Exhibit 10.5


                                 XOX CORPORATION
                               NON-COMPETITION AND
                              EMPLOYMENT AGREEMENT


         This Non-Competition and Employment Agreement ("Agreement") is made
effective the 22nd day of August, 2000, by and between XOX Corporation
("Employer" or "Company") and John Sutton ("Employee"). (The term "Employer"
includes any present or future related or affiliated companies.)

         WHEREAS, Employer desires to employ Employee as its Chief Executive
Officer and Employee desires to be employed by Employer in such capacity.

         WHEREAS, Employee and Employer recognize the importance to Employer of
protecting Employer's rights with customers' respect to its business information
and inventions, as well as its business relationships, goodwill and potential
competitors.

         WHEREAS, Employer has advised Employee that it requires Employee to
execute this Agreement prior to Employee's commencement of employment as a
condition thereof, and Employee acknowledges receiving a photocopy of this
Agreement prior to Employee's employment with the Company.

         NOW, THEREFORE, in consideration of the foregoing and the mutual
promises contained in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties, intending to be legally bound, agree as follows:

1.       EMPLOYMENT

         (a) Duties. Employer agrees to employ Employee as its Chief Executive
         Officer. In this capacity, he shall perform such executive and
         managerial duties consistent with such position as the Company's Board
         of Directors shall from time to time direct. The duties shall include,
         but not be limited to, the following: responsibility for the overall
         day-to-day operations of the Company, including sales and marketing
         functions; restructuring, remarketing and repositioning the geoscience
         business of the Company in the marketplace; directing the Company's
         efforts to identify synergistic acquisition(s) and/or merger(s) to
         advance the Company's business interests; and, further, to engage in
         the normal and customary strategic operating duties that are consistent
         with duties performed by a Chief Executive Officer. Employee shall
         devote at least five (5) hours per day to the business of the Company
         and the performance of his duties shall occur at such location as the
         Company's Board of Directors reasonably requests. In connection with
         his duties as Chief Executive Officer, Employee will be expected to
         travel extensively and, in connection with such travel, he shall be
         available to the Company for more than five (5) hours per day. Employee
         accepts such employment and agrees, so long as he continues to be
         employed by

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         Employer, to devote his full time efforts and skills to the conduct of
         Employer's business operations, performing such duties as are
         ordinarily performed by an employee in his position. Employee agrees to
         serve Employer diligently and faithfully to advance its best interests.
         Notwithstanding the foregoing, Employee is an employee at will, and
         Employer and Employee each has the right to terminate Employee's
         employment at any time, with or without Cause (as defined herein),
         under this Agreement.

         (b) Prohibition and Allowance of Other Activities. Employee will not,
         without the express written permission of Employer, engage in any
         substantial private business activities (whether or not entered into
         for profit) outside, or separate from his employment with Employer
         which would materially affect Employee's ability to perform his
         obligations hereunder. Nothing in this Agreement prohibits Employee
         from investing financial resources in a business enterprise or
         continuing his involvement with Value Technologies Group, LLC d/b/a The
         Value Group and Made In The Shades Optical, Inc., so long as such
         investment or involvement does not violate Section 5 of this Agreement.
         Further, (i) Employee shall not be in breach of the minimum five (5)
         hour per day requirement if Employee, in his reasonable discretion,
         deems it necessary to spend additional time on matters relating to Made
         In The Shades Optical, Inc. and (ii) Employee may perform work for
         Value Technologies Group, LLC while on the premises of Employer, so
         long as such time and work described under (i) or (ii) does not
         interfere with Employee's performance of his obligations and duties
         hereunder.

2.       COMPENSATION

         (a) Salary. Upon execution of this Agreement, Employee shall receive a
         monthly base salary (the "Base Salary"), paid according to the
         Company's customary and usual payroll practices and subject to state
         and federal taxes, social security and other applicable withholdings,
         equal to Seven Thousand Five Hundred dollars ($7,500). Salary increases
         and any other benefits, if any, are to be paid as determined by
         Employer's Board of Directors, in its sole discretion.

         (b) Bonus. Employee may be eligible to receive a bonus for performing
         as Chief Executive Officer. Whether a bonus will be paid and the amount
         of that bonus shall be within the sole discretion of the Company's
         Board of Directors.

