by any Parent or Subsidiary of the Company
        (or, in the case of a nonqualified stock option, by any Affiliate of the
        Company). Optionee shall be considered to be employed by the Company for
        all purposes under this Section 4 if Optionee is an officer, director or
        full-time employee of the Company or any Parent, Subsidiary or Affiliate
        of the Company or if the Board of Directors determines that Optionee is
        rendering substantial services as a part-time employee, consultant,
        contractor or advisor to the Company or any Parent, Subsidiary or
        Affiliate of the Company. The Board of Directors of the Company shall
        have discretion to determine whether Optionee has ceased to be employed
        by the Company or any Parent, Subsidiary or Affiliate of the Company and
        the effective date on which such employment terminated (the "Termination
        Date").

(a)     TERMINATION GENERALLY. If Optionee ceases to be employed by the Company
        and all Parents, Subsidiaries or Affiliates of the Company for any
        reason except death or disability, this Option, to the extent (and only
        to the extent) that it would have been exercisable by Optionee on the
        Termination Date, may be exercised by Optionee, but only within thirty
        (30) days after the Termination Date; provided that this Option may not
        be exercised in any event after the Expiration Date.

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(b)     DEATH OR DISABILITY. If Optionee's employment with the Company and all
        Parents, Subsidiaries and Affiliates of the Company is terminated
        because of the death of Optionee or the permanent and total disability
        of Optionee within the meaning of Section 22(e)(3) of the Code, this
        Option, to the extent (and only to the extent) that it would have been
        exercisable by Optionee on the Termination Date, may be exercised by
        Optionee (or Optionee's legal representative), but only within twelve
        (12) months after the Termination Date, provided that this Option may
        not be exercised in any event later than the Expiration Date.

If Optionee's employment with the Company and all Parents, Subsidiaries and
Affiliates of the Company is terminated because of disability of Optionee which
is not permanent and total disability within the meaning of Section 22(e)(3) of
the Code, this Option, to the extent (and only to the extent) that it would have
been exercisable by Optionee on the Termination Date, may be exercised by
Optionee (or Optionee's legal representative), but only within six (6) months
after the Termination Date, provided that this Option may not be exercised in
any event later than the Expiration Date. In such case, if Optionee fails to
exercise this Option within the first three (3) months of such six (6) month
period, this Option will no longer qualify as an ISO (even if is designated an
ISO on page 1 of this Grant).

(c)     NO RIGHT TO EMPLOYMENT. Nothing in the Plan or this Grant shall confer
        on Optionee any right to continue in the employ of, or other
        relationship with, the Company or any Parent, Subsidiary or Affiliate of
        the Company or limit in any way the right of the Company or any Parent,
        Subsidiary or Affiliate of the Company to terminate Optionee's
        employment or other relationship at any time, with or without cause.

5.      MANNER OF EXERCISE.

(a)     EXERCISE AGREEMENT. This Option shall be exercisable by delivery to the
        Company of an executed written Stock Option Exercise Agreement in the
        form attached hereto as Exhibit I, or in such other form as may be
        approved by the Company, which shall set forth Optionee's election to
        exercise some or all of this Option, the number of Shares being
        purchased, any restrictions imposed on the Shares and such other
        representations and agreements as may be required by the Company to
        comply with applicable securities laws.

(b)     EXERCISE PRICE. Such notice shall be accompanied by full payment of the
        Exercise Price for the Shares being purchased. Payment for the Shares
        may be made in cash (by check), or, where permitted by law, by any of
        the following methods approved by the Committee at the date of grant of
        this Option, or any combinations thereof:

                (i)     by cancellation of indebtedness of the Company to the
                        Optionee;

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                (ii)    by surrender of shares of Common Stock of the Company
                        already owned by the Optionee, or which were obtained by
                        Optionee in the open public market, having a Fair Market
                        Value equal to the exercise price of the Option;

                (iii)   by waiver of compensation due or accrued to Optionee for
                        services rendered;

                (iv)    provided that a public market for the Company's stock
                        exists, through a "same day sale" commitment from the
                        Optionee and a broker dealer that is a member of the
                        National Association of Securities Dealers, Inc. (an
                        "NASD Dealer") whereby the Optionee irrevocably elects
                        to exercise the Option and to sell a portion of the
                        Shares so purchased to pay for the exercise price and
                        whereby the NASD Dealer irrevocably commits upon receipt
                        of such Shares to forward the exercise price directly to
                        the Company; or

                (v)     provided that a public market for the Company's stock
                        exists, through a "margin" commitment from the Optionee
                        and an NASD Dealer whereby the Optionee irrevocably
                        elects to exercise this option and to pledge the Shares
                        so purchased to the NASD Dealer in a margin account as
                        security for a loan from the NASD Dealer in the amount
                        of the exercise price, and whereby the NASD Dealer
                        irrevocably commits upon receipt of such Shares to
                        forward the exercise price directly to the Company.

(c)     WITHHOLDING TAXES. Prior to the issuance of the Shares upon exercise of
        this Option, to the extent deemed applicable and relevant by the Board,
        Optionee must pay or make adequate provision for any applicable federal
        or state withholding obligations of the Company. The Optionee may
        provide for payment of Optionee's minimum statutory withholding taxes
        upon exercise of the Option by requesting that the Company retain Shares
        with a Fair Market Value equal to the minimum amount of taxes required
        to be withheld, all as set forth in Section 6(c) of the Plan. In such
        case, the Company shall issue the net number of Shares to the Optionee
        by deducting the Shares retained from the Shares exercised.

