<PAGE>

                                                                   Exhibit 10.01

April 22, 1999


Leslie J. Alvarez
2750 Northside Drive
Atlanta, GA 30305


Dear Ms. Alvarez:

On behalf of IA Corporation, I am pleased to offer you employment as our Chief
Financial Officer.  You will be reporting to Kevin Moran, Chairman, President
and Chief Executive Officer at a starting salary of $175,000 per year.  In
addition, you are eligible for 40% bonus.  The bonus amount is dependent on
individual performance.  During 1999, IA will guarantee $50,000 bonus payment.
In addition, you will be granted a $20,000 signing bonus to be distributed five
(5) days upon receipt of signed agreement.  Upon employment you will become
eligible for IA's stock option grants of 100,000 shares, which are granted at
the end of the quarter in which you begin working.  The strike price will be
determined by the closing price of the stock on May 10, 1999.  The share options
will vest over a three (3) year period with 30% after year 1, 30% after year 2,
and 40% after year three.

IA will also work with you to include "change of control" provisions in your
agreement.

Consistent with California law, your employment will be "at will" and is
contingent upon your execution of the enclosed Employee Agreement.  Should you
accept this offer, you will become eligible for our benefits plans, the details
of which are described in  the enclosed materials.  We would like you to begin
work on May 10, 1999.  Please contact my assistant Deborah Knoroski at (510)
450-6849 for new hire/benefits processing details.

The Immigration and Reform Act of 1986 require employers to verify the identity
and employment eligibility of all new hires within three (3) business days of
hire.  To assist us in complying with this requirement, please bring the
appropriate documents, as indicated on the enclosed Employment Eligibility Form,
with you on your first day.  The normal starting time is 8:00 - 5:00.  Upon your
arrival on your first day, please ask for Deborah Knoroski.

We hope you will accept this offer and welcome you in advance to IA Corporation.
Kindly acknowledge acceptance of this offer by signing below and returning the
original along with the executed Employee Agreement to me.

Sincerely,

/s/ Kevin D. Moran

Kevin D. Moran
Chairman, President and Chief Executive Officer

KM:dk

Accepted by:

/s/  Leslie J. Alvarez                        4/25/99
----------------------               ------------------------
Name                                           Date
<PAGE>

                              EMPLOYEE AGREEMENT
                              ------------------

Effective:


Agreement between Leslie Alvarez, hereafter referred to as Employee and IA
Corporation, hereinafter referred to as Employer.

Employer and Employee agree as follows:

1.   Employment, Complete Agreement, and Modification
     ------------------------------------------------

     Employer will employ Employee, and Employee will be employed by Employer on
     the terms and conditions hereafter set forth. This Agreement supersedes all
     previous correspondence, promises, representations, and agreements, if any,
     either written or oral. No provision of this Agreement may be modified
     except by a writing signed by both Employer and Employee. This Agreement
     consists of six (6) pages and Attachment A.

2.   Termination of Employment
     -------------------------

     Either party may terminate this Agreement at any time during the duration
     of employment, for any reason whatsoever or for no reason and without
     cause, upon the giving of two (2) weeks notice to the other. However,
     Employer may terminate this Agreement without prior notice during the first
     ninety (90) days of employment, and without notice after the ninety (90)
     days if Employee has misappropriated company property or funds. No policies
     or procedures of Employer or benefits provided by Employer, whether oral or
     written, express or implied, formal or informal, are intended, nor shall
     they be construed, to limit the right or ability of Employer or Employee to
     terminate this Agreement as set forth above. In the event Employee is
     terminated due to a reduction in force, severance pay, if applicable, will
     not reduce Employee's right to prior notice required under this paragraph.
     Employee's employment is and shall be "at will". Except as otherwise agreed
     in writing or as otherwise provided in this Agreement, upon termination of
     employment neither Employer nor Employee shall have any further obligation
     to each other.

3.   Duties and Compensation
     -----------------------

     Employee shall perform any and all duties now or hereafter assigned to
     Employee by Employer, as well as other tasks whether or not assigned by
     Employer, for a salary as may from time to time be fixed by Employer.
     Employee's salary will constitute the full and exclusive monetary
     consideration and compensation for all services performed by Employee, and
     for the performance of all his or her promises and obligations hereunder.

     Employee's salary may be increased or decreased from time to time by
     Employer, in Employer's sole discretion, without violating this Agreement.

