[LOGO]
May 14, 1997
Xxxx X. XxXxxxxxx, Ph.D.
0000 Xxxx xxxxxx
Xxxxx Xxxxxxx, Xxxxx 00000
Re: First Amendment to that Certain Letter of understanding Regarding
Development of Proprietary Information for Mannatech, Incorporated,
("Mannatech" or "Corporation") effective as of August 1, 1997 ("Letter
Agreement") attached for reference as Exhibit "A" hereto, by and
between Xxxx X. XxXxxxxxx, Ph.D. ("BHD") and Mannatech, Incorporated
("Mannatech")
Dear Xx. Xxxxxxxxx:
This is to confirm our oral understanding regarding the modification to the
Letter Agreement which has been reached between yourself and Mannatech.
The Letter Agreement will remain in full force and effect, with the
exception of the agreement respecting additional compensation, set forth
commencing on Page 1, and reading as follows:
The Corporation has agreed to pay to you .5% of its corporate Bonus
volume for the united States and Canada [as such Bonus volume is
computed, under the formula published, and in effect from time-to-time
in the official Compensation Plan of the Corporation published by it
as its corporate literature), so long as the Corporation continues to
use any of the proprietary intellectual property of Mannatech, which
you have developed or assisted in developing. This consideration is
in addition to sums paid to you as a salaried employee of the
Corporation. The right to receive this additional compensation shall
not be assignable, except to a corporation entirely controlled by you,
or a trust of which you are the settlor, but otherwise shall fully
inure to the benefit of your heirs and successors.
Page 2
In lieu of the foregoing additional compensation, you will be issued,
within ten (10) days after the execution of this letter, capital stock in
Mannatech in the amount of 303,667 shares. Additionally, Mannatech has agreed to
issue to you at that same time, options to purchase up to 240,000 shares of the
Capital stock of the Mannatech, as set forth in Exhibit "B" hereto.
Notwithstanding any provision contained herein to the contrary, the you agrees
to be bound by the underwriting agreements or requirements by and between the
Mannatech and any underwriter which might provide services to it in connection
with any public offering of its capital stock ("underwriter"). Further, should
such underwriter impose any restrictions upon the exercise, registration or
other rights, concerning the of stock or options conferred hereby, or otherwise
granted under this Agreement, you agree to further be bound by such
requirements, limitations, restrictions, and/or agreements, as agreed to by the
Corporation. You hereby appoint the Corporation as your attorney-in-fact to
execute all documents on your behalf concerning agreements offering the shares
of stock and/or related options, as the case may be, conferred hereby,
including, without limitation, those agreements with the underwriter, referenced
above.
It has further been agreed that the Board of Directors of Mannatech will
officially name you as the Chief Science Officer of the Mannatech, in addition
to your current title of Vice President of Research, Development and New
Products.
Additionally remaining in full force and effect and surviving the
termination of any other agreements between the parties is the Non-Disclosure
Agreement previously executed in favor of Mannatech by yourself.
Assuming that the foregoing comports with your understanding of the
agreement that we have reached in this matter, please signify the same by
executing this letter, and returning a signed copy of the same to our corporate
counsel.
Thank you for your assistance and agreement in this very important matter.
Very truly yours,
Xxxxxxxxx, incorporated
/s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Chairman of the Board
AGREED:
/s/ Xxxx X. XxXxxxxxx
-----------------------------
Xxxx X. XxXxxxxxx
ACKNOWLEDGEMENT
STATE OF TEXAS Section
COUNTY OF DALLAS Section
BEFORE, ME THE UNDERSIGNED AUTHORITY, personally appeared Xxxx X.
XxXxxxxxx, who swore upon oath that the foregoing document was executed for the
consideration and in the capacity therein stated.
SWORN AND SUBSCRIBED TO BEFORE ME on this the 19 day of August 1997.
/s/ Xxxxxx Xxxxxxxx
---------------------------
Notary Public {Seal}
August ___ , 1996
Xxxx X. XxXxxxxxx, Ph.D.
0000 Xxxx xxxxxx
Xxxxx Xxxxxxx, Xxxxx 00000
RE: Letter of understanding Regarding Development of Proprietary
Information for Mannatech, Incorporated.
