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Employment Agreement [Amendment] - Media Arts Group Inc. and Kenneth E. Raasch

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On January 1, 1994, Media Arts Group, Inc. ("Employer") and Kenneth E. Raasch
("Employee") entered into an employment agreement ("Employment Agreement"),
which is attached hereto.  The Employment Agreement, except as modified below,
shall be incorporated by reference into and made part of this Amendment as if
written directly into this Amendment.  Employer and Employee now wish to amend
the Employment Agreement as follows:


Shall be amended to REPLACE "President and Chief Executive Officer" with
"Chairman of the Board".


Shall be amended to REPLACE entire section with the following language:

It is agreed that Employee is employed on a full-time basis, which is defined to
mean Employee's entire productive time, ability and attention.  It is further
agreed that for so long as the Employee is employed with the Employer, Employee
shall not engage in any other business duties or pursuits without the express
written consent of the Board.  In his capacity as Chairman of the Board,
Employee shall have such duties and responsibilities as listed below:

   a.   Represent the Corporation externally to the investment banking
        community, analysts, banks, investors, industry and government groups,
        public relations, etc .;

   b.   Be responsible for overseeing new business development, new channel
        development and licensing, as directed by the Board of Directors;

   c.   Coordinate the day-to-day activities of the Board of Directors;

   d.   Be the Corporation's spokesperson for the business and financial
        opportunities the Corporation creates;

   e.  Provide strategic input in formulating the Business Plan;

   f.   Help Thomas Kinkade in any way to accomplish his goals internally
        and externally;

   g.   Lead negotiations on an as-appropriate basis and execute
        appropriate documentation

   h.   Be available in areas where the Chief Executive Officer and
        President requests his experience and expertise, and in this
        capacity, seek only to be a support as any other Board member

In addition, Employee shall perform such other duties and responsibilities as
the Board shall designate as are not inconsistent with Employee's position with
the Employer, including the performance of duties with respect to any
subsidiaries of the Employer.

Employee shall at all times perform the duties set forth herein faithfully,
industriously, and to the best of Employee's ability, experience and talent.




Shall be amended to REPLACE "principal executive offices" with "New Business
Development offices, currently located at 333 W. Santa Clara Street, Suite 1000,
San Jose, CA  95113".


The title of this section shall be amended to REPLACE entire title with the

Further, this section of the Employment Agreement shall be amended to REPLACE
sections 5(c)(i) and 5(c)(ii):

(i)   An Earnings Per Share (EPS) Bonus based on the annual growth in EPS for
      the fiscal year over the Base EPS.  Base EPS is defined as the prior
      fiscal year published EPS.  Base EPS for year one (Fiscal 1998) will be
      $0.30.  A predetermined cash bonus will be paid if established levels of
      published EPS growth are achieved.  The cash bonus amounts are equivalent
      to approximately 15% of the growth in net income, measured in 10%
      increments of EPS growth.  This bonus will be paid twice per year based on
      the year to date performance in comparison to the Employer's business

(ii)  A Trailing Twelve Months (TTM) Bonus, contingent upon continued employment
      and paid pro-rata every pay period during the following fiscal year.  The
      bonus will be cumulative and equal to a) the prior year TTM Bonus plus b)
      the annual growth rate of the published EPS for the fiscal year times the
      sum of i) the base salary plus ii) the prior year TTM Bonus paid during
      the fiscal year.  In the event that EPS growth is negative, it will result
      in a negative adjustment to the prior year TTM bonus, but not below the
      base salary amount.

(iii) A New Business Bonus equal to 5% of the operating income contributed by
      the New Business venture before reduction by this bonus.  The New Business
      Bonus is subject to the following criteria:

      A.  The Pro Forma will be based on the Business Plan projected P&L ratios
          for the year, adjusted either positively or negatively for major
          functional areas of operating expenses which may be used or not used
          in the new business.

      B.  The bonus will be paid based upon actual results with an updated Pro
          Forma for significant changes in circumstances, which will include the
          (i)    Actual sales and returns;
          (ii)   Standard costs of goods adjusted for actual variances, whether
                 positive or negative;
          (iii)  The addition or deletion of significant costs attributable to
                 operating expenses of the major functional areas used in the
                 new business;
          (iv)   An allocation of interest and other direct financing costs
                 based upon the average period of unrecovered costs;
          (v)    Other significant changes in circumstances

(iv)  A Debt Bonus as an incentive to retire Employer's senior subordinated debt
      as quickly as possible.  To the extent that the Employer prepays principal
      installments to Levine Leichtman Capital Partners, L.P., Employee will
      receive 50% of the interest saved as a result of such prepayment.



(v)   If Employer achieves the business plan projection in fiscal year 1998, and
      realizes a 20% or a 40% growth rate the following two years, ignoring the
      possibility of growth in New Business Bonus, Employee's compensation under
      the above plan would be as follows:

      (Tables below in 000's)

                                 Fiscal Year     Fiscal Year    Fiscal Year
      20% Growth                    1998            1999           2000
      Base Salary                   360             360            360
      TTM Bonus                       0             180            288
      EPS Bonus                     253             152            182
      New Business                   31              31             31
      Debt Bonus                    118             143            204
      Total                         762             866          1,065

      40% Growth                    1998            1999           2000
      Base Salary                   360             360            360
      TTM Bonus                       0             180            396
      EPS Bonus                     253             304            425
      New Business                   31              31             31
      Debt Bonus                    118             143            204
      Total                         762           1,018          1,416


This entire section 5(c)(ii) shall be removed.


This Amendment, and through incorporation by reference, the Employment
Agreement, represent the entire employment agreement of the parties hereto.  No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by any of the parties which
are not expressly set forth in this Amendment or the Employment Agreement.


/s/ Kenneth E. Raasch                  /s/ Michael Kiley
----------------------                 -------------------------
Kenneth E. Raasch                      Michael Kiley
Employee                               Director, Compensation Committee Chairman
                                       Media Arts Group, Inc

Attest: /s/ James F. Landrum, Jr.  10/29/97
            James F. Landrum, Jr.