Sample Business Contracts

Separation Agreement - 3dfx Interactive inc. and Gary Martin

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October 12, 1997

Gary Martin

Re: Separation Agreement

Dear Gary:

     This letter, upon your signature, will constitute the entire agreement
(the "Separation Agreement") between you and 3Dfx Interactive, Inc. ("3Dfx" or
the "Company") on the terms of your separation from employment with 3Dfx and
will supersede any prior agreements or understandings, written or oral. This
Separation Agreement may be modified only by a written document signed by you
and an authorized 3Dfx officer.

     1. Your period of active employment will end the sooner of (i) December
31, 1997 or (ii) until you are replaced by the Company's new Chief Financial

     2. As new consideration, and in exchange for the mutual promises made in
this agreement, you will receive the following:

     (a) You will remain on regular employee status and be paid at the
compensation rate of $8,126 per bi-weekly pay period for a four month period
starting from the sooner of (i) January 1, 1998. (ii) your replacement by the
Company's new Chief Financial Officer or (iii) such date you commence other
full time employment by another entity.

     (b) Following termination of your period of active employment on active
employee status, you will be placed on temporary employee status through August
1, 2000 (the "Continuation Period"). You will continue to receive regular 3Dfx
provided medical insurance from January 1, 1998 through December 31, 1998. On
your final date of employment termination, you will be paid all wages and
accrued Personal Time Off ("P.T.O"). You will not accrue P.T.O. during the
Continuation Period.

     (c) All stock options granted to you pursuant to the Company Employee
Stock Plan will continue to vest during the Continuation Period. As
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Gary Martin
September 12, 1997
Page 2

of January 1, 1998, our records indicate that you will be fully vested with
respect to options to purchase 83,810 shares of Common Stock with an additional
57,240 shares subject to vesting.

     (d)  In the event of a Change in Control and notwithstanding anything in
the Agreements or any stock option agreements to the contrary, the Company
hereby agrees (i) to waive its right to repurchase any unvested shares which
you may have purchased and to release such shares from the repurchase option
and (ii) accelerate the vesting of all stock options granted to you pursuant to
the Company's Employee Stock Plan. For the purposes of this Section 2(d)
"Change in Control" means the occurrence of any of the following events:

               (A)  Any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended), excluding existing
beneficial owners as of the date of this Separation Agreement, is or becomes
the "beneficial owner" (as defined in Section 13d-3 of 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;

               (B)  The shareholders 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) at least 50% of the total voting power represented by the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the shareholders 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 of the
Company's assets;

               (C)  Any other provision of this subsection notwithstanding, the
term Change in Control shall not include either of the following events
undertaken at the election of the Company:
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Gary Martin
September 12, 1997
Page 3

               (i)  Any transaction, the sole purpose of which is to change the
state of the Company's incorporation; or

               (ii) A transaction, the result of which is to sell all or
substantially all of the assets of the Company to another corporation (the
"surviving corporation") provided that the surviving corporation is owned
directly or indirectly by the shareholders of the company immediately following
such transaction in substantially the same proportions as their ownership of
the Company's common stock immediately preceding such transaction.

     3.   You will promptly return to 3Dfx on or before December 31, 1997 any
information in tangible form you have about 3Dfx's practices, procedures, trade
secrets, customer lists, product marketing, or any 3Dfx property in your
possession or control.

     4.   In exchange for the various items of new consideration described
above, to which you are not otherwise entitled, you waive and release and
promise never to assert any and all claims that you have or might have against
3Dfx and its predecessors, subsidiaries, related entities, officers,
directors, shareholders, agents, attorneys, employees, successors, or assigns,
arising from or related to your employment with 3Dfx and/or the termination of
your employment with 3Dfx.

     These claims include, but are not limited to, claims arising under
federal, state and local statutory or common law, such as the Age
Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964,
the California Fair Employment and Housing Act, the California Labor Code, and
the law of contract and tort.

     You also waive and release and promise never to assert any such claims,
even if you do not believe that you have such claims. You therefore waive your
rights under section 1542 of the Civil Code of California which states:

          A general release does not extend to claims which the creditor does
     not know or suspect to exist in his favor at the

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Gary Martin
September 12, 1997
Page 4

        time of executing the release, which if known to him must have
        materially affected his settlement with the debtor.

        6.  You will not, unless required or otherwise permitted by law,
disclose to others any information regarding the terms of this Separation
Agreement, the benefit being paid under it or the fact of its payment, except
that you may disclose this information to your immediate family with a need to
know, or to your attorney, accountant or other professional advisor to whom you
must make the disclosure in order for them to render professional services to
you. You will instruct them, however, to maintain the confidentiality of this
information just as you must.

        7.  You have up to 21 days from the date of this letter to accept the
terms of this Separation Agreement, although you may accept it at any time
within those 21 days. You are advised to consult an attorney about the

        8.  You acknowledge and reaffirm that all of your duties under the 3Dfx
Employee Confidential Information and Inventions Agreement, which you signed on
[Date] continue as stated therein.

        9.  In the event of a breach of any obligations under this Separation
Agreement or as otherwise imposed by law, the aggrieved party shall be entitled
to all relief provided by law or equity.

        To accept the agreement, please date and sign this letter and return it
to me within one week of the date of this letter; otherwise, this offer will
expire. (An extra copy for your files is enclosed.) Once you do so, you will
still have an additional seven days in which to revoke your acceptance. To
revoke, you must send me a written statement of revocation. If you do not

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Gary Martin
September 12, 1987
Page 5

revoke, the eighth day after the date of your acceptance will be the "effective
date" of the agreement.

     I am pleased that we were able to reach agreement on these amicable terms.


Greg Ballard
President, 3Dfx Interactive, Inc.


     By signing this letter, I acknowledge that I have reviewed this Separation
Agreement carefully with an attorney of my choice, that I understand the terms
of the agreement, and that I voluntarily agree to them.

Dated:   10-14-97

       /s/GARY MARTIN
       Gary Martin