Dear Xx. XxXxxxxxx:
First, let me confirm to you your employment as Director of Research,
Development and New Products at Mannatech, Incorporated ("Corporation") . Your
employment, as for the majority of our employees, is simply at the will of the
parties, and governed under all policies and procedures applicable to employees
of the Corporation, and applicable state and federal law. We welcome you in
your new role, and look forward to the exciting developments for our company and
the many people using our products, that your expertise will undoubtedly bring.
The second purpose of this letter is to outline your additional
compensation for the development of proprietary compositions, processes, uses,
and the like which will constitute proprietary intellectual property of the
Corporation. Such amounts will be paid monthly, based upon the results of the
preceding months, or otherwise as the parties shall agree, as well as other
duties and obligations that we believe should be discussed for clarity between
the parties.
The Corporation has agreed to pay to you .5% of its corporate Bonus Volume
for the United States and Canada [as such Bonus Volume is computed, under the
formula published, and in effect from time-to-time in the official Compensation
Plan of the Corporation published by it as its corporate literature], so long as
the Corporation or continues to use any of the proprietary intellectual property
of Mannatech, which you have developed or assisted in developing. This
consideration is in addition to sums paid to you as a salaried employee of the
Corporation. The right to receive this additional compensation shall not be
assignable, except to a
1
EXHIBIT
A
corporation entirely controlled by you, or a trust of which you are the settlor,
but otherwise shall fully inure to the benefit of your heirs and successors.
Any idea, technology, know-how, process, patent, formula, product,
composition, iteration, use, information, or other intellectual property
("Intellectual Property") which shall come to you and/or be researched and
developed during your employment with Mannatech, particularly including the
intellectual Property which you directly work on for Mannatech, shall be
determined as follows:
(a) in the event that you have been requested to or offer to develop
particular Intellectual Property for Mannatech, and do so, then such
intellectual Property shall be the sole property of Mannatech;
(b) in the event that you, during the period of your employment with
Mannatech, discover or develop intellectual Property, other than that
which you have been requested or offer to develop for Mannatech
("Additional Intellectual Property"), you shall first offer, in
writing, such Additional intellectual Property to Mannatech.
Mannatech shall have a period of thirty (30) days within which to
accept or reject such Additional intellectual Property. If such
Additional Intellectual Property is not accepted by Mannatech within
such thirty-day (30) period, then such property will be deemed as
rejected by Mannatech, and all rights to the same shall thereafter be
assigned or released by Mannatech to you.
(c) In the further event that Mannatech does not establish, with your
cooperation, a budget and allocate funds for the development and
protection, or otherwise diligently pursue the development and
protection of (or is not in the process of pursing or developing) such
Additional Intellectual Property elected as its property, pursuant to
paragraph (a) hereof, then you, may request, in writing, that such
property right be assigned and transferred to you. Thereafter,
Mannatech will have thirty (30) days, from the date of the receipt of
such written request, within which to either transfer the same to you,
in accordance with your request, or establish a budget and a working
schedule for the development and protection of such Additional
Intellectual Property, and thereafter diligently proceed to develop
and protect such Additional Intellectual Property in accordance with
such budget and working schedule.
(d) Mannatech understands that you have contractual commitments with
Xxxxxxxxxx, Laboratories, Inc. and White
2
Gaps, Inc. to develop intellectual property which you have discovered
prior to this date, and that such shall constitute an exception to
this agreement, and Mannatech shall claim no ownership of any such
intellectual property, the foregoing provisions of this agreement
notwithstanding.
You agree to execute any document, accurately prepared by counsel of
Mannatech, which shall serve to preserve the rights to the intellectual Property
of Mannatech, including patent applications and related documents, and transfers
and evidences of ownership of such rights in the Corporation The obligation to
acknowledge ownership of the Intellectual Property in the Corporation and to
participate in the execution of documents to obtain, evidence and secure rights
pertaining to the same, shall survive your employment and this agreement, and
shall bind your heirs, successors, and if applicable, assigns. Accordingly, you
hereby affirm that any rights which might vest in you with regard to any
intellectual Property which shall come to you and/or be researched and developed
during your employment with Mannatech, including without limitation the rights
to manufacture, reproduce, use, publish, distribute, market sell, license or
otherwise exploit, shall be transferred, at various times, at the request of the
Corporation, to it, as its sole property, with no rights, except to the right of
compensation, set forth above, remaining within your ownership.
