Job Offer Letter
April 27, 1998
Xxxxxxx X. Xxxxx
Dear Xxxxx:
I am pleased to offer you the position of President and Chief Executive
Officer of Intelligroup, Inc.
This offer replaces any prior consulting arrangement and your current
General Manager Employment Agreement, except with respect to the stock options
for 100,000 shares referenced in the Job Offer Letter of April 9, 1998 which
shall remain in force, supersedes all earlier job offers made to you, and is
solely governed by the provisions of the enclosed Employment Agreement. Nothing
in any past, present or future Company employee policy guidelines or handbooks
that may be distributed either to you or to the Company's employees in general
shall be construed to be part of this Employment Agreement.
We look forward to your leadership. With best wishes and welcome to
Intelligroup, Inc.
Sincerely,
------------------------------
Xxxxx Xxxxxx
President - Corporate Services
EMPLOYMENT AGREEMENT
Between:
INTELLIGROUP, INC.
and
Xxxxxxx X. Xxxxx
PLEASE READ THIS AGREEMENT CAREFULLY. THIS AGREEMENT DESCRIBES THE BASIC LEGAL
AND ETHICAL RESPONSIBILITIES THAT YOU ARE REQUIRED TO OBSERVE AS AN EMPLOYEE
EXPOSED TO HIGHLY SENSITIVE TECHNOLOGY AND STRATEGIC INFORMATION IN PERFORMING
YOUR DUTIES. THE COMPANY BELIEVES THAT THIS AGREEMENT STRIKES A FAIR BALANCE
BETWEEN ITS INTERESTS AND YOUR NEEDS AND EXPECTATIONS.
EMPLOYMENT AGREEMENT
This Employment Agreement is dated April 27, 1998 between Intelligroup,
Inc., a New Jersey Corporation with offices at 000 Xxxxxxx 0 Xxxxx, Xxxxx Xxxxx,
Xxxxxx, Xxx Xxxxxx 00000 (the "Company"); and Xxxxxxx X. Xxxxx (the "Employee").
STATEMENTS
A. The Company is engaged in the business of the development and/or
implementation of computer software and other technology products for its
customers.
B. The Employee has substantial experience which would be useful to the
Company in running its business and has served as a management consultant to the
Company for the past several months.
C. It is in the Company's best interest to secure the services of the
Employee and the Employee's knowledge, managerial skills, and unique
capabilities with respect to the business of the Company.
D. The Company and the Employee wish to set forth in writing the terms
and conditions of the employment of the Employee.
NOW, THEREFORE, the parties agree as follows:
ARTICLES OF AGREEMENT
ARTICLE 1. EMPLOYMENT
1.1 The Company agrees to employ the Employee as President and Chief
Executive Officer and the Employee accepts such employment by the Company on the
terms and conditions set forth in this Agreement. The Employee agrees to serve
the Company faithfully in this capacity, the duties and responsibilities of
which may change from time to time.
1.2 The Employee agrees to devote the Employee's entire energy and full
and undivided time and attention during the expected working hours of the
Employee exclusively to the business of the Company unless the Board of
Directors otherwise consents in its sole discretion. The Employee has disclosed
that he has a pending lawsuit against his past employer but states that he will
not permit the prosecution of such suit to significantly interfere with or
compromise his obligations to devote such energy and time to the business of the
Company. During the term of this Agreement, the Employee under no circumstances
may work for a competitor of the
Company or its affiliates or have any financial interest in any competitor of
the Company or its affiliates; provided, however, that investment in a
competitor whose stock or securities are traded on a national exchange is not
prohibited if the employee's collectively owning beneficially such interest at
any one time does not exceed one percent (1%) or more of the equity of any
company engaging in activities that are in competition with the Company or its
affiliates.
1.3 The Employee agrees and represents to the Company that the Employee
is not subject to any existing contract which would affect or impede the
Employee's ability to perform in accordance with the terms of this Agreement,
including, by way of example, any restrictive covenants of present or past
employers that would prohibit the Employee's acceptance of the terms of this
Agreement. The Employee agrees not to disclose to the Company any confidential
information or trade secrets of others for which he may be under an obligation
to a third party not to disclose. The Employee also agrees not to breach any
on-going fiduciary duty still owed to a current or previous employer nor to
appropriate any trade secrets obtained while in the employ of such employer.