(d)     ISSUANCE OF SHARES. Provided that such notice and payment are in form
        and substance satisfactory to counsel for the Company, the Company shall
        cause the Shares to be issued in the name of Optionee or Optionee's
        legal representative.

6.      NOTICE OF DISQUALIFYING DISPOSITION OF ISO SHARES. If the Option granted
        to Optionee herein is an ISO, and if Optionee sells or otherwise
        disposes of any of the Shares acquired pursuant to the ISO on or before
        the later of (1) the date two years after the Date of Grant, or (2) the
        date one year after exercise of the ISO with respect to the Shares to be
        sold or disposed of, the Optionee shall immediately notify the Company
        in writing of such disposition. Optionee acknowledges and agrees that
        Optionee may be

                                       12
<PAGE>   13

        subject to income tax withholding by the Company on the compensation
        income recognized by the Optionee from any such early disposition by
        payment in cash or out of the current wages or other earnings payable to
        the Optionee.

7.      RESTRICTIONS ON SHARES. The Company hereby reserves to itself and/or its
        assignee(s) (a) a right of first refusal to purchase all Shares that an
        Optionee (or a subsequent transferee) may propose to transfer to a third
        party and (b) for so long as the Company's stock is not publicly traded,
        a right to repurchase a portion of or all Shares held by an Optionee
        upon the Optionee's termination of employment or service with the
        Company or its Parent, Subsidiary or Affiliate, except that the Company
        may repurchase a portion (but not all) of the Shares held by an Optionee
        only if the Optionee first consents to such repurchase, for any reason
        within three months of such termination of employment or service at the
        higher of (i) the Optionee's original purchase price, or (ii) the Fair
        Market Value of such Shares on the date of such termination of
        employment of service. The terms of such a right of repurchase shall
        conform to Section 260.140.41(k) of the California Corporations
        Commissioner's Rules, or any successor rule.

8.      NONTRANSFERABILITY OF OPTION. This Option may not be transferred in any
        manner other than by will or by the law of descent and distribution and
        may be exercised during the lifetime of Optionee only by Optionee or
        other permitted transferee. The terms of this Option shall be binding
        upon the executors, administrators, successors and assigns of the
        Optionee.

9.      FEDERAL TAX CONSEQUENCES. Set forth below is a brief summary as of the
        date this form of Option Grant was adopted of some of the federal tax
        consequences of exercise of this Option and disposition of the Shares.
        THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS
        ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE
        EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

(a)     EXERCISE OF ISO. If this Option qualifies as an ISO, there will be no
        regular federal income taxability upon the exercise of this Option,
        although the excess, if any, of the Fair Market Value of the Shares on
        the date of exercise over the Exercise Price will be treated as an
        adjustment to alternative minimum taxable income for federal income tax
        purposes and may subject the Optionee to an alternative minimum tax
        liability in the year of exercise.

(b)     EXERCISE OF NONQUALIFIED STOCK OPTION. If this Option does not qualify
        as an ISO, there may be a regular federal income tax liability upon the
        exercise of the Option. The Optionee will be treated as having received
        compensation income (taxable at ordinary income tax rates) equal to the
        excess, if any, of the Fair Market Value of the Shares on the date of
        exercise over the Exercise Price. The Company will be required to
        withhold from Optionee's compensation or collect from Optionee and pay
        to the applicable taxing authorities an amount equal to a percentage of
        this compensation income at the time of exercise.

                                       13
<PAGE>   14

(c)     DISPOSITION OF SHARES. In the case of a nonqualified option, if Shares
        are held for at least one year before disposition, any gain on
        disposition of the Shares will be treated as long-term capital gain for
        federal and California income tax purposes. In the case of an ISO, if
        Shares are held for at least one year after the date of exercise and at
        least two years after the Date of Grant, any gain on disposition of the
        Shares will be treated as long-term capital gain for federal and
        California income tax purposes. If Shares acquired pursuant to an ISO
        are disposed of within such one-year or two-year periods (a
        "disqualifying disposition"), gain on such disqualifying disposition
        will be treated as compensation income (taxable at ordinary income
        rates) to the extent of the excess, if any, of the Fair Market Value of
        the Shares on the date of exercise over the Exercise Price (the
        "Spread"). Any gain in excess of the Spread shall be treated as capital
        gain.

10.     INTERPRETATION. Any dispute regarding the interpretation of this Grant
        shall be submitted by Optionee or the Company to the Company's Board of
        Directors or the Committee, which shall review such dispute at its next
        regular meeting. The resolution of such a dispute by the Board or
        Committee shall be final and binding on the Company and on Optionee.

11.     ENTIRE AGREEMENT. The Plan and the Stock Option Exercise Agreement
        attached hereto as Exhibit I are incorporated herein by this reference.
        This Grant, the Plan and the Stock Option Exercise Agreement constitute
        the entire agreement of the parties hereto and supersede all prior
        undertakings and agreements with respect to the subject matter hereof.

CHILI!SOFT, INC.

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

                                   ACCEPTANCE

        Optionee hereby acknowledges receipt of a copy of the Plan, represents
that Optionee has read and understands the terms and provisions thereof, and
accepts this Option subject to all the terms and conditions of the Plan and this
Stock Option Grant. Optionee acknowledges that there may be adverse tax
consequences upon exercise of this Option or disposition of the Shares and that
Optionee should consult a tax adviser prior to such exercise or disposition.