It is our intention that you, working with others that the Corporation
shall employ or retain on a contract basis, shall develop proprietary
ingredients, formulations and products for the benefit of the Corporation. It is
our specific understanding, based upon your recent proposal that you require
certain resources which you have outlined in your strategic plan of action to
us. The summary of the initial budget approved by the Board of Directors, is
attached as Exhibit "A" hereto. Access to the subject budget shall be through a
procedure, which you and the Corporation will develop together to assure both
your research and development needs, as well as the Corporation's need for
orderly disbursement of funds and accounting.
We will require that you, as well as all persons working with you or under
your supervision, keep full and extensive origin and progress notes on any
proprietary property, including that in process, which you may supervise or work
on for the Corporation from the inception of the idea ("stream of consciousness"
concerning the idea) through the conclusion of the refinement of the same.
We expect, and you agree, that all of the information that you generate in
connection with the Proprietary Property, be kept confidential, and that all
persons, including employees and independent contractors with whom you work be
required to execute a confidentiality agreement which in form is agreeable to
the
3
Corporation and its counsel. All personnel, both contract and employees, under
your supervision shall be admonished by you regarding the methodology of keeping
logs and data to establish ownership and confidentiality over the same. Any
procedures regarding these requirements should be adopted in conjunction with
personnel within the corporate office responsible for compliance and legal
functions. if you should ever be the subject of a subpoena regarding any
Proprietary Property, including any information of confidence, generally,
regarding the Corporation, you agree to notify the Corporation and follow its
direction and that of its counsel regarding any motion to quash, dissolve, limit
or otherwise affect the obligation of the subpoena. The Corporation shallLear
all expense in connection with the retention and compensation of such counsel,
and accordingly will select and direct the same. You agree to follow the
requirements of any final subpoena or order issued by a court of competent
jurisdiction regarding the same.
You agree to fully debrief and explain all Proprietary Property of the
corporation to its officers and designees, as well as assist and/or direct in
the creation of corporate literature and marketing information regarding the
same.
Further, should the Corporation desire to test the efficacy or any other
aspect of the Proprietary Property, you agree to participate, as requested by
the Corporation, in the planning, design, effectuation, implementation, and
analysis of such testing.
You specially represent and warrant that any of the Intellectual Property
that you will research and develop for Mannatech is of independent, and novel
origin, and does not rely in any aspect on other technologies and ideas that you
may have, in the past, conceived, researched and/or developed for others or
yourself in the past, except for technologies and ideas which are within the
public domain. Further, you hereby represent and warrant as follows:
- That to your personal knowledge none of the Intellectual Property of
which you conceive, research or develop, and ultimately convey to the
Corporation shall violate or infringe any patent, copyright, right of privacy,
nor constitute the misuse or misappropriation of any trade secret or
confidential information;
- That you shall take reasonable steps to identify and secure any approvals
or permissions required in connection with the production, manufacture, use or
exploitation of the intellectual Property to the effect that the same have been
or will have been, obtained prior to any transfer of the Intellectual Property
to the Corporation [or if not reasonably obtainable, identified to the
Corporation in writing), and that to the extent the same are secured, such shall
remain in full force and effect with respect to such intellectual Property
during the period of ownership by the
4
Corporation
The Corporation will, at its sole expense, arrange to have filed, first in
your and/or any other inventor's names, with subsequent assignment to the
Corporation, to the extent that the Corporation deems advisable, all patent,
copyright, and other documentary registrations of rights pertaining to the
Intellectual Property (except for trade and service marks pertaining to such
Intellectual Property, which the Corporation shall, from the outset, own
solely), including any foreign registrations and renewals and modifications
thereof. You, in furtherance of this undertaking, agree to execute such
documents and take such other action as may be required to effectuate such
documentation and registration, provided that the full expense related to the
same shall be borne by the Corporations
From time-to-time, as our relationship evolves, we may reach other
requirements, undertakings or provisions which require additional documentation,
and which may either supplement or amend this letter. Such supplements and
amendments shall be binding on the Corporation and yourself only to the extent
that they are included in a writing signed by both parties.