1.4 The Employee hereby acknowledges that he/she is in a position of
trust in performing services for the Company and its clients, including but not
limited to obtaining access to confidential and trade secret information. The
Employee represents and warrants that he/she has no criminal felony convictions
involving drugs, theft or violent behavior within the past five (5) years.
Furthermore, the Employee expressly authorizes the Company or its agents to
conduct criminal background check to verify his/her above-stated
representations.
ARTICLE 2. BASE COMPENSATION
The Employee's Base Compensation is $318,000.00 per year. Unless
otherwise agreed, the Employee's Base Compensation is payable twice a month as
per the normal policies of the Company. In addition the Options Committee of
Board of Directors has approved the granting of stock options as shown in the
attached Addendum A, which is incorporated and made a part of this Agreement. In
addition the Employee will be eligible to participate in the Company's Executive
Incentive Plan, the details of which are still being developed and require Board
approval.
ARTICLE 3. FRINGE BENEFITS
The Employee has the right to participate in such fringe benefit plan
of any nature (including medical, dental and term life insurance, pension plans,
profit-sharing plans or other as specified in the Job Offer Letter) as the Board
of Directors shall determine from time to time is available; but such
participation is conditioned on the Employee's not retaining any fringe benefits
that carry forward from or arise out of in any connection his previous
employment. To the degree that the Employee is receiving such benefits, the
Company's obligations to furnish such benefits shall be reduced accordingly. The
Company reserves the right to amend or reduce its benefit plans or programs in
its discretion.
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ARTICLE 4. VACATIONS
The Employee is entitled to fifteen business days paid vacation per
each twelve months of employment, in accordance with Company policies.
ARTICLE 5. REIMBURSEMENT OF EXPENSES
The Company recognizes the Employee may make certain expenditures for
travel, entertainment and other business related expenses necessary to carry out
the Employee's duties under this Agreement. If consistent with the budget plan
and the Company's approved practices relating to the budget, the Company agrees
to reimburse the Employee promptly for all such expenses upon presentation of
proper evidence of payment. Commutation expenses to and from the Company
headquarters will not deemed to be a reimbursable business expense.
ARTICLE 6. TERM
The term of this Agreement is three years from the date of this
Agreement, commencing at the date first set forth above, but the Company may
dismiss the Employee at any time for any reason or for no reason, subject to the
compensatory provisions set forth in the other paragraphs of this Article. The
Employee may terminate this Agreement upon one month's notice.
Nothing in this Agreement shall be construed to prevent or constrain
the discretion of the Company's Board of Directors from removing the Employee as
an officer of the Company for any reason or no reason.
Should the Company terminate this Agreement without cause in addition
to reimbursement for any expenses already incurred and owing in accordance with
Article 5, the Company shall pay or make the following compensation to the
Employee as the Employee's sole remedy for such termination:
An amount equal to the monthly base salary over a period of 12 months
or the balance of the remaining term, which ever is less, paid in the same
manner as before the termination but reduced by any salary, equivalent
compensation, or payment received by the Employee arising out of any subsequent
employment, agency, partnership, proprietorship or independent contractor
relationship in which the Employee engages in a capacity similar to that
performed for the Company during the time such payments are due; provided,
however, in the event there is a change in control of the Company by merger or
consolidation with or into another corporation or by sale of substantially all
of the Company's assets, then the period of payment of this amount shall be for
the balance of the term of the Agreement.
Continuing coverage for the Employee and his dependents under all of
the Company benefit plans in effect at the date of termination to which the
Employee or any of his dependents were a participant, in the same manner or
proportion as prior to the termination, for a period of
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12 months or the balance of the remaining term, which ever is less, or to any
greater extent required by law.
A prorated portion for the period up to the termination date of any
Executive Incentive that is paid to Executives but unpaid to the Employee.
The pro rata acceleration and vesting of the next portion of any
remaining options granted in Addendum A as of the date of termination, so that ,
by way of illustration, if the vesting schedule were 25%, 30%, and 45%, and the
Employee date of termination was three months following the vesting of the first
25%, then 7.5% of the granted stock option (3/12ths of 30%) would be deemed to
vest as of the date of termination.
