<PAGE>
 
                                                September 24, 1997

Mr. Graham Sharp
Discreet Logic Inc.
10 Duke Street
Montreal, Quebec  H3C 2L7

Dear Graham:

Discreet Logic Inc. ("DISCREET") is pleased to offer you employment upon the
terms and conditions set out below.

1.   Duties and Responsibilities
     ---------------------------

Discreet hereby agrees to engage your services as Senior Vice-President, Sales
and Marketing of Discreet.  In such capacity, you shall report directly to the
Chief Executive Officer of Discreet or such other person as may be designated by
Discreet from time to time and you shall be accountable to both the latter and
the board of directors of Discreet.

By your acceptance hereof, you agree to devote all of your working time,
attention and skill to Discreet and to make every effort necessary to promote
the success of Discreet's business and perform adequately the duties that are
assigned to you as of the Date of Commencement (as defined below).

You further agree that you may not pursue any activities which could be
detrimental to Discreet's interests.

2.   Compensation
     ------------

Discreet shall pay you a base annual salary (the "SALARY") of US $125,000 as of
the Date of Commencement.  The Salary shall be reviewed annually by Discreet in
accordance with its applicable internal policies in effect from time to time.

You shall furthermore be eligible to receive annual commissions targeted at US
$75,000 based on the achievement by Discreet, on a consolidated basis, of
certain revenue and margin amounts as approved by the board of directors from
time to time. In addition, if Discreet exceeds, on a consolidated basis, these
certain annual revenue and margin amounts as approved by the board of directors
from time to time, you will receive a bonus of US $25,000 which is to be paid
annually. The compensation committee, at its sole discretion, may approve an
additional bonus payment if Discreet exceeds, on a consolidated basis, certain
operating amounts. Not withstanding the 
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foregoing, in the event that the revenue and margin amounts approved by the
board of directors from time to time are not met, the board of directors of
Discreet shall have the right, at its sole discretion, to approve the payment of
a bonus, which amount is solely determined by the compensation committee, if the
board of directors is of the view that your performance was outstanding and the
failure to meet the revenue and margin amounts was not attributable to factors
within your control.

3.  Reimbursement
    -------------

Discreet will reimburse you, upon presentation of appropriate receipts or other
evidence thereof, all expenses and fees reasonably incurred by you in the
exercise of your functions hereunder, the whole provided that such expenses and
fees were incurred in direct relation to the accomplishment of your duties
hereunder, the whole in accordance with the policy of Discreet then in effect as
modified from time to time at the sole discretion of the board of directors of
Discreet.

4.  Stock Options
    -------------

Discreet will grant you (the "INITIAL GRANT") no later than two weeks following
the Date of Commencement an option to purchase 300,000 common shares in the
share capital of Discreet pursuant to the "Amended and Restated 1994 Restricted
Stock and Stock Option Plan" of Discreet (the "PLAN").  The exercise price of
each option will be an amount equal to the "Fair Market Value" of the optioned
shares (as determined in accordance with the provisions of the Plan) as at the
date on which the Initial Grant shall be approved by the board of directors of
Discreet (the "DATE OF INITIAL GRANT").  Your options pursuant to the Plan will
vest as follows:

<TABLE>
<CAPTION>
   ==========================================================================
   NUMBER OF SHARES                      DATE OF VESTING                     
   --------------------------------------------------------------------------
   <C>                      <S>                                              
         150,000            Date of 2nd anniversary of Date of Initial Grant 
                                                                             
   an additional 75,000     Date of 3rd anniversary of Date of Initial Grant 
                                                                             
   an additional 75,000     Date of 4th anniversary of Date of Initial Grant 
   ========================================================================== 
</TABLE>

The Initial Grant shall be subject to you executing the standard form Stock
Option Agreement as required by the Plan.

In the event of a reorganization as defined in the Plan, then (i) all of your
options to purchase common shares in the share capital of Discreet pursuant to
the Initial Grant shall become immediately vested, or (ii) if the board of
directors of Discreet elects, in accordance with the Plan, not to accelerate the
vesting of the options to purchase common shares granted pursuant to the Plan,
you shall receive in substitution for all

                                      -2-
<PAGE>
 
of your outstanding options to purchase common shares of Discreet, whether
vested or not, such securities (excluding options) of Discreet or of any
amalgamated, merged, consolidated or otherwise reorganized corporation or, only
in the event of an amalgamation of Discreet with one of its subsidiaries,
options of the amalgamated company, all of which securities or options shall be
of equivalent value and liquidity.

5.   Duration and Termination
     ------------------------

This agreement is for an indeterminate term commencing on July 23, 1996 (the
"DATE OF COMMENCEMENT").

This agreement may be terminated, except for continuing obligations hereunder as
at any such termination, in any of the following eventualities and with the
following consequences:

(a)  at any time, for Cause, on simple notice from Discreet to you the whole
     without any other notice or any pay in lieu of notice or any indemnity
     whatsoever from Discreet to you, and any further claims or recourse by you
     against Discreet or its affiliates in respect of such termination;

(b)  upon three (3) months notice in writing from you to Discreet, specifying
     your intention to resign, in which event Discreet shall only be obliged to
     pay you your remuneration hereunder for such remaining part of the period
     specified in your notice, and Discreet shall have no further obligations
     hereunder in the event of your resignation, it being understood that you
     shall not benefit, after your resignation, from any additional vesting of
     your options to purchase common shares referred to herein; or

(c)  upon written notice from Discreet to you in the event of termination of
     your employment without Cause, in which event Discreet shall pay you an
     indemnity in lieu of notice in a lump sum equal to twelve (12) months of
     your Salary at the time of termination, and Discreet shall have no further
     obligations hereunder in the event of such termination of your employment,
     and you shall have no further claims or recourse against Discreet or any of
     its affiliates in respect of such termination.  Notwithstanding any
     provision herein to the contrary, if your employment with Discreet is
     terminated without Cause after the first anniversary date of the Date of
     Commencement, then the options to purchase common shares of Discreet which
     would have vested next as set forth above shall immediately vest. In
     addition, in the event that you are terminated without cause, Discreet
     shall reimburse you, upon presentation of appropriate receipts and
     justifications, all reasonable moving expenses incurred by yourself in
     connection with your move from Montreal, such expenses to be approved by
     Discreet before being incurred, which moving expenses shall not exceed US
     $20,000.