We welcome you, your expertise, and your scientific endeavor for our
Corporation. We genuinely hope that this agreement will constitute a first
effort to being a leader in defining the cutting edge of nutritional and
personal care products for domestic and world markets.
This Letter of Understanding is effective between the parties, as of August
1, 1996.
If the foregoing terms and conditions are agreeable to you, please execute
and return a duplicate of the original of the letter, such to constitute the
agreement between us.
Very truly yours,
MANNATECH, INCORPORATED
Xxxxxx Xxxxx
Chief Executive Officer
DV:ss
attachment as indicated (budget)
ACCEPTED AND AGREED:
-------------------------------------
XXXX X. XXXXXXXXX, PHD.
5
APPENDIX I (proposed)
INCENTIVE STOCK OPTION
To: XXXX XxXXXXXXX
-----------------------------------------------------------------
Name
4921 Corn Valley, Grand Prairie. Texas 85052
-----------------------------------------------------------------
Address
Date of Grant: June 23, 1997
-------------------------------------------------------
You are hereby granted an option, effective as of the date hereof, to
purchase 240,000 shares of common stock, $0.001 par value per share ("Common
Stock"), of Mannatech. Incorporated, a Texas corporation (the "Company") at a
price of $1.35 per share pursuant to the Company's 1997 Stock Option Plan (the
"Plan").
Subject to the condition set forth in the immediately following paragraph.
your option may first be exercised ninety (90) days following completion by the
Company of a registered public offering of its securities pursuant to the
requirements of the Securities Act of 1933. as amended. but in any event not
earlier than one (1) yew from date of grant. On and after one year and prior to
two years from the date of grant, your option may be exercised for up to 33 1/3%
of the total number of shares subject to the option minus the number of shares
previously purchased by exercise of the option (as adjusted for any change in
the outstanding shares of the Common Stock of the Company by reason of a stock
dividend, stock split, combination of shares, recapitalization. merger,
consolidation, transfer of assets, reorganization. conversion or what the
Committee deems in its sole discretion to be similar circumstances). Each
succeeding yew thereafter, your option may be exercised for up to an additional
33 1/3% of the total number of shares subject to the option minus the number of
shares previously purchased by exercise of the option (as adjusted for any
change in the outstanding shares of the Common Stock of the Company by reason of
a stock dividend. stock split, combination of shares, recapitalization, merger,
consolidation, transfer of assets. reorganization, conversion or what the
Committee deems in its sole discretion to be similar circumstances). Thus,
subject as aforesaid to the condition set forth in the next paragraph, this
option is fully exercisable on and after three years after the date of grant,
except if terminated earlier as provided herein. No fractional shares shall be
issued or delivered. This option shall terminate and is not exercisable after
[ten (10)] years from the date of its grant (the "Scheduled Termination Date"),
except if terminated earlier as hereafter provided.
You may exercise your option by giving written notice to the Secretary' of
the Company on forms supplied by the Company at its then principal executive
office, accompanied by payment of the option price for the total number of
shares you specify that you wish to purchase. The payment may be in any of the
following forms: (a) cash, which may be evidenced by a check and includes cash
received from a stock brokerage firm in a so-called "cashless exercise"; (b)
(unless prohibited by the Committee) certificates representing shares of Common
Stock of the Company. which will be valued by the Secretary of the Company at
the fair market value per
1
EXHIBIT
B
share of the Company's Common Stock (as determined in accordance with the Plan)
on the date of delivery of such-certificates to the Company, accompanied by an
assignment of the stock to the Company; or (c) (unless prohibited by the
Committee) any combination of cash and Common Stock of the Company valued as
provided in clause (b). Any assignment of stock shall be in a form and substance
satisfactory to the Secretary of the Company, including guarantees of
signature(s) and payment of all transfer taxes if the Secretary deems such
guarantees necessary or desirable.
