EXHIBIT 10.2

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

     THIS AGREEMENT by and between Hendrik A. Hanselaar (the "Executive") and
DIVA Systems, a Delaware corporation (the "Company"), effective as of September
1, 2000, (the "Effective Date"). The first date of employment shall be September
8, 2000 (the "Commencement Date").

     In consideration of the mutual covenants herein contained, and in
consideration of the employment of Executive by the Company, the parties agree
as follows:

     1.   Duties and Scope of Employment.

          (a)  Position.  The Company agrees to employ the Executive under the
terms of this Agreement in the position of President and Chief Executive
Officer. Executive will report only to the Board of Directors (or committees
thereof) or the Chairman of the Board and to no other individual executive
officers of the Company.

         (b)  Obligations.  During the term of this Agreement, the Executive
shall devote Executive's full business efforts and time to the Company.  The
foregoing, however, shall not preclude the Executive from engaging in civic,
charitable or religious activities or from devoting a reasonable amount of time
to private investments, as long as such activities and service do not materially
interfere or conflict with Executive's responsibilities to the Company and do
not represent business conflicts with the Company's business.

         (c)  Company Policies.  Executive shall comply with all of the
Company's rules and regulations applicable to the executives of the Company and
with all of the Company's policies applicable to the executives established by
the Board of Directors.

         (d)  Director Position.  Executive shall be appointed to the Board of
Directors of the Company promptly following the Commencement Date and shall be
nominated by the Company for reelection as a director at each meeting of the
stockholders at which directors are elected.  Executive agrees to resign from
the Board of Directors in the event he ceases to hold the offices of President
and Chief Executive Officer.

     2.   Base Compensation and Bonuses.

         (a)  Base Compensation.  Beginning on the Effective Date, the
Executive shall be paid a base salary (the "Base Compensation") of $350,000
annually, payable semi-monthly. The Base Compensation shall be subject to review
annually for increases by the Board of Directors in its discretion in connection
with the annual review of salary and benefits for the Company's management.



          (b)  Bonus. Executive shall be entitled to an annual performance bonus
based on meeting or exceeding annual goals to be agreed to with the Board of
Directors. The maximum bonus as a percentage of Base Compensation shall be 200%.
Up to one-hundred percent (100%) of the Bonus will be based on specific targets
(the "Targets") and the remaining one-hundred percent (100%) will be at the
discretion of the Board of Directors.

     The Targets, to be completed by the end of the fiscal year on June 30,
2001, are as follows:

               (i)  signing a VOD deployment agreement with AT&T Corporation
                    covering a minimum of three (3) markets;

               (ii) signing a VOD deployment agreement with Comcast Corporation
                    covering a minimum of three (3) markets;

               (iii) concluding a joint venture agreement to form Guideco with a
                    minimum of three (3) MSOs. For the purposes of this Section
                    2(b)(iii), "MSO" shall mean each of Comcast Corporation, Cox
                    Communications, Inc., Charter Communications Holding
                    Company, LLC and Adelphia Communications Corporation;

               (iv) presenting to the Board of Directors a revised business plan
                    that is subsequently accepted by the Board of Directors;

               (v)  completing the initial public offering ("IPO") of the
                    capital stock of the Company or strategic transaction
                    acknowledged by the Board to be equivalent to an IPO; and

               (vi) signing VOD deployment agreements with a minimum of six (6)
                    of ten (10) Specified MSOs covering VOD deployment in at
                    least one system. For the purposes of this Section 2(b)(vi),
                    the "Specified MSOs" shall consist of (i) the seven (7)
                    largest domestic MSOs,(ii) Insight Communications Co. L.P.,
                    (iii) ntl Incorporated, and (iv) United Pan-Europe
                    Communications N.V.

     In the last month of each fiscal year the Board of Directors will determine
in its discretion the amount of the bonus payable to Executive on the basis of
performance against the Targets and additional goals established mutually by
Executive and the Board. The determination of the achievement of the Targets and
additional goals shall be made by the Board of Directors in its sole discretion,
which discretion shall be exercised by considering, among other things, the
changing business of the Company and the capital market environments.
Additionally, from time to time, the Board may in its discretion grant
additional long-term incentives to Executive.

          (C)  Acceptance Bonus.  The Company will pay to Executive within ten
days from the Commencement Date a one time acceptance bonus of $350,000 (the
"Acceptance Bonus"), which shall be in addition to any other salary or bonus due
to Executive. Executive

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agrees to repay the Acceptance Bonus to the Company if Executive terminates his
employment with Company for any reason other than a Constructive Termination,
Disability or death prior to April 1, 2001. Such repayment shall be made within
thirty (30) days after such termination.