         (c) Expenses. Upon receipt of documentation or receipts evidencing
         expenditures by Employee, Employer will reimburse Employee for any
         approved direct out-of-pocket expenses actually incurred in connection
         with his relationship with Employer hereunder including, without
         limitation, travel and hotel expenses.

         (d) Vacations. In addition to any other compensation provided under
         this Agreement, the Employee shall be entitled to vacation in
         accordance with the Company's policies as in effect from time to time.
         At a minimum, the Employee is entitled to two (2) weeks of paid
         vacation after one (1) year of employment.

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         (e) Deductions and Withholding. All compensation and other benefits
         payable to or on behalf of the Employee pursuant to this Agreement
         shall be subject to such deductions and withholding as may be agreed to
         by the Employee or required by applicable law.

         (f) Stock Options. Employee is hereby granted a 10-year non-qualified
         stock option pursuant to the Company's 1996 Stock Option Plan (the
         "Option") to purchase one hundred twenty-five thousand (125,000) shares
         of the Company's common stock pursuant to a stock option agreement (the
         "Stock Option Agreement"). The exercise price per share shall be One
         Dollar and Sixty-six Cents ($1.66), which price is not less than the
         fair market value of the Company's Common Stock as of the date of this
         Agreement. Subject to the terms of the Stock Option Agreement, so long
         as Employee remains employed by Employer, the shares of stock subject
         to the Option shall vest as follows:

                           (i) twelve thousand five hundred (12,500) shares will
                  vest upon completion of six (6) consecutive months of
                  employment assuming that the Board of Directors of the Company
                  determines, in its sole discretion, that Employee has devoted
                  his best efforts to the performance of his duties;

                           (ii) an additional twenty-five thousand (25,000)
                  shares shall vest upon the Company achieving sales revenue
                  from normal operations (the "Revenue") equal to or in excess
                  of Three Million Dollars ($3,000,000) during any four (4)
                  consecutive calendar quarters. The Revenue shall be determined
                  in accordance with generally accepted accounting principles
                  and shall only include amounts generated from ordinary course
                  sales of products and/or services by the Company. Proceeds
                  from short-term investment of reasonable working capital and
                  other proceeds of investments, proceeds from the sale, lease,
                  or other disposition of assets, including mergers and
                  acquisitions, not in the ordinary course of business, proceeds
                  from the sale or issuance of securities, and other
                  non-operating income shall all be specifically excluded from
                  the calculation of Revenue. The decision of the Company's
                  independent accountants as to what constitutes Revenue shall
                  be conclusive absent bad faith;

                           (iii) an additional fifty thousand (50,000) shares
                  shall vest upon the Company achieving Revenue equal to or in
                  excess of Four Million Dollars ($4,000,000) during any four
                  (4) consecutive quarter period;

                           (iv) an additional twenty-five thousand (25,000)
                  shares shall vest upon the Company achieving Revenue equal to
                  or in excess of Five Million Dollars ($5,000,000) during any
                  four (4) consecutive calendar quarters; and

                           (v) an additional twelve thousand five hundred
                  (12,500) shares shall vest upon the Company achieving Revenue
                  equal to or in excess of Six Million Dollars ($6,000,000)
                  during any four (4) consecutive calendar quarters.

         For example, in the event that options referenced in Section 2(f)(i)
above have vested and

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the Company's Revenue for the third quarter of 2000 equaled $500,000, for the
fourth quarter of 2000 equaled $750,000, for the first quarter of 2001 equaled
$1,000,000, for the second quarter of 2001 equaled $800,000, for the third
quarter of 2001 equaled $1,500,000, and for the fourth quarter of 2001 equaled
$2,800,000, a total of 37,500 shares would vest and be exercisable at the end of
the second quarter of 2001 (12,500 + 25,000), a total of 112,500 shares would
vest and be exercisable at the end of the third quarter of 2001 (12,500 + 25,000
+ 50,000 + 25,000), and all 125,000 shares would vest and be exercisable at the
end of the fourth quarter of 2001 (12,500 + 25,000 + 50,000 + 25,000 + 12,500)
(each example assumes the Board of Directors determined that Employee devoted
his best efforts to the performance of his duties).