                                       OPTIONEE

                                       -----------------------------------------
                                       Signature

                                       -----------------------------------------
                                       Print Name

                                       14
<PAGE>   15

                                    EXHIBIT I
                              TO STOCK OPTION GRANT
                         STOCK OPTION EXERCISE AGREEMENT

        This Agreement is made this ___ day of ______________, 19__ between
Chili!Soft, Inc., a California corporation (the "Company"), and the optionee
named below ("Optionee").

Optionee: _________________________________________________________
Social Security Number: ___________________________________________
Address: __________________________________________________________
_____________________________________________________________
Number of Shares Purchased: _________________________________
Price Per Share: __________________________________________________
Aggregate Purchase Price: _________________________________________
Date of Option Grant: _____________________________________________
Type of Stock Option:                  Incentive:
                                       Nonqualified:

Optionee hereby delivers to the Company the Aggregate Purchase Price, to the
extent permitted in the Option Grant, as follows:

        cash (check) in the amount of $_________, receipt of which is
acknowledged by the Company;

        by delivery of _________ fully-paid, nonassessable and vested shares of
the Common Stock of the Company owned by Optionee and owned free and clear of
all liens, claims, encumbrances or security interests, valued at the current
fair market value of $_________ per share (as determined by the Board of
Directors of the Company in good faith);

        by the waiver hereby of compensation due or accrued for services
rendered in the amount of $___________;

        by delivery of a "same day sale" commitment from the Optionee and a
broker dealer that is a member of the National Association of Securities
Dealers, Inc. (an "NASD Dealer") whereby the Optionee irrevocably elects to
exercise the Option and to sell a portion of the Shares so purchased to pay for
the exercise price of $_________ and whereby the NASD Dealer irrevocably commits
upon receipt of such Shares to forward the exercise price directly to the
Company (this payment method may be used only if a public market for the
Company's stock

                                       15
<PAGE>   16

exists); or

        by delivery of a "margin" commitment from the Optionee and an NASD
Dealer whereby the Optionee irrevocably elects to exercise this option and to
pledge the Shares so purchased to the NASD Dealer in a margin account as
security for a loan from the NASD Dealer in the amount of the exercise price,
and whereby the NASD Dealer irrevocably commits upon receipt of such Shares to
forward the exercise price of $_________ directly to the Company (this payment
method may be used only if a public market for the Company's stock exists).

The Company and Optionee hereby agree as follows:

1.      PURCHASE OF SHARES. On this date and subject to the terms and conditions
        of this Agreement, Optionee hereby exercises the Stock Option Grant
        between the Company and Optionee dated as of the Date of Option Grant
        set forth above (the "Grant"), with respect to the Number of Shares
        Purchased set forth above of the Company's Common Stock (the "Shares")
        at an aggregate purchase price equal to the Aggregate Purchase Price set
        forth above (the "Purchase Price") and the Price per Share set forth
        above (the "Purchase Price Per Share"). The term "Shares" refers to the
        Shares purchased under this Agreement and includes all securities
        received (a) in replacement of the Shares, and (b) as a result of stock
        dividends or stock splits in respect of the Shares. Capitalized terms
        used herein that are not defined herein have the definitions ascribed to
        them in the Plan or the Grant.

2.      REPRESENTATIONS OF PURCHASER. Optionee represents and warrants to the
        Company that:

        (A)     Optionee has received, read and understood the Plan and the
                Grant and agrees to abide by and be bound by their terms and
                conditions.

        (B)     Optionee is capable of evaluating the merits and risks of this
                investment, has the ability to protect Optionee's own interests
                in this transaction and is financially capable of bearing a
                total loss of this investment.

        (C)     Optionee is fully aware of (i) the highly speculative nature of
                the investment in the Shares; (ii) the financial hazards
                involved; and (iii) the lack of liquidity of the Shares and the
                restrictions on transferability of the Shares (e.g., that
                Optionee may not be able to sell or dispose of the Shares or use
                them as collateral for loans).

        (D)     Optionee is purchasing the Shares for Optionee's own account for
                investment purposes only and not with a view to, or for sale in
                connection with, a distribution of the Shares within the meaning
                of the Securities Act of 1933, as amended (the "1933 Act").

        (E)     Optionee has no present intention of selling or otherwise
                disposing of all or

                                       16
<PAGE>   17

                any portion of the Shares.

3.      COMPLIANCE WITH SECURITIES LAWS. Optionee understands and acknowledges
        that the Shares have not been registered under the 1933 Act and that,
        notwithstanding any other provision of the Grant to the contrary, the
        exercise of any rights to purchase any Shares is expressly conditioned
        upon compliance with the 1933 Act and all applicable state securities
        laws. Optionee agrees to cooperate with the Company to ensure compliance
        with such laws. The Shares are being issued under the 1933 Act pursuant
        to [the Company will check the applicable box]:

1       the exemption provided by Rule 701;

1       the exemption provided by Rule 504;

1       Section 4(2) of the 1933 Act;

1       other: ______________________________________________________

4.      FEDERAL RESTRICTIONS ON TRANSFER. Optionee understands that the Shares
        must be held indefinitely unless they are registered under the 1933 Act
        or unless an exemption from such registration is available and that the
        certificate(s) representing the Shares will bear a legend to that
        effect. Optionee understands that the Company is under no obligation to
        register the Shares, and that an exemption may not be available or may
        not permit Optionee to transfer Shares in the amounts or at the times
        proposed by Optionee.