Your option will, to the extent not previously exercised by you, terminate
thirty (30) day's after the date on which your employment by the Company or a
Company subsidiary corporation is terminated (whether such termination be
voluntary or involuntary) other than by reason of disability as defined in
Section 22(e)(3) of the Internal Revenue Code of 1986, as amended (the "Code"),
and the regulations thereunder, or death, in which case your option will
terminate one year from the date of termination of employment due to disability
or death (but in no event later than the Scheduled Termination Date). After the
date your employment is terminated, as aforesaid, you may exercise this option
only for he number of shares which you had a right to purchase and did not
purchase on the date your employment terminated. If you are employed by a
Company subsidiary corporation, your employment shall be deemed to have
terminated on the date your employer ceases to be a Company subsidiary
corporation, unless you are on that date transferred to the Company or another
Company subsidiary corporation. Your employment shall not be deemed to have
terminated if you are transferred from the Company to a Company subsidiary
corporation, or vice versa, or from one Company subsidiary corporation to
another Company subsidiary corporation.
If you die while employed by the Company or a Company subsidiary
corporation, your executor or administrator, as the case may be, may, at any
time within one year after the date of your death (but in no event later than
the Scheduled Termination Date), exercise the option as to any shares which you
had a right to purchase and did not purchase during your lifetime. If your
employment with the Company or a Company parent or subsidiary corporation is
terminated by reason of your becoming disabled (within the meaning of Section
22(e)(3) of the Code and the regulations thereunder), you or your legal guardian
or custodian may at any time within one year after the date of such termination
(but in no event later than the Scheduled Termination Date), exercise the option
as to any shares which you had a right to purchase and did not purchase prior to
such termination. Your executor, administrator, guardian or custodian must
present proof of his authority satisfactory to the Company prior to being
allowed to exercise this option.
In the event of any change in the outstanding shares of the Common Stock of
the Company by reason of a stock dividend, stock split, combination of shares,
recapitalization, merger, consolidation, transfer of assets, reorganization,
conversion or what the Committee deems in its sole discretion to be similar
circumstances, the number and kind of shares subject to this option and the
option price of such shares shall be appropriately adjusted in a manner to be
determined in the sole discretion of the Committee.
2
This option is not transferable otherwise than by will or the laws of
descent and distribution, and is exercisable during your lifetime only by you.
including, for this purpose. your legal guardian or custodian in the event of
disability. Until the option price has been paid in full pursuant to due
exercise of this option and the purchased shares are delivered to you. you do
not have any rights as a shareholder of the Company. The Company reserves the
right not to deliver to you the shares purchased by virtue of the exercise of
this option during any period of time in which the Company deems, in its sole
discretion, that such delivery would violate a federal, state, local or
securities exchange rule, regulation or law.
Notwithstanding anything to the contrary contained herein. this option is
not exercisable until all the following events occur and during the following
periods of time:
(a) Until the Plan pursuant to which this option is granted is
approved by the shareholders of the Company in the manner prescribed by the Code
and the regulations thereunder;
(b) Until this option and the optioned shares are approved
and/or registered with such federal, state and local regulatory bodies or
agencies and securities exchanges as the Company may deem necessary or
desirable; or
(c) During any period of time in which the Company deems that
the exercisability of this option, the offer to sell the shares optioned
hereunder, or the sale thereof, may violate a federal, state, local or
securities exchange rule, regulation or law, or may cause the Company to be
legally obligated to issue or sell more shares than the Company is legally
entitled to issue or sell.
(d) Until you have paid or made suitable arrangements to pay
(which may include payment through the surrender of Common Stock, unless
prohibited by the Committee) (i) all federal, state and local income tax
withholding required to be withheld by the Company in connection with the option
exercise and (ii) the employee's portion of other federal, state and local
payroll and other taxes due in connection with the option exercise.
The following two paragraphs shall be applicable if, on the date
of exercise of this option, the Common Stock to be purchased pursuant to such
exercise has not been registered under the Securities Act of 1933, as amended,
and under applicable state securities laws, and shall continue to be applicable
for so long as such registration has not occurred:
(a) The optionee hereby agrees, warrants and represents that he
will acquire the Common Stock to be issued hereunder for his own account for
investment purposes only, and not with a view to, or in connection with, any
resale or other distribution of any of such shares, except as hereafter
permitted. The optionee further agrees that he will not at any time make any
offer, sale, transfer, pledge or other disposition of such Common Stock to be
issued hereunder without an effective registration statement under the
Securities Act of l933, as amended, and under any applicable state securities
laws or an opinion of counsel acceptable to
3
the Company to the effect that the proposed transaction will be exempt from such
registration. The optionee shall execute such instruments, representations,
acknowledgements and agreements as the Company may, in its sole discretion, deem
advisable to avoid any violation of federal, state, local or securities exchange
rule, regulation or law.