         In the event Employee ceases to be an employee with the Company at any
time prior to September 30, 2003, the Option shall no longer continue to vest
and any options not vested are null and void. In addition, as to any vested
stock options, Employee must exercise those options within one hundred twenty
(120) days of the date Employee ceases being an employee. Notwithstanding the
foregoing, in the event that Employee is terminated for Cause as defined in
Section 3(b)(1)(b)(i)-(vi), any previously vested options shall immediately
terminate and be null, void, and unexercisable thereafter.

3.       TERM AND TERMINATION

         (a) Term. Employee's employment hereunder is terminable at will by
         Employer or Employee at any time. Accordingly, Employer or Employee may
         terminate Employee's employment at any time with or without Cause, as
         defined herein.

         (b) Termination. Notwithstanding the foregoing, the following
         provisions apply upon any termination (whether voluntary or
         involuntary) of Employee's employment prior to September 30, 2003.

                           (1) Termination by Employer for Cause. The Company
                  may terminate Employee for Cause immediately upon delivery of
                  written notice of such termination for Cause. In the event
                  that Employee's employment hereunder is terminated by Employer
                  for Cause (as defined below):

                                    a. Employer shall pay to Employee only the
                           Base Salary previously approved by the Board of
                           Directors and earned on or prior to the date of
                           termination. Options shall be exercisable only as
                           provided elsewhere in this Agreement.

                                    b. For purposes of this Agreement, "Cause"
                           will mean Employee's (i) habitual use or abuse of
                           illegal drugs and/or alcohol during working hours or
                           materially affecting performance during working
                           hours; (ii) commission of a misdemeanor involving
                           fraud or moral turpitude or any felony; (iii) the
                           commission of any act or omission involving
                           dishonesty, disloyalty or fraud with respect to
                           Employer; (iv) conduct that is reasonably determined
                           to bring Employer or any of its affiliates into

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                           substantial public disgrace or disrepute; (v)
                           misappropriation of any of Employer's assets; (vi)
                           failure of Employee to comply with the provisions of
                           Section 5 of this Agreement; (vii) substantial and
                           repeated failure of Employee to perform its duties as
                           reasonably directed by Employee's Board of Directors
                           which is not immediately remedied after Employee's
                           receipt of written notice of such violation from
                           Employer; (viii) negligence or misconduct with
                           respect to Employer which is not immediately remedied
                           after Employee's receipt of written notice of such
                           violation from Employer; or (ix) substantial and
                           repeated failure to follow lawful written directions
                           of the Company's Board of Directors or Executive
                           Committee which is not immediately remedied after
                           Employee's receipt of written notice from Employer.
                           As used herein, "immediately remedied" shall mean the
                           cure by Employee of the Cause described in the notice
                           within one (1) business day after receipt of such
                           written notice thereof.

                  (2) Termination By Employer Without Cause. The Company may
                  terminate Employee at any time without Cause upon thirty (30)
                  days prior written notice to Employee. In the event that
                  Employee's employment hereunder is terminated by Employer
                  without Cause:

                                    a. Employer shall, in consideration of the
                           release contained in Section 3(b)(4) below and any
                           other separation agreement, if any, executed between
                           the parties, continue to pay to Employee all of the
                           Base Salary that Employee would have otherwise been
                           entitled to hereunder had Employee still been
                           employed by Employer for a period of six (6) months
                           from the date of such termination without Cause (the
                           "Severance Payment"). Payment of the Severance
                           Payment shall be made in accordance with Employer's
                           regular payroll practices and schedule, or as
                           otherwise mutually determined by Employer and
                           Employee. No Severance Payment shall be made if (i)
                           Employer terminates Employee's employment for Cause,
                           (ii) Employee voluntarily terminates his employment
                           with Employer or (iii) Employee's termination of
                           employment is due to Employee's death or disability.

                  (3) Termination by Employee. Employee may terminate his
                  employment at any time and for any reason by providing one
                  hundred and eighty (180) days prior written notice to
                  Employer.

                                    a. In the event Employee fails to provide
                           such required notice of termination, the Option
                           described in Section 2(f) above shall immediately
                           terminate, be null and void, and shall not be
                           exercisable by Employee, regardless of whether it has
                           vested.