        (A)     RULE 144. Optionee has been advised that Rule 144 promulgated
                under the 1933 Act, which permits certain resales or
                unregistered securities, is not presently available with respect
                to the Shares and, in any event, requires that a minimum of one
                (1) year elapse between the date of acquisition of Shares from
                the Company or an affiliate of the Company and any resale under
                Rule 144. Prior to an initial public offering of the Company's
                stock, "nonaffiliates" (i.e., persons other than officers,
                directors and major shareholders of the Company) may resell only
                under Rule 144(k), which requires that a minimum of two (2)
                years elapse between the date of acquisition of Shares from the
                Company or an affiliate of the Company and any resale under Rule
                144(k). Rule 144(k) is not available to affiliates.

        (B)     RULE 701. If the exemption relied upon for exercise of the
                Shares is Rule 701, the Shares will become freely transferable,
                subject to limited conditions regarding the method of sale, by
                nonaffiliates ninety (90) days after the first sale of common
                stock of the Company to the general public pursuant to a
                registration statement filed with and declared effective by the
                Securities and Exchange Commission (the "SEC"), subject to any
                lengthier market standoff agreement contained in this

                                       17
<PAGE>   18

                Agreement or entered into by Optionee. Affiliates must comply
                with the provisions (other than the holding period requirements)
                of Rule 144.

5.      STATE LAW RESTRICTIONS ON TRANSFER. Optionee understands that transfer
        of the Shares may be restricted by applicable state securities laws, and
        that the certificate(s) representing the Shares may bear a legend or
        legends to that effect.

6.      MARKET STANDOFF AGREEMENT. Optionee agrees in connection with any
        registration of the Company's securities that, upon the request of the
        Company or the underwriters managing any public offering of the
        Company's securities, Optionee will not sell or otherwise dispose of any
        Shares without the prior written consent of the Company or such
        underwriters, as the case may be, for a period of time (not to exceed
        one hundred eighty (180) days) from the effective date of such
        registration as the Company or the underwriters may specify for employee
        shareholders generally.

7.      LEGENDS. Optionee understands and agrees that the certificate(s)
        representing the Shares will bear a legend in substantially the
        following forms, in addition to any other legends required by applicable
        law:

                "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
                UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND MAY
                NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
                HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE SECURITIES
                ACT OR, IN THE OPINION OF COUNSEL IN FORM AND SUBSTANCE
                SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH OFFER, SALE
                OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE
                THEREWITH."

8.      STOP-TRANSFER NOTICES. Optionee understands and agrees that, in order or
        ensure compliance with the restrictions referred to herein, the Company
        may issue appropriate "stop-transfer" instructions to its transfer
        agent, if any, and that, if the Company transfers its own securities, it
        may make appropriate notations to the same effect in its own records.

9.      TAX CONSEQUENCES. OPTIONEE UNDERSTANDS THAT OPTIONEE MAY SUFFER ADVERSE
        TAX CONSEQUENCES AS A RESULT OF OPTIONEE'S PURCHASE OR DISPOSITION OF
        THE SHARES. OPTIONEE REPRESENTS THAT OPTIONEE HAS CONSULTED WITH ANY TAX
        CONSULTANT(S) OPTIONEE DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE
        OR DISPOSITION OF THE SHARES AND THAT OPTIONEE IS NOT RELYING ON THE
        COMPANY FOR ANY TAX ADVICE. IN PARTICULAR, IF OPTIONEE IS AN INSIDER
        SUBJECT TO SECTION 16(b) OF THE SECURITIES EXCHANGE ACT OF 1934, AND IF
        THE OPTION BEING EXERCISED WAS GRANTED WITHIN THE PRECEDING SIX MONTHS,
        OPTIONEE

                                       18
<PAGE>   19

        REPRESENTS THAT OPTIONEE HAS CONSULTED WITH OPTIONEE'S TAX ADVISERS
        CONCERNING THE ADVISABILITY OF FILING A SECTION 83(b) ELECTION (the
        "ELECTION") WITH THE INTERNAL REVENUE SERVICE. IN THE EVENT THAT
        OPTIONEE MAKES AN ELECTION, OPTIONEE AGREES TO IMMEDIATELY SO NOTIFY
        COMPANY.

10.     ENTIRE AGREEMENT. The Plan and Grant are incorporated herein by
        reference. This Agreement, the Plan and the Grant constitute the entire
        agreement of the parties and supersede in their entirety all prior
        undertakings and agreements of the Company and Optionee with respect to
        the subject matter hereof, and are governed by California law except for
        that body of law pertaining to conflict of laws.