Cause for termination shall include but is not limited to the following
conduct of the Employee:
Material breach of any provision of this Employment Agreement, provided
the Employee is given notice and opportunity to cure such breach.
Misconduct as an employee of the Company, including but not limited to
misappropriation of funds or any property of the Company, any attempt to obtain
any personal profit from any transaction in which the Employee has an interest
that is adverse to the Company or any breach of the duty of loyalty and fidelity
to the Company, or any act or omission that substantially impairs the Company's
ability to conduct its ordinary business in its usual manner.
Unreasonable neglect or any refusal to perform the duties assigned to
the Employee under or pursuant to this Employment Agreement.
Conviction of a felony or any serious crime.
Any other act or omission within the direct control or the Employee
that causes the Company to be in violation of governmental regulations which
subject the Company either to serious sanctions by governmental authority or to
significant civil liability to its employees or third parties.
To the extent permissible under applicable law, the inability of the
Employee to perform his functions, other than due to a short-term disability due
to physical health problems lasting less than 90 calendar days.
Resignation of the Employee unless with the consent of the Company in a
writing that references the continued applicability of the payment provisions of
Paragraph 6.3.1 of this Agreement.
The death of the Employee.
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The Employee agrees to meet the performance objectives as set forth in
the Company's Annual Budget for 1998, 1999, and 2000 as presented to and
approved by the Board of Directors. Any change to such objectives after approval
of an Annual Budget and prior to its annual update shall be set forth in
writing.
Should the Employee fail to achieve the performance objectives (except
for insignificant variations), the Company may terminate this Agreement in which
case the Company shall pay to the Employee as the Employee's sole remedy for
such termination the compensation set forth in Paragraphs 6.3.1 and 6.3.2, but
specifically excluding the remedies of Paragraphs 6.3.3 and 6.3.4.
Should the Employee notify the Company that he cannot agree with such
change to the objectives, then he may provide notice of termination of this
Agreement and in which case the Company shall pay to the Employee as the
Employee's sole remedy for such termination the compensation set forth in
Paragraphs 6.3.1, 6.3.2, and 6.3.3 but specifically excluding the provisions of
Paragraph 6.3.4.
ARTICLE 7. CONFIDENTIALITY
7.1 The Company has acquired and developed, and will continue to
acquire and develop, without limitation, i) technical information (including
functional and technical specifications, designs, drawings, analysis, research,
processes, systems and procedures, computer programs, methods, ideas, "know how"
and the like); ii) business information (sales and marketing research,
materials, plans, accounting and financial information, credit information on
customers, lists containing the names, addresses and business habits of
customers or companies with which the Company has cooperative business
relationships or alliances, sales reports, price lists, personnel records
including names and addresses of Intelligroup employees, potential hires,
contractors, and subcontractors and the like) whether or not such technical or
business information is designated as confidential; and iii) other information
designated as confidential expressly or by the circumstances in which it is
provided. All of the foregoing is referred to as the "Proprietary Information".
This excludes common and generic information as set forth by federal and state
law or generally known in the industry through no fault of the Employee.
7.2 The Proprietary Information is confidential, important, and unique
to the Company's business. The Company and the Employee acknowledge the
Proprietary Information represents trade secrets of the Company.
7.3 For the Company to protect the Proprietary Information properly,
the Employee recognizes it is essential that confidentiality be maintained by
the Employee and that certain restrictions be imposed upon the Employee during
the course of employment and continuing thereafter.
7.4 The Employee agrees to keep all Proprietary Information
confidential. The Employee agrees to refrain from communicating or divulging any
of the Proprietary Information
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to any person, firm or corporation or to use the proprietary information for any
purpose other than a Company purpose during the term of employment and
thereafter at all times following the termination of this Agreement for any
reason whatsoever.
7.5 The Company has acquired, and during the Term the Employee will
acquire much similar information about the business of the Company's customers
or other parties (such as a licensor or contractor) with whom the Company does
business under circumstances requiring confidentiality. The Employee agrees to
treat the information acquired about the Company's customers and licensors at
least in the same manner and under the same restrictions of this Article 7 or in
a manner contractually required by any such customer or third party to provide
greater security to such customer or third party.