                                    b. In the event that Employee gives prior
                           written notice so that his

<PAGE>


                           employment would terminate with the Company (for any
                           reason other than Employee's death or Disability)
                           within one (1) year of the date of this Agreement,
                           Employee shall pay to the Company, within thirty (30)
                           days of such termination, the sum of Thirty Seven
                           Thousand Five Hundred Dollars ($37,500) (the
                           "Liquidated Damages"). In addition, notwithstanding
                           anything in this Agreement, the Options shall become
                           null and void, and shall not be exercisable after
                           such termination. Employer shall be entitled to
                           offset from any amounts owed to Employee as of the
                           date of such termination by Employee the Liquidated
                           Damages. Employee recognizes that the Company will
                           expend significant amounts of time, effort and money
                           to find a suitable replacement. The amount of time,
                           effort and money that may be extended is not
                           reasonably susceptible of accurate calculation.
                           Accordingly, the Liquidated Damages is intended by
                           the parties to compensate the Company for this time,
                           effort and expense and shall be considered as
                           liquidated damages.

                  (4) No Further Liability: Release. Payment made and
                  performance by Employer in accordance with this Section shall
                  operate to fully discharge and release each party and their
                  respective directors, officers, employees, subsidiaries,
                  affiliates, stockholders, successors, assigns, agents and
                  representatives from any further obligation or liability with
                  respect to Employee's employment and termination of
                  employment. Employer shall have the right to condition the
                  Severance Payment or other amounts pursuant hereto upon the
                  delivery by Employee to Employer of a release in form and
                  substance satisfactory to Employer of any and all claims each
                  party has or may have against the other party and all and each
                  of their past and present parent, subsidiary, and affiliated
                  entities; and all and each of the past and present officers,
                  directors, employees, stockholders, successors, assigns,
                  agents, insurers, and representatives of the foregoing
                  entities arising out of or related to Employee's employment by
                  Employer and other relationships with Employer and termination
                  of such employment and other relationships.

4.       CONFIDENTIAL INFORMATION ASSIGNMENT OF INVENTIONS

         (a) "Confidential Information" means information, not generally known,
         and proprietary to Employer or to a third party for whom Employer is
         performing work, including, without limitation, patent or trade secret
         information, about Employer's processes and products, information
         relating to research, development, manufacture, purchasing, accounting,
         engineering, marketing, customer lists, merchandising, selling,
         leasing, servicing, finance and business systems and techniques. All
         information disclosed to Employee, or to which Employee obtains access,
         whether originated by Employee or by others, during the period of his
         employment, which he has reasonable basis to believe to be Confidential
         Information, or which is treated by Employer as being Confidential
         Information, shall be presumed to be Confidential Information.

<PAGE>


         (b) "Inventions" means discoveries, improvements and ideas (whether or
         not shown or described in writing or reduced to practice) and works of
         authorship, whether or not patentable or copyrightable, (1) which
         relate directly to the business of Employer, or (2) which relate to
         Employer's actual or demonstrably anticipated research or development,
         or (3) which result from any work performed by Employee for Employer,
         (4) for which equipment, supplies, facility or trade secret information
         of Employer is used, or (5) which is developed on any Employer time.

         (c) With respect to Inventions made, authored or conceived by Employer,
         either solely or jointly with others during his employment, whether or
         not during normal working hours or whether or not at Employer's
         premises, Employee will:

                  (1) Keep accurate, complete and timely records of such
                  Inventions, which records shall be Employer property and be
                  retained on Employer's premises.

                  (2) Promptly and fully disclose and describe such Inventions
                  in writing to Employer.

                  (3) Assign to Employer all of his rights to such Inventions,
                  and to applications for letters patent and/or copyright in all
                  countries and to letters patent and/or copyrights granted upon
                  such Inventions in all countries.

                  (4) Acknowledge and deliver promptly to Employer (without
                  charge to Employer but at the expense of Employer) such
                  written instruments and to do such other acts as may be
                  necessary in the opinion of Employer to preserve property
                  rights against forfeiture, abandonment or loss and to obtain
                  and maintain letters patent and/or copyrights and to vest the
                  entire right and title thereto in Employer.