     3.   Definitions. As used herein, the following definitions shall apply:

         (a) "Cause" shall mean the termination of employment of Executive as a
result of (i) Executive's continued material failure to substantially perform
Executive's principal duties and responsibilities (other than as a result of
Disability or death) after thirty (30) days written notice from the Company
specifying the nature of Executive's failure and demanding that such failure be
remedied; (ii) Executive's material and continuing breach of his obligations to
the Company set forth in this Agreement, the Confidentiality Agreement (as
defined herein), or any written policy of the Company applicable to all officers
after thirty (30) days written notice from the Company specifying the nature of
Executive's breach and demanding that such breach be remedied (unless such
breach by its nature cannot be cured, in which case notice and an opportunity to
cure shall not be required); (iii) Executive's being convicted of a felony; or
(iv) act or acts of dishonesty undertaken by Executive and intended to result in
substantial gain or personal enrichment of Executive at the expense of the
Company.

         (b) "Constructive Termination" shall mean a termination of employment
due to any of the following, unless agreed to by Executive in writing: (i) a
reduction in Executive's salary or benefits (except in connection with a
decrease to be applied pro rata to all Senior Executives of the Company because
the Company's performance has decreased, and excluding the substitution of
substantially equivalent compensation and benefits); (ii) a material diminution
of Executive's responsibilities (e.g., title, primary duties, resources); (iii)
relocation of Executive by the Company to a location more than 50 miles from
Redwood City, California; (iv) the failure of Executive to be elected as a
director, or removal of Executive as a director, of the Company at any time when
the Company is obligated to nominate Executive for election as a director under
Section 1(d) of this Agreement; (v) failure of a successor to assume and perform
under this Agreement; or (vi) a material breach of this Agreement or any Stock
Option Agreement by the Company not cured within fifteen (15) days after written
notice from Executive specifying the nature of the Company's breach and
demanding that such breach be remedied.

         (c) "Disability" shall mean that the Executive, at the time notice is
given, has been unable to perform Executive's material duties under this
Agreement for a period of not less than ninety (90) days consecutively as the
result of Executive's incapacity due to physical or mental illness. In the event
that the Executive resumes the performance of substantially all of Executive's
duties hereunder within ninety (90) days of the commencement of leave before the
termination of employment under Section 6(b)(iii) becomes effective, the notice
of termination shall automatically be deemed to have been revoked. This
paragraph will be enforced in compliance with the Americans with Disabilities
Act.

         (d) "Change of Control" shall mean the occurrence of any of the
following events:

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         (i)      Any "person" or "group of persons" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended and
the Rules thereunder) is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under said Act), directly or indirectly, of securities of the Company
representing 50% or more of the total voting power represented by the Company's
then outstanding voting securities; or

         (ii)     A change in the composition of the Board of Directors of the
Company as a result of which fewer than a majority of the directors are
"Incumbent Directors." "Incumbent Directors" shall mean directors who either (A)
are directors of the Company as of the date hereof, or (B) are elected, or
nominated for election, to the Board of Directors with the affirmative votes
(either by a specific vote or by approval of the proxy statement of the Company
in which such person is named as a nominee for election as a director without
objection to such nomination) of at least three-quarters of the Incumbent
Directors at the time of such election or nomination (but shall not include an
individual whose election or nomination is in connection with an actual or
threatened proxy contest relating to the election of directors of the
Company); or

         (iii)    The stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than fifty percent (50%) of the total voting power
represented by the voting securities of the Company, such surviving entity or
the entity that controls such surviving entity outstanding immediately after
such merger or consolidation, or the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's assets.

     4.       Executive Benefits.

             (a)  General.  Executive shall be entitled to participate in
pension plans, savings or profit-sharing plans, deferred compensation plans,
supplemental retirement or all excess-benefit plans, stock option, incentive or
other bonus plans, life, disability, health, accident and other insurance
programs, paid time off (which will accrue for the Executive at a rate of .833
days per pay period beginning on the effective date of this Agreement), a car
mileage allowance for business mileage and similar plans or programs made
available to executives of the Company, subject in each case to the generally
applicable terms and conditions of the plan or program and the decision of the
Board of Directors or administrators of such plan.

             (b)  Stock Awards.