7.6 Notwithstanding the foregoing restrictions, the Employee may
disclose any information to the extent required by an order of any U.S. federal
or state court or other federal or state governmental authority, but only after
the Company or its clients or contractors, as the case may be, have been so
notified and have had the opportunity, if possible, to obtain reasonable
protection for such information in connection with such disclosure.
7.7 Upon the request of the Company or upon the termination of this
Agreement, the Employee will cause to remain with the Company all memoranda,
notes, records, drawings, manuals, disks, or other documents and media
pertaining to the Company's business, including all copies of such.
7.8 To the degree that the obligations of the Confidentiality Agreement
as of November 11, 1997 between Intelligroup and Xxxxxxx X. Xxxxx are in
addition to those set forth in this Article 7, they shall be deemed to continue
in effect and are hereby incorporated into this Agreement
The provisions of this Article 7 shall survive the Termination of this
Agreement.
ARTICLE 8. RESTRICTIVE COVENANT;
NONINTERFERENCE WITH CUSTOMER AND
COMPANY PERSONNEL RELATIONS
8.1 The Employee, recognizing the high level of trust and authority and
the unique access to Company Proprietary Information to which he is being
afforded by the Company, in exchange covenants and agrees that he will not
during the term of employment and for a period of one year thereafter, on behalf
of himself or on behalf of any other person or business entity or enterprise
directly or indirectly as an employee, proprietor, stockholder, partner,
consultant or otherwise, engage in any business or activity competitive with the
business activities or the Company or its affiliates as they now are or
hereafter undertaken by the Company.
8.2 The Employee further covenants and agrees that during the term of
employment and for a period of one year following the termination of employment
for any reason or no
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reason, the Employee shall not directly or indirectly do any of the following
without the consent of a Company executive, ratified by the Board of Directors:
8.2.1 Solicit or accept any business similar to that provided by the
Company from a person, firm or corporation that is a customer of the Company
during the time the Employee is employed by the Company; and
8.2.2 Solicit or accept any business similar to that provided by the
Company from any person, firm or corporation that is a prospective customer of
the Company (based on Company prospect reports) during the term of employment.
8.2.3 Solicit, persuade, induce, entice or attempt to entice, directly
or indirectly or in aid of a third party, any employee or individual contractor
of the Company to terminate his or her employment or contractual relationship
with the Company.
8.2.4 Solicit, persuade, induce, entice or attempt to entice, directly
or indirectly or in aid of a third party, any customer of the Company to
terminate its business relationship with the Company. For the purpose of this
paragraph, such customer shall include as well firms, companies or other
business entities that have been customers of the Company within the 12 months
preceding Employee's termination but may not be actual customers at the time of
termination.
8.3 The restrictions of this Article 8 shall survive the termination
of this Agreement.
ARTICLE 9. REMEDIES OF COMPANY
9.1 The Employee acknowledges the restrictions imposed by this
Agreement are reasonable and are necessary to protect the legitimate business
interests of the Company.
9.2 If the Employee breaches or threatens to breach any confidentiality
or restrictive covenants of the restrictions imposed by this Agreement, the
Employee agrees the Company would suffer irreparable harm for which money would
be an inadequate remedy. Accordingly, the Employee agrees that the Company has
the right to obtain injunctive or other equitable relief in addition to any
other available remedies and the Company shall have the additional right to
recover from the Employee court costs and reasonable attorneys fees incurred by
the Company in protection of its interests hereunder, should the Company
prevail.
ARTICLE 10. BINDING EFFECT
The rights and obligations of this Agreement are binding upon, inure to
the benefit of and are enforceable by the heirs, personal representatives,
successors and assigns of the parties. This Agreement is not assignable by the
Employee nor may the obligations of the Employee be delegated to any person or
other entity without the prior written consent of the Company. The
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above notwithstanding, the Company may assign this Agreement without the consent
of the Employee to a subsidiary of the Company or to an entity which is acquired
by the Company, to an entity that acquires the Company, to an entity with which
the Company merges or to any other such successor, provided that the Employee's
duties and functions (but not xxxxxx) remain substantially similar or
commensurate under the assignee; otherwise the Employee may resign at the time
of such assignment as though he were discharged without cause.