                                                                          Page 1
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4.   Other Compensation
     ------------------

     Any additional compensation awarded to Employee (whether by way of bonus
     payment, opportunity to acquire stock, or any other form of additional
     compensation) shall rest in the sole discretion of the Board of Directors
     of Employer, and Employee shall not earn or accrue any right to any such
     additional compensation by reason of his or her employment hereunder.

     Employee's other compensation may be increased or decreased by Employer, in
     Employer's sole discretion without violating this Agreement.

5.   Rules and Regulations
     ---------------------

     Employee will abide by Employer's rules and regulations, and practices
     concerning vacation, sick leave, and other terms and conditions of
     employment, as they may from time to time be adopted or modified.

6.   Employee Benefit Plans
     ----------------------

     Employer may adopt, or continue in force, benefit plans for the benefit of
     all of its employees or only certain of its employees. Such benefit plans
     may include, as examples only, group life insurance, medical insurance,
     401K, and profit sharing plans. Employer, in its sole discretion, may
     increase or decrease the benefits provided by such plan or plans or
     terminate any or all such plans at any time, and may choose not to adopt
     any additional plans, without violating this Agreement. Employee's rights
     under any benefit plans now in force or later adopted by Employer shall be
     governed solely by the terms of such plans.

7.   Expenses
     --------

     Employer will reimburse Employee for all substantiated reasonable travel
     and out-of-pocket expenses incurred in accordance with Employer's travel
     policy.

     If Employer pays for relocation of Employee, and Employee resigns the
     employ of Employer within one (1) year of such relocation, Employee shall,
     within ten (10) days of his or her resignation, pay to Employer any moving
     expenses related to such relocation previously paid or reimbursed by
     Employer.

8.   Noncompetition by Employee during Employment
     --------------------------------------------

     During his or her employment, Employee shall not, directly or indirectly,
     engage or participate in any business that is in competition with the
     business of Employer. This prohibition shall not include ownership by
     Employee of less than one percent (1%) of the outstanding stock in a
     publicly traded corporation.

9.   Duty to Devote Full Time and Avoid Conflict of Interest
     -------------------------------------------------------

                                                                          Page 2
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     During his or her employment, Employee shall devote full-time efforts to
     his or her duties as an Employee of the Employer. Employee will not,
     directly or indirectly, engage or participate in any activities during the
     period of employment in conflict with the best interests of Employer.

10.  Inventions Belong to Employer
     -----------------------------

     Employee shall promptly disclose and assign to Employer all of Employee's
     right, title and interest in and to any and all ideas, inventions,
     discoveries or creations which are or may become legally protectable or
     recognized improvements, including but not limited to computer programs,
     algorithms, methods, manufacturing techniques, writings and other works of
     authorship, illustrations and pictures which Employee solely or jointly has
     or may in the future have conceived, made or reduced to practice or
     developed, in whole or part, during work time, unless the idea, invention,
     creation or discovery (1) does not use Employer's equipment, supplies,
     facilities or trade secret information; (2) was developed entirely on
     Employee's own time without the use of Employer's equipment, supplies or
     facilities; (3) does not relate to the business of Employer or to
     Employer's actual or demonstrably anticipated research or development; and
     (4) does not result from work Employee performs for Employer. Employee will
     assign to Employer inventions or creations created or discovered by
     Employee, or jointly by Employee and a co-employee or co-employees, on
     Employee's or their time if the same relate to the business of Employer or
     to its actual or demonstrably anticipated research or development or which
     results from any work performed by Employee for Employer. The foregoing
     Agreement is binding upon Employee's heirs, representatives and assignees.

     Pursuant to the above, Employee will execute and deliver to Employer or its
     attorneys without additional compensation, but without expense to Employee,
     any and all instruments including United States and foreign patent
     applications, instruments to secure priority rights under the International
     Convention for the Protection of Industrial Property, applications for
     securing or registering any property rights assigned herein, and will
     perform any and all lawful acts which in the judgment of Employer or its
     attorneys may be necessary or desirable to secure or maintain for the
     benefit of Employer, patents or other proprietary rights in the Unites
     States and all foreign counties with respect to the property rights to be
     assigned herein.

     It is understood that the election of whether or not to file a patent
     application on any disclosure submitted by Employee and the manner of
     preparation and prosecution of any and all United States or foreign patent
     applications shall be wholly within the discretion of Employer, and at its
     expense. If Employee petitions in writing to Employer for a release of any
     rights hereunder granted, Employer will promptly consider and act on such
     petition, but is not obligated to release any of its rights.