         (i) Stock Options. The Executive shall be granted three stock options
(collectively the "Options") to purchase shares of Common Stock of the Company
effective as of the Commencement Date, pursuant to Stock Option Agreements in
the form of Exhibit A hereto.  All such Options shall be non-qualified options.
The first option shall be for 1,000,000 shares

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and shall have an exercise price of $4.50 per share (the "First Option"). The
second option shall be for 1,000,000 shares and shall have an exercise price of
$6.00 per share (the "Second Option"). The third option shall be for 500,000
shares and shall have an exercise price of $8.00 per share (the "Third Option").
Each Option shall be exercisable cumulatively to the extent of twelve and
one-half percent (12.5%) of the total number of shares subject to the Options
six (6) months after the Commencement Date, and an additional six and
one-quarter percent (6.25%) of the total shares subject to the Options at the
end of each three (3) month period thereafter subject to continued employment.
The Options shall have a term of ten (10) years. Executive will be eligible to
receive additional grants in the discretion of the Company's Board of Directors.

               (ii)  Vesting Acceleration After Change of Control. The Options
shall become fully exercisable on the earlier of six (6) months from the date of
the Change of Control or the termination of Executive's employment by the
Company after the date of the Change of Control without Cause or Constructive
Termination as provided in the Stock Option Agreements.

               (iii) Existing Consulting Stock Options. Executive and Company
are parties to a Consulting Services Agreement dated as of August 1, 1999 (the
"Consulting Agreement"), pursuant to which Executive was granted the option to
purchase 30,000 shares of the Company's common stock at an exercise price of
$3.35. This option is a non-qualified option granted pursuant to the Company's
1995 Option Plan. As of the effective date of this Agreement, 6,000 options had
vested (the "Vested Options"). The 24,000 non-vested options granted under the
Consulting Agreement shall be terminated as of September 1, 2000, and the Vested
Options shall remain exercisable until 90 days after termination of Executive's
employment for any reason.

          (c)  Relocation Benefits. The Company will reimburse the Executive for
costs associated with travel from San Francisco Bay area (the "Bay Area") to
Rancho Santa Fe, California on weekends and for the cost of renting an apartment
(including utilities) in Redwood Shores, California.  All reimbursement for
relocation benefits shall be in accordance with customary and comparable
industry standards.

     5.   Business Expenses and Travel and Office Space. During the term of
Executive's employment under this Agreement, Executive shall be authorized to
incur necessary and reasonable travel, entertainment and other business expenses
in connection with his duties hereunder. The Company shall reimburse Executive
for such expenses upon presentation of an itemized account and appropriate
supporting documentation, all in accordance with the Company's generally
applicable policies.

     6.   Term of Employment.

          (a)  Basic Rule. The Company agrees to continue Executive's
employment, and Executive agrees to remain in the employ of the Company, during
the term of this Agreement pursuant to the provisions of this Agreement,
provided that Executive's employment is expressly at will.


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     (b) Termination by the Company. The Company may terminate Executive's
employment at any time, for any reason or no reason, with thirty (30) days
advance notice in writing.

          (i) Termination Without Cause. If the Company terminates Executive's
employment during the term of this Agreement for any reason whatsoever,
including a Constructive Termination, and other than voluntary termination of
employment or Termination for Cause, the provisions of Section 7(a) shall apply.

          (ii) Termination for Cause. If the Company terminates Executive's
employment for Cause during the term of this Agreement, the provisions of
Section 7(b) shall apply.

          (iii) Termination on Death or Disability. If Executive's employment is
terminated as a result of Executive's death or the Company terminates
Executive's employment as a result of Disability, the provisions of Section 7(c)
shall apply.

     (c) Voluntary Termination by the Executive. The Executive may terminate
Executive's employment voluntarily by giving the Company thirty (30) days
advance notice in writing, at which time the provisions of Section 7(b) shall
apply. However, if the Executive terminates Executive's employment pursuant to
this Section 6(c) as a result of the occurrence of any of the events set forth
in the definition of a Constructive Termination, the provisions of Section 7(a)
shall apply, provided the Executive has provided written notice to the Company
reasonably specifying the reasons why one of such events in the definition of a
Constructive Termination has occurred and the Company has not cured such event
within thirty (30) days after receipt of such notice.

     (d) Waiver of Notice. Any waiver of notice shall be valid only if it is
made in writing and expressly refers to the applicable notice requirement in
this Section 6.

     7.   Payments Upon Termination of Employment.

          (a) Payments Upon Termination Pursuant to Section 6(b)(i) and
Constructive Termination. If, during the term of this Agreement, the Executive's
employment is terminated by the Company pursuant to Section 6(b)(i) or
voluntarily by the Executive under Section 6(c) as a result of a Constructive
Termination, the Executive, in addition to any other amounts specified herein,
shall be entitled to receive the following:

               (i) Severance Payment. The Company shall pay to the Executive the
following amount (the "Severance Payment"):

                    (1) If the termination occurs prior to September 1,
2002, the difference between the aggregate base salary paid as of the date of
termination, and the aggregate base salary that would have been paid if
Executive's employment had continued through August 31, 2003; and


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                    (2) If the termination occurs on or after September 1, 2002,
two year's base salary.