Submitted By:                               Accepted By:

OPTIONEE:
          ------------------------          ------------------------------------
               [print name]

                                            By:
----------------------------------              --------------------------------
               [signature]                  Its:
                                                --------------------------------

Dated:                                      Dated:
       ---------------------------                 -----------------------------

Address:
         -------------------------
         -------------------------
         -------------------------

                                       19<PAGE>   1
                                                                    EXHIBIT 10.1

                              EMPLOYMENT AGREEMENT

         This AGREEMENT is entered into as of November 10, 2000 (the "Effective
Date"), by and between Alex M. Leupp ("Executive") and 3dfx Interactive, Inc., a
California corporation (the "Company"). In consideration of the mutual covenants
and agreements hereinafter set forth, the parties agree as follows:

         1. Duties and Scope of Employment.

              (a) Position and Duties. For the term of his employment under this
Agreement, the Company agrees to employ Executive as its President and Chief
Executive Officer, reporting directly to the Board of Directors (the "Board").
Executive shall have such duties and authority as are commensurate with one
employed in the position of President and Chief Executive Officer, as may be
customarily incident to such position, and as may be assigned to Executive from
time to time. Executive shall diligently, to the best of his ability, and with
the highest degree of good faith and loyalty, perform all such duties incident
to his position and use his best efforts to promote the interests of the
Company.

              (b) Obligations to the Company. During the Employment Term,
Executive shall devote his full time and energy to the business of the Company
and shall not be engaged in any competitive business activity without the
express written consent of the Chairman of the Board. Executive shall comply
with the Company's policies and rules, as they may be in effect from time to
time during the term of his employment.

              (c) No Conflicting Obligations. Executive represents and warrants
to the Company that he is under no obligations or commitments, whether
contractual or otherwise, that are inconsistent with his obligations under this
Agreement. Executive represents and warrants that he will not use or disclose,
in connection with his employment by the Company, any trade secrets or other
proprietary information or intellectual property in which Executive or any other
person has any right, title or interest and that his employment by the Company
as contemplated by this Agreement will not infringe or violate the rights of any
other person or entity. Executive represents and warrants to the Company that he
has returned all property and confidential information belonging to any prior
employers.

         2. Term of Employment.

              (a) Basic Rule. The Company agrees to continue Executive's
employment, and Executive agrees to remain in employment with the Company, from
the Effective Date until the date when Executive's employment terminates
pursuant to Subsection 2(b) below (the "Employment Period"). Executive's
employment with the Company shall be "at will," which means that either
Executive or the Company may terminate Executive's employment at any time, for
any reason, with "Cause" or "Without Cause." Any contrary representations, which
may have been made to Executive shall be superseded by this Agreement. This
Agreement shall constitute the full and complete agreement between Executive and
the

<PAGE>   2

Company regarding the "at will" nature of Executive's employment, which may only
be changed in an express written agreement signed by Executive and the Chairman
of the Board.

              (b) Termination. The Company or Executive may terminate
Executive's employment at any time for any reason (or no reason), and with
"Cause" or "Without Cause," by giving the other party fourteen (14) days' notice
in writing. Executive's employment shall terminate automatically in the event of
his death.

         3. Cash and Incentive Compensation.

              (a) Base Salary. The Company shall pay Executive as compensation
for his services an annualized base salary of Three Hundred Seventy Five
Thousand Dollars ($375,000), less applicable deductions and withholdings,
payable in accordance with the Company's standard payroll schedule. The
compensation specified in this Subsection (a), together with any increases in
such compensation that the Company may grant from time to time, are referred to
in this Agreement as "Base Salary." The Base Salary will be reviewed at least
annually and shall be subject to change from time-to-time at the sole discretion
of the Compensation Committee of the Board.

              (b) Bonus. Executive will be eligible to earn an annualized bonus
(the "Target Bonus") for each fiscal year equal to at least fifty percent (50%)
of his Base Salary, less applicable deductions and withholdings. The Target
Bonus shall be based upon performance criteria to be established by the Board in
consultation with Executive. If any part of the Target Bonus is earned for a
given fiscal year, it will be paid on or before March 31 of the following fiscal
year.

              (c) Stock Options. As of the Effective Date of this Agreement,
Executive has been granted stock options pursuant to the Company's Stock Option
Plan (the "Plan"), which are summarized in Exhibit A to this Agreement (the
"Options"). Executive's Options shall continue to vest in accordance with the
Plan and the stock option agreements between the Company and Executive
evidencing such Options.

              (d) Vacation and Executive Benefits. During the term of his
employment, Executive shall be eligible for vacation each year, in accordance
with the Company's standard policy for senior executives, as it may be amended
from time to time. Executive shall be eligible during his employment term to
participate in any employee benefit plans generally available to the other
senior executives of the Company, subject in each case to the generally
applicable terms and conditions of the plan in question and to the
determinations of any person or committee administering such plan. The Company
reserves the right to amend, modify or terminate any employee benefits at any
time for any reason.

              (e) Business Expenses. During the term of his employment,
Executive shall be authorized to incur necessary and reasonable travel and other
business expenses in connection with his duties hereunder, pursuant to and
consistent with policies and procedures as established by the Company and as may
be modified from time-to-time. The Company shall reimburse Executive for such
expenses upon presentation of an itemized account and appropriate supporting
documentation, in accordance with Company policy and procedures.

                                       2
<PAGE>   3

         4. Payments, Benefits and Acceleration Following Termination.

              (a) Termination Following Change of Control. If, within one year
following a "Change of Control," Executive resigns for "Good Reason" or the
Company terminates Executive's employment "Without Cause," then Executive shall
receive:

                   (i) A lump sum severance payment equal to 1.25 times
         Executive's Base Salary, less applicable deductions and withholdings;

                   (ii) A lump sum payment equal to 1.25 times Executive's
         Target Bonus for the fiscal year in which Executive is terminated, less
         applicable deductions and withholdings;

                   (iii) Immediate vesting of the unvested shares under all
         outstanding stock options then held by Executive; and

                   (iv) Should Executive be eligible for and elect to continue
         his health insurance pursuant to COBRA, payment of COBRA premiums for
         fifteen (15) months following the termination date of Executive's
         employment.

