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EXHIBIT 10.3
[LOGO OF AUTHORISZOR]
October 4, 2000
Mr. Paul Ayres
19 Elmfield Avenue
Teddington,
Middlesex TW11 8BU
ENGLAND
Re: Offer of Employment
-----------------------
Dear Paul:
Authoriszor Inc. is pleased to extend to you this offer of employment as
Managing Director for its Authoriszor Ltd. operation. The details of your offer
are as follows:
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[ ] Reporting to: President & CEO
[ ] Start Date: October 9, 2000
[ ] Annual Base Salary: (Pounds)185,000
[ ] Annual Incentive Bonus: (Pounds)140,000
[ ] Annual Target Income: (Pounds)325,000 (without the additional incentives)
(Pounds)355,000 (with the additional incentives)
[ ] Stock Options: 200,000 stock options vesting annually
over 4 years @ 25% per year. Strike price will
be established in accordance with the
company's policy (i.e. the stock option
price is the price of the stock at the market
close on the last business day prior to your start
date).
[ ] Private Health Insurance: BUPA.
Authoriszor Ltd. will pay 100% for self and partner.
[ ] Death and Service Benefits: Authoriszor Ltd. will contribute up to 4 times your
annual salary up to I.R. limit of (Pounds)367,200.
[ ] Pension Plan: Authoriszor Ltd. will contribute 7.5% to a scheme of
your choice.
[ ] Annual Vacation: Four weeks
[ ] Car: Company will provide you with (Pounds)900 per month as a car
allowance during your employment.
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Mr. Paul Ayres
October 4, 2000
Page 2
FY01 COMPENSATION PLAN
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Annual Target Income:
Base salary: (Pounds) 185,000
Revenue Bonus @ 100% (Pounds) 140,000
2Q Fast Start Bonus: (Pounds) 20,000
5 Reference Accounts Bonus: (Pounds) 10,000
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Target Income: (Pounds) 355,000
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Authoriszor agrees to pay a `guaranteed' bonus at 50% of the bonus plan outlined
in `FY01 compensation plan' for an initial 90 day period from stated start date
of October 9, 2000.
Revenue Bonus Plan
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Annual Revenue Budget: (Pounds)5,419,067 (July 1, 2000 - June 30, 2001)
Revenue Quota: (Pounds)4,000,000 (prorated October 1, 2000 - June 30, 2001)
Revenue Bonus
Attainment of Revenue goal:
0% - 99% 1.75% of revenue
100% - 124% + 1.75% of revenue
125+% + 0.7% of revenue
1H Fast Start Bonus
If you attain the 2Q01 revenue goal of (Pounds)400,000, you will receive an
additional 5% commission on the recorded revenues.
Five Reference Accounts Bonus
By December 31, 2000 if Authoriszor Ltd. secures 5 reference accounts (i.e.
recognized firms; and these accounts agree to be a reference account for other
prospects; and they agree to allow Authoriszor to issue a press release on their
purchase) then you will receive a binary (Pounds)10,000 bonus.
Other Employment Provisions:
(a) Services Contract: Authoriszor will provide you with an employment term
guarantee of 12 months. In the event that: a) you do not voluntarily
leave Authoriszor during this term; or b) you are not terminated with cause
during these 12 months, Authoriszor will pay you the balance of your base
salary up to your 12th month.
(b) Notice Period: Six months, after the first year.
(c) Change of Ownership: In the event that there is a change in ownership with
Authoriszor Inc. because the company is acquired during your vesting
period, your unvested stock options provided in this offer will be fully
vested.
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Mr. Paul Ayres
October 4, 2000
Page 3
(d) Termination for Just Cause: The Employee's employment may be terminated for
"just cause", examples of which are defined as follows:
The Company may unilaterally terminate the Employee's employment hereunder
"for just cause" at any time during the term of this agreement. Termination
of the Employee's employment by the Company shall constitute a termination
"for just cause" if such termination is for one or more of the following
causes: (i) willful misconduct of the Employee in connection with the
performance of his assigned duties; (ii) the Employee's willful, material
breach of this Agreement or the willful breach of duties, which results in
damage or injury to the Company or adversely affects the business
activities, operations, reputation, goodwill or image of the Company or its
customers, (iii) the conviction of the Employee of a felony or proven
commission (i.e., a substantiated allegation) of an act of fraud or
embezzlement, either in connection with the performance of his obligations
to the Company or which materially adversely affects the Employee's ability
to perform such obligations, or which adversely affects the business
activities, operations, reputation, goodwill or image of the Company; (iv)
breach of fiduciary duty as an officer of the Company; (v) the willful
commission by Employee of an act which induces any employee or customer of
the Company to break a contract with the Company, other than at the request
of the Company; or (vi) knowingly infringes or misappropriates any
intellectual property of the Company, including without limitation any
trade secrets of any third party.
Any action or inaction or omission on the Employee's part shall be
considered willful if taken, or omitted to be taken, as the case may be, by
the Employee without a reasonable belief that the action or omission was in
the best interest of the Company or that the act or omission was in good
faith. After notice of termination for cause has been delivered to the
Employee, the Employee shall be entitled to have the grounds for
termination of employment reviewed by the Board of Directors, provided such
entitlement to review shall not serve to extend the date upon which the
termination of employment shall become effective. In making any
determination under this Section, the Board of Directors shall act fairly
and in utmost good faith and shall give the Employee an opportunity to
appear and be heard with counsel at a meeting of the Board of Directors and
present evidence on his behalf.