               (ii) Method of Payment.  The Severance Payment shall be paid in a
lump sum within ten (10) days after such termination.

               (iii) Health and Welfare Benefits.  The Company shall continue
to provide health and welfare benefits to Executive for twelve (12)
months after termination.  Such benefits will be discontinued to the extent that
Executive receives similar benefits in connection with new employment.

               (iv) Payment in Lieu of Contract Damages.  The Severance Payment
shall be in lieu of any further payments to the Executive and any further
accrual of benefits with respect to periods subsequent to the date of the
employment termination.

               (v) No Duty to Mitigate; No Payment Offset.  The Executive shall
not be required to mitigate the amount of any payment contemplated by this
Section 7(a) (whether by seeking new employment or in any other manner) and the
Severance Payment shall not be reduced by the amount of any other compensation
earned or received by Executive after termination of this Agreement.

          (b) Termination By Company for Cause or Voluntary Termination.  If the
Executive's employment is terminated pursuant to Section 6(b)(ii) or voluntarily
(other than a Constructive Termination) pursuant to Section 6(c), no
compensation or payments will be paid or provided to Executive for the periods
following the date when such a termination of employment is effective.
Notwithstanding the preceding sentence, Executive's rights under the benefit
plans referred to in Section 4(a) and Option agreements of the Company shall be
determined under the provisions of those plans and agreements, provided
Executive shall be entitled to exercise any stock options only to the extent
such Options are exercisable as of the date of termination and only within the
time period specified in the Option Agreements and Executive's rights under
Section 4(b)(iii) shall be determined pursuant to such section.

          (c) Termination on Death or Disability.  If Executive's employment is
terminated because of Executive's death or Disability (as defined in Section
3(c) herein), then no payments shall be owed under this Agreement and Executive
shall receive severance and disability payments as provided in the Company's
standard benefit plans, provided that in the event of Executive's Disability
Executive, and in the event of Executive's death Executive's successors, shall
be entitled to exercise the rights set forth in Section 4(b) (iii) to the extent
Executive could have exercised such rights. Executive's Options shall be
exercisable as provided in such agreements in each case to the extent such
Options are exercisable as of the date of termination. Executive shall also be
entitled to amounts and benefits under the Company's other benefit plans
referred to in Section 4(a) in accordance with the terms thereof.

          (d) Adjustment Upon Change of Control For Excise Tax.  Notwithstanding
any other provision of this Agreement, if a termination of employment occurs and
as a result

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Executive is subject to any Federal excise tax imposed pursuant to Section 4996
of the Internal Revenue Code (or any successor provision), Employee's Severance
Payment and acceleration of vesting of Options shall be reduced to the extent
necessary if Employee would receive a greater after tax benefit as a result of
any such excise tax than if Employee receives full payment of the Severance
Payment and full acceleration of all such Options.  Any such reduction shall be
applied first to the Severance Payment, and then to acceleration of the Third
Option, then to acceleration of the Second Option and then to acceleration of
the First Option.  Employee shall be responsible for payment of any excise tax.

          (e) Adjustment at Discretion of Board of Directors. If Executive's
employment is terminated, the Board of Directors will, in its discretion, review
the Severance Payment and, if the Board deems it to be in the best interests of
the Company and the Company's stockholders, increase the amount of the Severance
Payment.

     8. Proprietary Information. The Executive agrees to comply fully with the
Company's policies relating to non-disclosure of the Company's trade secrets and
proprietary information and processes, as set out in the Confidentiality
Agreement set out as Exhibit B hereto (the "Confidentiality Agreement").

     9.  Successors.

          (a) Company's Successors.  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/or assets shall assume this Agreement in writing and agree expressly to
perform this Agreement in the same manner and to the same extent as the Company
would be required to perform it in the absence of a succession and provided that
the Company shall remain obligated under this Agreement to the extent such
successor does not perform such Agreement.  For all purposes under this
Agreement, the term "Company" shall include any successor to the Company's
business and/or assets which executes and delivers the assumption agreement
described in this subsection (a) or which becomes bound by this Agreement or by
operation of law.

          (b) Executive's Successors.  This Agreement and all rights of the
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.