         (d) The above provision of this Agreement does not apply to an
         Invention for which no equipment, supplies, facility or trade secret
         information of Employer was used and which was developed entirely on
         Employee's own time, and (1) which does not relate (a) directly to the
         business of Employer or (b) to Employer's actual or demonstrably
         anticipated research or development, or (2) which does not result from
         any work performed by Employee for Employer.

         (e) Except as required in Employee's duties to Employer, Employee will
         never, either during his employment by Employer or thereafter, use or
         disclose any Confidential Information as defined herein.

         (f) Upon termination of his employment with Employer, all records and
         any compositions, articles, devices, and other items which disclose or
         embody Confidential Information, including all copies or specimens
         thereof in Employee's possession, whether prepared or made by Employee
         or others, will be returned by Employer to Employee.

<PAGE>


5.       COVENANT NOT TO COMPETE

         During the term of this Agreement and for a period which is the longer
of three (3) years from the date of this Agreement or one (1) year from the
termination of the Employee's employment with Employer:

         (a) Employee will inform any new employer, before accepting employment,
         of the existence of this Agreement and give such employer a copy of
         this Section 5, Covenant Not to Compete.

         (b) Employee will not, anywhere within the world, directly or
         indirectly, compete in any way with the business of Employer including,
         but not limited to, researching, developing, manufacturing,
         distributing, selling, or attempting to do any of the foregoing, to any
         customer, client or account or any prospective customer, client or
         account of Employer; provided, however, that the foregoing limitation
         shall only apply to activities which involve a Competing Product. As
         used herein, a Competing Product is a product similar to or in
         competition with any product, or planned product of which Employee is
         aware, of the Employer as of the date Employee's employment is
         terminated and includes (i) the development and/or sale of software for
         geometric computing and solid modeling, including but not limited to
         software modeling kernels for sale or license to other software
         developers; or (ii) any other business or product which accounts for,
         or is reasonably anticipated to account for, at least 5% of the
         Company's consolidated gross revenues.

         (c) Employee will not, anywhere within the world, directly or
         indirectly, cause or attempt to cause any customer, client or account
         or any prospective customer, client or account, to divert, terminate,
         limit or in any manner modify or fail to enter into any actual or
         potential business relationship with Employer.

         (d) Employee will not, directly or indirectly, divert, solicit, or
         employ, or attempt to divert, solicit, or employ any employees of
         Employer.

         (e) Employee will not, anywhere within the world, directly or
         indirectly, work for a competitor of Employer which is engaged in the
         manufacturing, development, and marketing of a Competing Product or
         Products (a "Competitive Entity"); provided, however, that a unit,
         division or entity of a related group of entities that includes a
         Competitive Entity shall not be deemed a competitor unless it
         manufactures, develops or markets a Competing Product.

         (f) The phrase "directly or indirectly" shall encompass: (A) all of the
         Employee's activities whether on his own account or as an employee,
         director, officer, agent, consultant, independent contractor, or
         partner of or in any person, firm or corporation (other than the
         Company and its subsidiaries), or (B) the Employee's ownership of more
         than 2% of the voting stock of the corporation, 5% or more of the gross
         income of which is derived from any business or businesses in which the
         Employee may not engage.

<PAGE>


         (g) The phrase "Competing Product" shall mean: (A) the development
         and/or sale of software for geometric computing and solid modeling,
         including but not limited to software modeling kernels for sale or
         license to other software developers; or (B) any other business which
         accounts for, or is reasonably anticipated to account for, at least 5%
         of the Company's consolidated gross revenues.

6.       GENERAL PROVISIONS

         (a) INJUNCTIVE RELIEF. In recognition of the irreparable harm that
         violation of the covenants contained herein would cause Employer,
         Employee agrees that, in addition to any relief afforded by law, an
         injunction against such violation or violations may be issued against
         him and every other person concerned thereby. The parties understand
         that both damages and an injunction shall be proper modes of relief and
         are not to be considered alternative remedies.

         (b) GOVERNING LAW. This Agreement shall be governed by and construed in
         accordance with the laws of the State of Minnesota.

         (c) NO STRICT CONSTRUCTION. The language used in this Agreement shall
         be deemed to be the language chosen by the parties hereto to express
         their mutual intent, and no rule of strict construction shall be
         applied against any person.