ARTICLE 11. INVENTIONS, TRADEMARKS, PATENTS
AND OTHER WORK PRODUCTS
11.1 Unless otherwise authorized in writing by the Company and to the
extent the Employee generates works of authorship, copyrights, inventions,
trademarks, trade dress or other such work products dealing with the nature of
the Company's business (collectively the "Works") during the terms of employment
by the Company, or uses the premises, facilities or time of the Company to
create or fix the Works, the Employee shall and hereby does convey, assign and
transfer ownership to the Company of all right, title and interest in and to all
the Works throughout the world, including but not limited to any and all
copyright, patent, trademark and trade dress rights. Whenever permitted by law,
the Company shall have the exclusive right to obtain copyright, patent and/or
trademark registration or other protection in the Works in its own name as
inventor, author and owner and to secure any renewals and extensions of such
rights throughout the world.
11.2 The Employee hereby acknowledges that the Employee retains no
rights whatsoever with respect to the Works, including but not limited to any
rights to reproduce the Works, prepare derivative works based thereon, file
copyright or trademark applications for the Works, distribute copies of the
Works in any manner whatsoever, exhibit, use or display the Works publicly or
otherwise, or license or assign to any third party the right to do any of the
foregoing, except as otherwise authorized in writing by the Company.
11.3 The Employee agrees to execute any documents as may be reasonably
required by the Company to effect the Company's ownership rights as provided
herein or to otherwise further the purpose of this Agreement.
11.4 The Company shall be entitled to a shop right with respect to any
of the Works created by the Employee that is not assignable to the Company under
the terms of this Agreement. In the event of termination, expiration or
invalidation of this Agreement by statutory construction, judicial
interpretation or other means, Employee agrees that the Company has absolute
rights of first refusal to acquire any remaining portion or extension of the
copyright term in the Works.
ARTICLE 12. AMENDMENTS AND NON-WAIVER
This Agreement, including this Article 12, may only be changed or
amended by a written agreement authorized by the Board of Directors and signed
by a Company Executive Officer and
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the Employee. A waiver by the Company of a breach of any provision of this
Agreement by the Employee is not to be construed as a waiver of any other
current or subsequent breach.
ARTICLE 13. ENTIRE AGREEMENT
This Agreement, together with the initial compensation set forth in the
Job Offer letter to which this Agreement is attached, contains the entire
understanding of the parties with respect to the matters set forth herein. Each
party acknowledges that there are no warranties, representations, promises,
covenants or understandings of any kind except those that are expressly set
forth in this Agreement. This Agreement supersedes any previous agreements
between the parties.
ARTICLE 14. NOTICES
All notices under this Agreement shall be made in writing and shall be
deemed given when (1) delivered in person, (2) deposited in the U.S. mail, first
class, with proper postage prepaid and properly addressed, (3) delivered by an
overnight or other express delivery service carrier, or (4) sent through the
interoffice delivery service of Employer, if the Employee is still employed by
the Company at the time.
ARTICLE 15 ARBITRATION
15.1 Issues. Except as to issues relating to breach of the Employee's
obligations under Article 7 (Confidentiality), of Article 8 (Restrictive
Covenant; Noninterference with Customer and Personnel Relations), and of Article
11 (Inventions, Trademarks, Patents And Other Work Products), any claim or
dispute regarding the terms or conditions of employment of this Agreement shall
be submitted to arbitration in accordance with this Article 15. These claims
without limitation specifically include: claims for breach of an implied or
expressed employment contract, claims for unlawful discharge, claims alleging a
violation of Title VII of the Civil rights Act, as amended, The Age
Discrimination in Employment Act of 1967, as amended, The Americans with
Disabilities Act, The Equal Pay Act, The Family Medical Leave Act, federal and
state Wage and Hour Laws, the Employee Retirement Income Security Act of 1974,
federal and state whistleblower laws, and other claims pursuant to federal,
state, or local law regarding discrimination based on race, age, sex, religion,
,marital status, disability, sexual orientation, or national origin, claims for
alleged violation of any other local, state, and federal law, regulations,
ordinance or public policy having any bearing whatsoever on the terms and
conditions of Employee's employment with the Company, or the termination of such
employment, including claims a alleging a violation of the New Jersey Law
Against Discrimination, Family Leave Act and Conscientious Employee Protection
Act, all claims pursuant to common law, or claims arising directly or indirectly
out of Employee's employment by or separation from employment with the Company.