                                      -3-
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"CAUSE" shall mean cause for dismissal without either notice or payment in lieu
of notice for reasons of fraud, embezzlement, gross negligence, wilful and
careless disregard or gross dereliction of duty, incapacity or refusal to
perform employment functions due to drug use or alcohol addiction, conviction of
a felony, serious breach of duty not corrected within thirty (30) days of notice
to that effect and discriminatory practices governed by statute.

6.  Benefit Plans and Vacation
    --------------------------

You shall have the right to participate to all benefit programs and/or plans
granted to senior employees of Discreet, the whole in accordance with the actual
programs or plans that Discreet may institute from time to time.  You shall be
granted a minimum of four (4) weeks of annual vacation for each whole calendar
year of this agreement.

7.   Non-Competition
     ---------------

Without the prior written approval of Discreet, you agree not, during your
employment with Discreet and for a subsequent period of twelve (12) months
thereafter, on your own behalf or on behalf of any other person, whether
directly or indirectly, in any capacity whatsoever alone, or through or in
connection with any person, carry on or be engaged in or do consulting work for
or have any financial or other interest in or be otherwise commercially involved
in any endeavour, activity or business in all or part of the Territory (as
hereinafter defined) which is in competition with the Business (as hereinafter
defined) or which provides similar competitive services.  Notwithstanding any
provision herein to the contrary, including paragraph 5(c), in the event of a
termination of your employment without Cause, if you decide to, directly or
indirectly, in any capacity to carry on or be engaged in or do consulting work
for or have a financial or other interest in or be otherwise commercially
involved in any endeavour, activity or business which is in competition with the
Business or which provides similar competitive services before the expiration of
the aforesaid twelve (12) month period, you shall cease to be bound by the
provisions of this paragraph 7 provided that Discreet shall have no further
obligation to pay you (or you shall reimburse) any severance set forth in
paragraph 5(c) in respect of any period commencing on the date you agree to so
compete with the Business or be involved in a business which provides similar
competitive services.

"TERRITORY" shall mean worldwide.

"BUSINESS" shall mean the business now and heretofore conducted by Discreet, its
subsidiaries and its affiliates provided that such affiliate is in a business
similar or related to the business of Discreet and its subsidiaries.

                                      -4-
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8.   Confidentiality and Non-Disclosure
     ----------------------------------

You hereby expressly covenant and agree that you shall not, during and for a
period of ten years following termination of your employment with Discreet,
disclose any Confidential Information (as hereinafter defined) to any person
other than such persons as expressly approved by Discreet nor use any
Confidential Information for your own benefit, or for the benefit of any other
person, or for any purpose other than within the scope of your employment by
Discreet.

"CONFIDENTIAL INFORMATION" shall mean confidential, secret or proprietary
information of Discreet or related to the Business, whether recorded or not,
howsoever received or generated by Discreet or you from, through or relating to
Discreet or the Business and in whatever from (whether oral, written, machine
readable or otherwise) which pertains to Discreet, its affiliates, its
subsidiaries or the Business.  "Confidential Information" shall not include
information which (i) is in the public domain, without any fault or violation of
this agreement on your part, (ii) is generally disclosed by Discreet without any
restriction to third parties, (iii) is properly within your legitimate
possession prior to its disclosure hereunder and without any obligation of
confidences attaching thereto, (iv) after disclosure, is lawfully received by
you from another person who is lawfully in possession of such Confidential
Information and such other person was not restricted from disclosing the said
information to you and (v) you are legally compelled to divulge by order of a
governmental agency or a court of competent jurisdiction.

9.   Moving  Expenses
     ----------------

Discreet shall reimburse you, upon presentation of appropriate receipts and
justifications, all reasonable moving expenses incurred by yourself in
connection with your relocation to Montreal, such expenses to be approved by
Discreet before being incurred.

In the event that Discreet terminates your employment without cause, Discreet
will reimburse you for your moving expenses from Montreal up to a maximum amount
of US $20,000, upon presentation of appropriate receipts and justifications,
such expenses to be approved by Discreet before being incurred.

10.  Property
     --------

Confidential Information and the documents, works, instruments, media or other
embodiments of or containing Confidential Information shall remain the property
of Discreet and be returned to Discreet upon request, or, at the latest,
immediately upon any termination of your employment.

                                      -5-
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11.  General Provisions
     ------------------

This agreement shall be governed, interpreted and construed by and in accordance
with the laws of the Province of Quebec and the laws of Canada applicable
therein.

This offer of employment is subject to receipt of satisfactory references.

You hereby acknowledge having received a copy of the Plan.

The parties acknowledge that they have requested and are satisfied that this
agreement and all related documents be drawn up in the English language;  les
parties aux presentes reconnaissent qu'ils ont exigees que la presente
convention et touts documents qui s'y rattachent soient rediges en langue
anglaise et s'en declarent satisfaites.

If you wish to accept this position, please sign and return a signed copy to us.

We are delighted to have you join us.


/s/ Richard J. Szalwinski

Richard J. Szalwinski



ACCEPTED at Montreal, Quebec, on this 26 day of September, 1997.


/s/ Graham Sharp
---------------------------------------
Graham Sharp

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