              (b) Termination Outside Change of Control. Subject to Section 4(e)
of this Agreement, if the Company terminates Executive's employment "Without
Cause" when no Change of Control has occurred in the prior year, then Executive
shall receive:

                   (i) Base Salary continuation payments in accordance with the
         Company's standard payroll practices for a period of twelve (12) months
         following the termination of Executive's employment (the "Continuation
         Period");

                   (ii) Immediate vesting of all then unvested shares (if any)
         under Executive's "October 2000 Option," and, in the case of any
         outstanding stock option other than the October 2000 Option, immediate
         vesting of each outstanding stock option then held by Executive in an
         amount equal to the greater of: (1) fifty percent (50%) of the
         then-unvested shares under each of Executive's stock options; or (2)
         the number of shares that would have vested as if Executive had
         remained an employee through the Continuation Period; and

                   (iii) Should Executive be eligible for and elect to continue
         his health insurance pursuant to COBRA following the termination date,
         payment of COBRA premiums during the Continuation Period.

              (c) Resignation or Termination for "Cause." In the event that: (i)
Executive's employment is terminated by the Company at any time for "Cause;"
(ii) Executive resigns his employment for any reason when no Change of Control
has taken place within the prior twelve (12) months; or (iii) Executive resigns
his employment without "Good Reason" within twelve (12) months following a
Change of Control; then upon the termination of Executive's employment,
Executive will be paid his Base Salary and for all unused vacation earned
through the date of termination, but nothing else, and all stock vesting and
benefits will cease on Executive's date of termination.

                                       3
<PAGE>   4

              (d) Release Required. As a prior condition to Executive receiving
any payment, benefit or stock acceleration under Sections 4(a) and/or 4(b) of
this Agreement, Executive shall execute a full release of known and unknown
claims against the Company, its successors, affiliates, employees, agents,
advisors and representatives, in a form designated by the Company.

              (e) Condition of Non-competition.

                  (i) Termination Following a Change of Control. If required by
         a successor company, Executive will not engage in any Competitive
         Activity for a period of one (1) year following a Change in Control.

                  (ii) Termination Outside a Change of Control. During the
         Continuation Period Executive shall not engage in any "Competitive
         Activity" without first notifying the Company of the contemplated
         activity. Executive agrees that if there is any reasonable question
         regarding whether or not a contemplated activity would be a Competitive
         Activity, Executive will consult with the Board before engaging in the
         contemplated activity. The Compensation Committee of the Board will
         determine in its sole discretion whether the activity contemplated by
         Executive is a Competitive Activity and, if it so determines, Executive
         will forfeit his right to any and all continued payments and benefits
         under Section 4(b) of this Agreement if he proceeds to engage in the
         Competitive Activity during the Continuation Period.

              (f) Termination Due to Death or Disability. If Executive's
employment is terminated due to death or Disability, then Executive, or
Executive's estate, will receive: (i) payment for all Base Salary and accrued
but unused vacation earned through the date of termination; and (ii) a lump-sum
payment equal to the pro-rata portion of Executive's full Target Bonus, based on
Executive's length of service during the year in which Executive's employment is
terminated due to death or Disability.

              (g) Definitions.

                  (i) "Change of Control." For all purposes under this
         Agreement, "Change of Control" shall exist in any of the following
         circumstances:

                       (a)   the acquisition, directly or indirectly, by any
                             person or related group of persons (other than the
                             Company or a person that directly or indirectly
                             controls, is controlled by, or is under common
                             control with, the Company) of beneficial ownership
                             (within the meaning of Rule 13d-3 of the Securities
                             Exchange Act of 1934, as amended) of securities
                             possessing more than fifty percent (50%) of the
                             total combined voting power of the Company's
                             outstanding securities pursuant to a tender or
                             exchange offer made directly to the Company's
                             stockholders;

                       (b)   a change in the composition of the Board over a
                             period of thirty-six (36) consecutive months or
                             less such that a

                                       4
<PAGE>   5

                             majority of the Board members ceases by reason of
                             one or more contested elections for Board
                             membership, to be comprised of individuals who
                             either (A) have been Board members continuously
                             since the beginning of such period, or (B) have
                             been elected or nominated for election as Board
                             members during such period by at least a majority
                             of the Board members described in clause (A) who
                             were still in office at the time such election or
                             nomination was approved by the Board, or

                       (c)   a merger or consolidation in which securities
                             possessing at least fifty percent (50%) of the
                             total combined voting power of the Company's
                             outstanding securities are transferred to a person
                             or persons different from the persons holding those
                             securities immediately prior to such transaction,
                             or the sale, transfer or other disposition of all
                             or substantially all of the Corporation's assets in
                             complete liquidation or dissolution of the
                             Corporation.

                  (ii) "Good Reason." For all purposes under this Agreement,
         "Good Reason" for Executive's resignation will exist if he resigns
         within sixty (60) days of any of the following events: (1) any
         reduction in his Base Salary; (2) a change in his position with the
         Company or a successor company which substantially reduces his duties
         or level of responsibility; (3) any requirement that he relocate his
         place of employment by more than fifty (50) miles from his then current
         office, provided such reduction, change or relocation is effected by
         the Company without his written consent; or (4) a significant change in
         the Company's business direction affecting a substantial reduction in
         sales. . A resignation by Executive under any other circumstance or for
         any other reason will be a resignation without "Good Reason."