15.2. Terms of Arbitration. All matters subject to arbitration under
this Article 15 shall be submitted to arbitration in accordance with the
Arbitration Rules of the American Arbitration
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Association applicable to employment matters, except as otherwise provided in
this Agreement. Arbitration shall be brought upon the written notice of one
party to the other of a demand for arbitration, including a recitation of the
claim or dispute for which arbitration is sought and a specification of the
Arbitrator chosen by such party from a list of potential arbitrators prepared by
the American Arbitration Association. Arbitration shall be before a panel of
three Arbitrators. Within 30 days of receipt of a demand for arbitration, the
party receiving the demand must select a second Arbitrator from the said list
and notify the other party of the first party's selection. Within 20 days
thereafter, these two Arbitrators shall select a third Arbitrator from the said
list. If they fail to select a third Arbitrator, then the third Arbitrator shall
be designated by the American Arbitration Association. If either party fails to
designate an Arbitrator, then the claim or dispute shall be submitted to
arbitration before a panel of three arbitrators, but the American Arbitration
Association shall choose an arbitrator for a party that failed to make a
designation as well as the third arbitrator.
15.3. Place. All matters subject to arbitration under this
Agreement shall be arbitrated in Middlesex County, New Jersey.
15.4. Final Award. The award in the arbitration proceeding shall be
final and binding on the parties, and judgment on such award may be entered in
any court having competent jurisdiction.
15.5. Fees and Expenses. All fees and expenses connected with the
arbitration proceeding, other than counsel fees incurred by either party, if
any, shall be shared equally by both parties; provided, however, that the
Arbitrators are authorized to award either party a sum to compensate the party
for the time and expense of the arbitration if they determine that arbitration
was demanded without reasonable cause. In such event, the Arbitrators may also
assess the costs of the arbitration proceeding against the party that
unreasonably demanded arbitration.
ARTICLE 16. GOVERNING LAW AND JURISDICTION
This Agreement is governed by and is to be construed and enforced in
accordance with the laws of New Jersey as though made and to be fully performed
in New Jersey (without regard to the conflicts of law rules of New Jersey). All
disputes arising under this Agreement not governed by the binding arbitration
provision of this Agreement are to be resolved in the courts of the State of New
Jersey. If any party desires to commence an action to enforce any provision of
this Agreement not governed by that binding arbitration provision, such action
must be instituted in the appropriate New Jersey court. The parties consent to
the jurisdiction of the New Jersey courts. The parties agree that the courts of
the State of New Jersey are to have exclusive jurisdiction over this Agreement.
The parties agree that service of any process is effective if served in the
manner that a Notice may be served pursuant to this Agreement.
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ARTICLE 17. SEVERABILITY
The invalidity or unenforceability of any provision of this Agreement
does not in any manner affect any other provision. If any provision is
determined to be invalid or unenforceable, this Agreement is to be construed as
if the invalid or unenforceable provision was omitted.
IN WITNESS WHEREOF, the parties have signed this Agreement.
INTELLIGROUP, INC.
By:/s/ Xxxxx Xxxxxx
------------------------------
Xxxxx Xxxxxx
President - Corporate Services
By:/s/ Xxxxxxx X. Xxxxx
------------------------------
Xxxxxxx X. Xxxxx
Attachment A
This is an attachment to the Employment Agreement between Intelligroup,
Inc. and Xxxxxxx X. Xxxxx, dated April 27, 1998.
In accordance with Article 2 of the Agreement, the Company will also
recommend to the Board the granting of 200,000 options for shares of Common
Stock of Intelligroup, Inc pursuant to the 1996 Stock Option Plan with a vesting
schedule of 25% at the end of the first year of the term of this Agreement, 30%
at the end of the second year of the term of this Agreement, and 45% at the end
of the third year of the term of this Agreement, subject to shareholder approval
at that 1998 Annual Meeting of a proposal to expand the existing number of
shares available for option grants.
