VP Sales - Employment Letter Agreement, Sam Morcos, dated May 20, 2005

EXHIBIT 10.2


May 20, 2005

Sam Morcos

27 Chesswood Crt. Nepean, ON K2E 7E3


Dear Sam,


We are pleased to confirm in writing the terms of your employment in the position of Senior Vice President, Sales of Entrust Limited (" Entrust" ) reporting to Bill Conner, commencing on May 20, 2005 (" Commencement Date" ).

Base Salary


Your base salary on an annualized basis will be $250,000.00 CDN, which will be paid biweekly. Your salary and performance will be subject to review on an annual basis. The responsibilities of this position have been reviewed with you and you understand that your sales territory will be U.S. enterprise, Latin America, South Asia (exclusive of China and Japan) and such other regions or the world as the CEO may require in the future. However, should you have any questions, please contact Bill Conner.

Sales Incentive


Subject to your agreement to an annual sales compensation plan as approved of by the Compensation Committee of the Board of Directors for Entrust, Inc. (" Compensation Committee" ), your annual sales incentive potential will be $180,000.00 CDN at 100% achievement of the objectives and revenue targets set out in such sales compensation plan. The Compensation Committee may amend the annual incentive plan at any time with respect to future incentives or awards through notice to you; however, any incentives or awards earned up to the date of modification will be distributed in accordance with the plan provisions at the time they were earned. In spite of the foregoing, you will in any event receive this sales incentive of $20,000.00 CDN in each of the second and third quarter of 2005 notwithstanding the terms of the plan (" Minimum Payments" ); provided, however, that any sales incentive due to you under the incentive plan in respect of such calendar quarters will be offset against such Minimum Payments.


Stock Options and Restricted Stock Units


Additionally, you will be offered a stock option award to purchase 150,000 shares of common stock of Entrust, Inc. This award is subject to your acceptance of the terms and conditions of an Option Award Agreement that must be executed by you and the terms and conditions of the applicable Entrust' s Amended and Restated 1996 Stock Incentive Plan. Both of these documents will be provided to you in due course. The strike price for this award will be equal to the fair market value of the common stock at close of business on your Commencement Date. The option will have an expiration date which is seven years from the Commencement Date and the vesting conditions that will be outlined in your Option Award Agreement will include the following: (i) this option will become exercisable as to 50% of the original number of shares on the Commencement Date; and (ii) after the first anniversary of the Commencement Date this option will become exercisable as to an additional 1/36th of the remaining number of shares on that day of the month for each of the next 36 months after such first anniversary.


Additionally, you will be offered 15,000 shares of Restricted Stock Units (" RSU" ) for Entrust, Inc. This award will be subject to the terms and conditions of an RSU Award Agreement to be executed by you, as well as Entrust' s Amended and Restated 1996 Stock Incentive Plan. Both of these documents will be provided to you in due course. The Restricted Stock Unit shall vest, in whole or in part, as to 25% of the shares subject to the Award Agreement shall vest on each of the first, second, third and fourth anniversaries of the Commencement Date, subject to you continuing to be a Service Provider (as defined in the Plan) through each such dates.


As an officer of Entrust, both of the aforementioned grants will be subject to acceleration upon certain acquisition events as set forth in the governing award agreements and plan.


Vacation

Subject to the terms of Entrust' s Paid Time-Off Policy for Canada, as amended from time to time by Entrust, your vacation is set at 20 business days per annum, which will accrue on a per pay period basis.

Notice and Severance Entitlements

We believe that your abilities and our needs are compatible and that your acceptance of this offer will prove mutually beneficial. However, it is understood and agreed that your employment is terminable at the will of either party and is not an employment agreement for a year or any other specified term.

If your employment is terminated by Entrust and you decline to sign and return Entrust' s then-standard release and severance agreement (" Separation Agreement" ) in a timely manner, th ...