                  (iii) Termination for "Cause." For all purposes under this
         Agreement, a termination for "Cause" shall mean a termination of
         Executive's employment for any of the following reasons: (1)
         misconduct; (2) misappropriation of the assets of the Company; (3)
         conviction of, or a plea of "guilty" or "no contest" to a felony under
         the laws of the United States or any state thereof; (4) committing an
         act of fraud against, or the misappropriation of property belonging to,
         the Company; (5) a material breach of any confidentiality or
         proprietary information agreement between Executive and the Company; or
         (6) continued unsatisfactory performance after being given a written
         warning and at least thirty (30) days to improve performance. A
         termination of Executive's employment in any other circumstance or for
         any other reason will be a termination "Without Cause."

                  (iv) "Disability." For all purposes under this Agreement,
         "Disability" means Executive's inability to carry out his material
         duties under this Agreement for more than six (6) months in any twelve
         (12) consecutive month period as a result of incapacity due to mental
         or physical illness or injury.

                                       5
<PAGE>   6

                  (v) "Competitive Activity." For the purposes of this
         Agreement, a "Competitive Activity" means any activity in which
         Executive directly or indirectly provides services of any kind or
         nature (whether or not Executive is compensated for such services),
         including, but not limited to, Executive working in an employment,
         advisory or consulting capacity, for any Competitor of the Company.

                  (vi) "Competitor." For purposes of this Agreement,
         "Competitor" is defined as any company involved in the design and
         creation of 3D graphics, animation and/or effects for use in
         entertainment, or educational environments. Currently, the Competitor's
         list includes, but is not limited to, 3d Labs, ATI, Nvidia, S3, Maxtrox
         and any of their successors or affiliates. During the Continuation
         Period, the Company may reasonably add other companies to the
         Competitors list.

                  (vii) "October 2000 Option". For the purposes of this
         Agreement, Executive's "October 2000 Option" refers solely to that
         particular option to purchase 400,000 shares of Company Common Stock
         which was granted by the Board to Executive on October 13, 2000.

         5. Non-Solicitation and Non-Disclosure.

              (a) Non-Solicitation. During the period commencing on the
Effective Date of this Agreement and continuing until the second anniversary of
the date when Executive's employment terminates for any reason, Executive shall
not directly or indirectly, personally or through others, solicit or encourage,
or attempt to solicit or encourage (on Executive's own behalf or on behalf of
any other person or entity) for hire any employee or consultant of the Company
or any of the Company's affiliates.

              (b) Non-Disclosure. As a condition of employment, Executive will
execute the Company's standard Proprietary Information Agreement, a copy of
which is attached.

         6. Successors.

              (a) Company's Successors. This Agreement shall be binding upon any
successor (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/or assets. For all purposes under this Agreement, the
term "Company" shall include any successor to the Company's business and/or
assets which becomes bound by this Agreement.

              (b) Executive's Successors. This Agreement and all rights of
Executive hereunder shall inure to the benefit of, and be enforceable by,
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.

         7. Arbitration. Executive and the Company agree to arbitrate before a
neutral arbitrator any and all disputes or claims arising from or relating to
Executive's employment with the Company, or the termination of that employment,
including disputes or claims against any current or former agent or employee of
the Company.

                                       6
<PAGE>   7

              (a) Arbitrable Claims. Arbitrable disputes or claims include those
which arise in tort, contract, or pursuant to a statute, regulation, or
ordinance now in existence or which may in the future be enacted or recognized,
including, but not limited to, the following claims:

                  (i) claims for fraud, promissory estoppel, fraudulent
         inducement of contract or breach of contract or contractual obligation,
         whether such alleged contract or obligation be oral, written, or
         express or implied by fact or law;

                  (ii) claims for wrongful termination of employment, violation
         of public policy and constructive discharge, infliction of emotional
         distress, misrepresentation, interference with contract or prospective
         economic advantage, defamation, unfair business practices, and any
         other tort or tort-like causes of action relating to or arising from
         the employment relationship or the formation or termination thereof;

                  (iii) claims of discrimination, harassment, or retaliation
         under any and all federal, state, or municipal statutes, regulations,
         or ordinances that prohibit discrimination, harassment, or retaliation
         in employment, as well as claims for violation of any other federal,
         state, or municipal statute, regulation, or ordinance, except as set
         forth herein; and

                  (iv) claims for non-payment or incorrect payment of wages,
         commissions, bonuses, severance, employee fringe benefits, stock
         options and the like, whether such claims be pursuant to alleged
         express or implied contract or obligation, equity, the California Labor
         Code, the Fair Labor Standards Act, the Employee Retirement Income
         Securities Act, and any other federal, state, or municipal laws
         concerning wages, compensation or employee benefits.

              (b) Non-Arbitrable Claims. Executive and the Company further
understand and agree that the following disputes and claims are not covered by
the arbitration agreement contained in this Section 7 and shall therefore be
resolved as required by the law then in effect:

                  (i) claims for workers' compensation benefits, unemployment
         insurance, or state or federal disability insurance;

                  (ii) claims concerning the validity, infringement,
         enforceability, or misappropriation of any trade secret, patent right,
         copyright, trademark, or any other intellectual or confidential
         property held or sought by Employee or the Company; and

                  (iii) any other dispute or claim that has been expressly
         excluded from arbitration by statute.