(b) The certificates for Common Stock to be issued to the
optionee hereunder shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER APPLICABLE STATE SECURITIES
LAWS. THE SHARES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND UNDER ANY APPLICABLE
STATE SECURITIES LAWS OR AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT
THE PROPOSED TRANSACTION 'WILL BE EXEMPT FROM SUCH REGISTRATION."
The foregoing legend shall be removed upon registration of the legended
shares under the Securities Act of 1933, as amended, and under any applicable
state laws or upon receipt of any opinion of counsel acceptable to the Company
that said registration is no longer required.
The sole purpose of the agreements, warranties, representations and legend
set forth in the two immediately preceding paragraphs is to prevent violations
of the Securities Act of 1933, as amended, and any applicable state securities
laws.
Subject to the $100,000 per year limitation of Section 422(d) of the Code,
it is the intention of the Company and you that this option shall, if possible,
be an "Incentive Stock Option" as that term is used in Section 422 of the Code
and the regulations thereunder. In the event this option is in any way
inconsistent with the legal requirements of the Code or the regulations
thereunder for an "Incentive Stock Option," this option shall be deemed
automatically amended as of the date hereof to conform to such legal
requirements, if and to the extent that such conformity may be achieved by
amendment.
Nothing herein shall modify your status as an at-will employee of the
Company. Further, nothing herein guarantees you employment for any specified
period of time. This means that either you or the Company may terminate your
employment at any time for any reason, or no reason. You recognize that, for
instance, you may terminate your employment or the Company may terminate your
employment prior to the date on which your option becomes vested. The preceding
sentences of this paragraph, however, shall not apply to the extent of any
inconsistency with a provision or provisions of a written contract of employment
between you and the Company for so long, but only so long, as such contract
remains in full force and effect or the provisions involved survive the
termination of such contract.
Any dispute or disagreement between you and the Company with respect to any
portion of this option or its validity, construction, meaning, performance or
your rights hereunder shall
4
be settled by arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association or its successor, as amended from time to
time. However, prior to submission to arbitration you will attempt to resolve
any disputes or disagreements with the Company over this option amicably and
informally, in good faith. for a period not to exceed two weeks. Thereafter, he
dispute or disagreement will be submitted to arbitration. At any time prior to a
decision from the arbitrator(s) being rendered, you and the Company may resolve
the dispute by settlement. You and the Company shall equally share the costs
charged by the American Arbitration Association or its successor, but you and
the Company shall otherwise be solely responsible for your own respective
counsel fees and expenses. The decision of the arbitrator(s) shall be made in
writing, setting forth the award, the reasons for the decision and award and
shall be binding and conclusive on you and the Company. Further, neither you nor
the Company shall appeal any such award. Judgment of a court of competent
jurisdiction may be entered upon the award and may be enforced as such in
accordance with the provisions of the award.
This option shall be subject to the terms of the Plan in effect on the date
this option is granted, which terms are hereby incorporated herein by reference
and made a part hereof. In the event of any conflict between the terms of this
option and the terms of the Plan in effect on the date of this option, the terms
of the Plan shall govern. This option constitutes the entire understanding
between the Company and you with respect to the subject Matter hereof and no
amendment, supplement or waiver of this option, in whole or in part, shall be
binding upon the Company unless in writing and signed by the President of the
Company. This option and the performances of the parties hereunder shall be
construed in accordance with and governed by the laws of the State of Texas.
Please sign the copy of this option and return it to the Company's
Secretary, thereby indicating your understanding of and agreement with its terms
and conditions.
MANNATECH, INCORPORATED,
a Texas corporation
By
---------------------------
Its
------------------------
I hereby acknowledge receipt of a copy of the foregoing stock option and, having
read it hereby signify my understanding of, and my agreement with, its terms and
conditions.
Further in this regard, the undersigned acknowledges that, under Section
422(d) of the Code, to the extent that the aggregate fair market value of stock
with respect to which incentive stock options are exercisable for the first time
by the undersigned during any calendar year exceeds $100,000.00, such options
shall be treated as options which are not incentive options.
-------------------------------- ------------------------------
(Signature) (Date)
5