         (d) NOTICES. All notices, requests and other communications from any of
         the parties hereto to another shall be in writing and shall be
         personally served or sent by registered or certified mail, return
         receipt requested, and shall be deemed to have been given on the day
         when deposited in the United States mails addressed to the other party
         as follows, provided that either party may from time to time change the
         address to which notices to it are to be sent by giving written notice
         to the other in accordance herewith. Notices to Employer shall be given
         to Employer at its principal office which, as of the date of this
         Agreement, is 7640 West 78th Street, Bloomington, Minnesota 55439.
         Notices to Employee shall be addressed to Employee at Employee's
         residence address as the same appears on Employer's records.

         (e) ENTIRETY OF AGREEMENT. This Agreement constitutes the final
         expression of the parties' agreement, and it is a complete and
         exclusive statement of the terms of that agreement. There are no
         agreements or understandings between Employer and Employee with respect
         to the subject matter hereof except as expressly herein stated. This
         Agreement supersedes and replaces any prior employment agreement
         between the parties, whether oral or written, relating generally to the
         same subject matter. Except as expressly provided herein, so long as
         Employee is employed by Employer, Employee will continue to be subject
         to Employer's written policies and procedures as may be amended from
         time to time and of which Employee receives a copy.

         (f) AMENDMENTS. This Agreement may be modified or rescinded only by an
         instrument in writing signed by Employer and Employee. No amendment,
         alteration or modification of

<PAGE>


         the express terms of this Agreement shall be binding unless set forth
         in an instrument in writing signed by Employer and Employee.

         (g) WAIVER. Waiver by either Employer or Employee of a breach of any
         provision, term or condition hereof shall not be deemed or construed as
         a further or continuing waiver thereof or a waiver of any breach of any
         other provision, term or condition of this Agreement.

         (h) ASSIGNMENT. The rights and obligations of Employer hereunder may be
         transferred or assigned to any successor, representative or assign of
         Employer. No assignment of this Agreement shall be made by Employee,
         and any purported assignment shall be null and void. All obligations of
         Employer and Employee arising out of this Agreement shall be binding
         upon their heirs, spouses, legal representatives, successors and
         permitted assigns. Notwithstanding anything to the contrary herein, the
         assignment of this Agreement by Employer to a third party shall not
         expand or broaden the scope of the non-competition obligations under
         Section 5.

         (i) SEVERABILITY. All provisions of this Agreement shall be deemed
         severable. The enforceability, illegality or invalidity of any
         provision herein or portion thereof shall not affect the
         enforceability, legality or validity of any other, further or
         additional provision hereof, all of which shall remain valid, binding
         and enforceable in accordance with their terms. Should any provision,
         term or condition of this Agreement be held unenforceable, illegal or
         invalid as being too broad with respect to duration, scope or subject
         matter, such provision, term or condition shall be deemed and construed
         to be reduced to the maximum duration, scope or subject matter
         allowable under applicable law.

         (j) AT-WILL EMPLOYMENT. No provision of this Agreement shall be
         construed as giving Employee any right of continuing employment with
         Employer, it being understood that this Agreement and the employment
         relationship between Employer and Employee are terminable at will by
         Employer, with or without cause or reason.

         (k) SURVIVAL OF OBLIGATIONS. Employee's obligations under Paragraphs 4
         and 5 shall survive the termination of this Agreement and Employee's
         employment with Employer.

         (l) COUNTERPARTS. This Agreement may be executed in any number of
         counterparts, each of which shall be deemed an original, but all of
         which shall constitute one and the same instrument.

         (m) CAPTIONS. The captions contained in this Agreement are for
         convenience of reference only and do not affect the meaning of any
         terms or provisions.

         (n) CONSIDERATION; REASONABLE AND NECESSARY PROVISIONS. The parties
         agree that the provisions of this Agreement are reasonable and
         necessary for the protection of Employer and constitute consideration
         for Employee agreeing to be bound by the terms and conditions of this
         Agreement.

<PAGE>


EMPLOYER                                XOX CORPORATION


DATE: August 22, 2000                   By    /s/ Steven Liefschultz
                                           -------------------------------------
                                        Its   Chairman of the Board of Directors
                                            ------------------------------------


EMPLOYEE

DATE: August 22, 2000                         /s/ John Sutton
                                        ----------------------------------------
                                        John Sutton