In the event of any such termination for "cause," the Employee shall be
entitled to receive upon termination to: (i) earned and unpaid salary,
bonus and vacation through the termination date, (ii) benefits for the
applicable period permitted by statute, provided Employee makes the
appropriate voluntary contribution payments, and subject to applicable law
and the requirements of the Company's health and insurance plans then in
effect, (iii) vested options (to the extent then vested) and (iv) no other
severance or other compensation benefits, other than payments which are
required by law to be provided to all discharged employees.
(e) Voluntary Termination. The Employee may voluntarily terminate his
employment at any time by providing the Company with forty-five (45) days
prior written notice of termination. In the event of any such voluntary
termination by the Employee, the Employee shall be entitled to (i) accrued
and unpaid salary, bonus, and vacation through
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the termination date, (ii) benefits for the applicable period permitted by
statute,
Mr. Paul Ayres
October 4, 2000
Page 4
provided Employee makes the appropriate voluntary contribution payments,
and subject to applicable law and the requirements of the Company's health
and insurance plans then in effect, (iii) vested options (to the extent
then vested) and (iv) no other severance or other compensation benefits,
other than payments which are required by law to be provided to all
discharged employees.
(f) At the Election of the Company for Reasons Other Than Just Cause. The
Company may, immediately and unilaterally, terminate the Employee's
employment hereunder at any time during the term of this Agreement without
"cause" by giving thirty (30) days' advance written notice to the Employee
of the Company's election to terminate. During such period, the Employee
will be available on a full-time basis for the benefit of the Company to
assist the Company in matters relating to the transition of a new,
successor officer of the Company. In the event the Company exercises its
right to terminate the Employee under this section during the first year,
the Company agrees to pay the Employee a severance or termination payment
of twelve months' base salary at the then current base rate, payable in the
same manner as such salary was payable during the term of the Employee's
employment. Such severance payment shall be payable on a monthly basis for
the twelve (12) months following the Employee's termination and shall be
subject to all applicable federal and state taxes, and this obligation
shall survive termination of this Agreement. In addition, the Employee
shall be entitled to (i) accrued and unpaid salary, bonus, and vacation
through the termination date, (ii) Health benefits for the applicable
period permitted by statute, provided Employee makes the appropriate
voluntary contribution payments, and subject to applicable law and the
requirements of the Company's health and insurance plans then in effect,
(iii) vested options, and (iv) 50% of the unvested stock provided in this
agreement.
In the event the Company exercises its right to terminate the Employee
under this section after the first year of employment, the Company agrees
to pay the Employee a severance or termination payment of six months' base
salary at the then current base rate, payable in the same manner as such
salary was payable during the term of the Employee's employment.
Such severance payment shall be payable on a monthly basis for the six (6)
months following the Employee's termination and shall be subject to all
applicable statutory taxes, and this obligation shall survive termination
of this Agreement. In addition, the Employee shall be entitled to (i)
accrued and unpaid salary, bonus, and vacation through the termination
date, (ii) benefits for the applicable period permitted by statute,
provided Employee makes the appropriate voluntary contribution payments,
and subject to applicable law and the requirements of the Company's health
and insurance plans then in effect, (iii) vested options, and (iv) 50% of
the unvested stock provided in this agreement.
It shall be deemed to be a constructive termination "without cause" if: (i)
the Employee's responsibilities are reduced or diluted in any material way;
(ii) the Employee's annual salary or bonus arrangement is reduced in any
material way; or (iii) the Employee is relocated to another Company office
or facility to a location outside of a radius of 100 miles from the
Company's current facility or without the Employee's written consent; or
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Mr. Paul Ayres
October 4, 2000
Page 5
(iv) there occurs a determination by the Employee made in good faith that as
a result of any material change in the scope of the business or other
activities for which he is responsible, he has been rendered unable to carry
out, has been hindered in the performance of, or has suffered a reduction
in, in a material way, of any of the authorities, powers, functions,
responsibilities or duties attached to the officer position held by
employee, which situation is not remedied within 30 business days after
written notice to Company from Employee of such determination.
g) Change of Ownership: In the event that there is a change of ownership of
more than 50% in a single or series of transactions, the option shares'
restrictions will be lifted and the remaining unvested shares of this
agreement will vest and become immediately exercisable;
h) Governing Law: This Agreement shall be governed and construed in accordance
with the laws of England.
i) Insider Trading Policy: You agree to comply with the Company's Insider
Trading Policy ("Policy") [attached], as the Policy may be amended or
supplemented from time to time, during your employment with the Company.
Paul, with your significant sales and general management skills, the growing
marketplace requirements for Authoriszor's solutions, and the corporate
management support that you have available to your from the company and the
Board, I am confident that Authoriszor can provide you with the opportunity to
fulfill your career and financial income objectives.
Please initial each page, sign, and provide me with a copy of this signed letter
confirming your acceptance of this offer of employment. This offer expires on
Sunday, October 8, 2000.
We are looking forward to your valued contributions to our Authoriszor Team.
Best regards,
____________________
Richard A. Langevin
President & CEO
Agreed: Accepted:
_______________________________ ______________________________
Paul Ayres Richard A. Langevin
Date:__________________________ Date:_________________________