     10.  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 five days after being mailed by first class mail,
return receipt requested and postage prepaid.  In the case of the Executive,
mailed notices shall be addressed to Executive at the home address which
Executive 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 Chairman of the Board
and to its General Counsel.


                                       -8-



     11. Non-Solicitation. For a period of twelve (12) months following the
Effective Date, Executive shall not intentionally or knowingly allow others
under his direction to, solicit, directly or indirectly, any then current
Company employee to terminate his or her employment with the Company for the
purpose of working as an officer, director, employee, consultant or in any other
capacity for either Executive or any of his employers. For purposes of the
above, an employer of Executive's will be deemed to include (i) any parent or
subsidiary of such an employer or (ii) any person or company for which Executive
provides consulting services or for which he acts in the capacity of director.
The foregoing shall not prohibit Executive or any employee with which Executive
may be affiliated from hiring an employee or former employee of the Company;
provided that such hiring results from such employee's initiative in contacting
Executive or any employer Executive is affiliated with. In addition, if
Executive or such employer desires to hire such employee after such contact,
Executive agrees to contact the Company and to work with the Company to find a
reasonable transition to enable the Company to replace such employee or modify
the organization, provided such transition shall not exceed three (3) months.

     12. Miscellaneous Provisions.

         (a) Waiver. 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 the Executive and an officer or a director of the Company
authorized by the Board of Directors. No waiver by either party of any breach
of, or of compliance with, any condition or 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.

         (b) Whole Agreement. No agreements, representations or understandings
(whether oral or written and whether express or implied) which are not expressly
set forth in this Agreement and the Stock Option Agreements attached hereto as
Exhibit A and the Confidentiality Agreement attached hereto as Exhibit B have
been made or entered into by either party with respect to the subject matter
hereof. This Agreement supersedes and replaces any and all previous agreements
between the Executive and the Company regarding compensation or terms of
employment. The Executive hereby represents that the Company has satisfied in
full any compensation or other employment obligations due Executive under any
written or oral employment agreements by and between the Executive and the
Company.

         (c) Choice of Law.  The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
California without regard to conflict of laws.

         (d) 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.

         (e) Arbitration.  Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration
before a panel of three arbitrators

                                       -9-


in San Mateo County, California, in accordance with the rules of the American
Arbitration Association then in effect.  One arbitrator shall be selected by the
Company and one arbitrator shall be selected by Executive within thirty (30)
days notice to the other and the third arbitrator shall be selected jointly by
the other two arbitrators within thirty (30) days thereafter.  The arbitrators
shall be entitled to award costs in their discretion.  Judgment may be entered
on the arbitrator's award in any court having jurisdiction.

          (f) No Assignment of Benefits. The rights of any person to payments or
benefits under this Agreement shall not be made subject to option or assignment,
either by voluntary or involuntary assignment or by operation of law, including
(without limitation) bankruptcy, garnishment, attachment or other creditor's
process, and any action in violation of this subsection (f) shall be void.

          (g) Limitation of Remedies. If the Executive's employment terminates
for any reason, the Executive shall not be entitled to any payments, benefits,
damages, awards or compensation other than as provided by this Agreement as a
result of such termination.

          (h) Employment Taxes. All payments made pursuant to this Agreement
will be subject to withholding of applicable taxes.

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

          (j) Representation by Counsel. Executive represents that Executive has
had the opportunity to seek legal counsel and has been represented by
independent legal counsel in connection with entering into the Agreement.

          (k) Press Release. Executive shall be entitled to approve the contents
of any press release announcing Executive's joining or leaving the Company, such
consent not to be unreasonably withheld and subject to any legal obligation of
the Company to make a public announcement.

          (l) Indemnification and Insurance. The Company shall enter into its
standard director and officer indemnification agreement with Executive, which
shall be no less favorable than that provided to any other senior executive.
Executive shall be included in any director and officer liability insurance
policy obtained by the Company during the term of this Agreement.

          (m) Other.  Any amounts which the Company owes Executive hereunder
will increase at the rate of 15% per annum as liquidated damages for the failure
to make such payments when due, such increase to accrue from the date such
amounts are due until such amounts are paid in full.  The Company agrees that it
will reimburse Executive for all reasonable attorneys' fees and expenses
Executive may incur in connection with enforcing his rights under this
Agreement, whether or not suit is actually brought thereon.


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          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.




                                               DIVA SYSTEMS CORPORATION





  /s/ Hendrik A. Hanselaar                   By:  /s/ Paul Cook
  ---------------------------------             -----------------------------
  Hendrik A. Hanselaar                          Paul Cook, Chairman of the Board





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