              (c) Relief and Review. The Arbitrator shall have the authority to
award any relief authorized by law in connection with the asserted claims or
disputes and shall issue a written Award that sets forth the essential findings
and conclusions on which the Award

                                       7
<PAGE>   8

is based. The Arbitrator's Award shall be final and binding on both the Company
and Employee and it shall provide the exclusive remedy(ies) for resolving any
and all disputes and claims subject to arbitration under this Agreement. The
Arbitrator's Award shall be subject to correction, confirmation, or vacation, as
provided by California Code of Civil Procedure Section 1285.8 et seq and any
applicable California case law setting forth the standard of judicial review of
arbitration Awards.

              (d) Location and Rules. The arbitration shall be conducted in
Santa Clara County, California, or such location as is mutually agreeable to the
parties, in accordance with the National Rules for the Resolution of Employment
Disputes of the American Arbitration Association; provided, however, that the
Arbitrator shall allow the discovery authorized by California Code of Civil
Procedure Section 1283.05 or any other discovery required by California law.
Also, to the extent that any of the National Rules for the Resolution of
Employment Disputes or anything in this Agreement conflicts with any arbitration
procedures required by California law, the arbitration procedures required by
California law shall govern.

              (e) Costs and Attorneys' Fees. The Company will bear the
arbitrator's fee and any other type of expense or cost that Executive would not
be required to bear if he were free to bring the dispute(s) or claim(s) in court
as well as any other expense or cost that is unique to arbitration. Executive
and the Company shall each bear their own attorneys' fees incurred in connection
with the arbitration, and the arbitrator will not have authority to award
attorneys' fees unless a statute or contract at issue in the dispute authorizes
the award of attorneys' fees to the prevailing party, in which case the
arbitrator shall have the authority to make an award of attorneys' fees as
required or permitted by applicable law. If there is a dispute as to whether the
Company or Executive is the prevailing party in the arbitration, the Arbitrator
will decide this issue.

              (f) WAIVER OF RIGHT TO JURY. EXECUTIVE AND THE COMPANY UNDERSTAND
AND AGREE THAT THE ARBITRATION OF Disputes and claims under this Agreement shall
be instead of a trial before a court or jury or a hearing before a government
agency.

         8. Miscellaneous Provisions.

              (a) Notice. Notices and all other communications contemplated by
this Agreement shall be in writing and shall be deemed to have been duly given
when personally delivered or when mailed by overnight courier, U.S. registered
or certified mail, return receipt requested and postage prepaid. Mailed notices
shall be addressed to Executive at the home address which he most recently
communicated to the Company in writing. In the case of the Company, mailed
notices shall be addressed to its corporate headquarters, and all notices shall
be directed to the attention of its Secretary.

              (b) Modifications and Waivers. No provision of this Agreement
shall be modified, waived or discharged unless the modification, waiver or
discharge is agreed to in writing and signed by Executive and by an authorized
officer of the Company (other than Executive). No waiver by either party of any
breach of, or of compliance with, any condition or

                                       8
<PAGE>   9

provision of this Agreement by the other party shall be considered a waiver of
any other condition or provision or of the same condition or provision at
another time.

              (c) Whole Agreement. No other agreements, representations or
understandings (whether oral or written) which are not expressly set forth in
this Agreement have been made or entered into by either party with respect to
the subject matter of this Agreement. This Agreement, the Proprietary
Information Agreement, and applicable stock option agreements and stock plans,
contain the entire understanding of the parties with respect to the subject
matter hereof.

              (d) Taxes. All payments made under this Agreement shall be subject
to reduction to reflect taxes or other charges required to be withheld by law.

              (e) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California (except provisions governing the choice of law).

              (f) Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.

              (g) No Assignment. This Agreement and all rights and obligations
of Executive hereunder are personal to Executive and may not be transferred or
assigned by Executive at any time. The Company may assign its rights under this
Agreement to any entity that assumes the Company's obligations hereunder in
connection with any sale or transfer of all or a substantial portion of the
Company's assets to such entity.

              (h) 280G. Executive understands and acknowledges that certain
benefits provided for under this Agreement may constitute "parachute payments"
within the meaning of Section 280G of the Internal Revenue Code of 1986, as
amended, (the "Code"). Such parachute payments may be subject to the excise tax
imposed by Section 4999 of the Code. Executive acknowledges and agrees that he
has and will review any tax consequences which may arise as the result of any
such parachute payments with his own tax advisors and that he is relying and
will rely solely on such advisors and not on any representations of the Company
or any of its agent with regard to the possible tax implications of receiving
such parachute payments. Executive further acknowledges and agrees that he is
responsible for his own tax liability which may arise as the result of any such
payments.

              (i) Headings. The headings of the paragraphs contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of any provision of this Agreement.

              (j) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

                                       9
<PAGE>   10

         IN WITNESS WHEREOF, each of the parties has executed this Agreement, in
the case of the Company by its duly authorized officer, as of the day and year
first above written.

                                       EXECUTIVE

                                       /s/ ALEX M. LEUPP
                                       ------------------------------------
                                       Alex M. Leupp

                                       3DFX INTERACTIVE, INC.

                                       By: /s/ GORDON CAMPBELL
                                          ----------------------------------
                                          Gordon Campbell
                                          Chairman of the Board

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