11.  Trade Secrets and Proprietary Information of Employer
     -----------------------------------------------------

     Employee will have access to, will acquire and become acquainted with
     various trade secrets, confidential and proprietary information, relating
     to Employer's business, including but not limited to:  client, employee,
     supplier, and distributor lists, contacts, addresses, information about
     employees and employee relations, training manuals and procedures,
     recruitment method and procedures, employment contracts, employee
     handbooks, information about clients and suppliers, price lists, costs and
     expenses, documents, budgets, proposals, financial information, inventions,
     patterns,

                                                                          Page 3
<PAGE>

     processes, computer programs, manufacturing, recruitment and distribution
     techniques, specifications, tapes and compilations of information, all of
     which are owned by Employer, other parties with which Employer does
     business ("Third Parties") or clients of Employer and which are used in the
     operation of Employer's, Third Parties' and/or a client's business.
     Employee shall hold in strictest confidence and shall not (other than as
     specifically allowed in writing by Employer) disclose or use any trade
     secret or confidential information of Employer, directly or indirectly, or
     use them in any way, either during the term of Employee's employment, or at
     any time thereafter, except as required by Employer in the course of
     Employee's employment. Employee understands that the term "trade secret" or
     "confidential information" means all information concerning Employer, Third
     Parties and/or clients of Employer, or any parent, subsidiary or affiliate
     of Employer, Third Parties, and/or a client (including, but not limited to,
     information regarding the peculiarities, preferences and manner of doing
     business) that is not generally known to the public. All items referred to
     in this paragraph and similar items relating to the business of Employer,
     Third Parties and/or a client, whether prepared by Employee or otherwise,
     shall remain the exclusive property of Employer, Third Parties and/or
     client and shall not be removed from Employer's, Third Parties' and/or
     client's premises without prior written consent of Employer. Employee also
     agrees that the remedy at law for breach of this paragraph is inadequate
     and that Employer, in addition to any other remedy, can seek appropriate
     injunctive relief from an appropriate court or arbitrator, at its election.

12.  Confidential Information of Clients
     -----------------------------------

     All ideas, concepts, information, and written material disclosed to
     Employee by Employer, or acquired from a client of Employer, and all
     financial, accounting, statistical, personnel, and business data and plans
     of clients, are and shall remain the sole and exclusive property and
     proprietary information of the Employer, or said client, and are disclosed
     in confidence by Employer or permitted to be acquired from clients in
     reliance on Employee's agreement to maintain them in confidence and not to
     use or disclose them to any other person except in furtherance of
     Employer's business.

     The prohibitions of this paragraph shall not apply to any information which
     is later publicly disclosed, or is obtained by Employee in a legal manner
     from another source not connected with or related to Employer.

13.  Return of Information
     ---------------------

     On or before termination of employment, Employee will return to Employer
     all originals and copies of all of any part of:

     a.   Lists and sources of clients and suppliers;

     b.   Lists of employees;

     c.   Proposals to clients or drafts of proposals;

     d.   Reports, job notes, specifications, and drawings pertaining to
          clients; or

                                                                          Page 4
<PAGE>

     e.   Any and all other things, equipment, and written materials obtained by
          Employee during the course of employment from Employer or from any
          client of Employer.

14.  Post-Employment Nonsolicitation of Clients
     ------------------------------------------

     It is understood that Employee will learn trade secrets, confidential and
     proprietary information as referred to in paragraphs 11 and 12 above. Use
     of such trade secrets, confidential and proprietary information will
     provide Employee with an unfair advantage over Employer, as compared to a
     normally competitive situation. Employee agrees that if he or she solicits
     business from Employer's clients and prospective clients, Employee will of
     necessity use such trade secrets, proprietary and confidential information,
     and such solicitation would be unfair. In recognition of this, Employee
     agrees that upon termination of employment, he or she will not engage in
     the conduct described below:

     a.   Employee shall not solicit any clients of Employer (i.e., clients
          where at least a project has been conducted in the last two (2)
          years), or attempt to take away any business of Employer that is
          either under way or about to begin at the termination of employment.

     b.   For a period of one (1) year following termination of employment,
          Employee shall not interfere or compete in any way with any proposal
          or other efforts of Employer, already in progress (that is, a proposal
          sent to or being then currently developed for a specific existing or
          prospective client or clients, or contemplated to be submitted to a
          specific existing or prospective client or clients by Employer within
          one (1) year) at the termination of employment.

     c.   For a period of one (1) year following termination of employment,
          Employee shall not make use of any of his or her personal
          relationships or business contacts developed during the course of
          employment with Employer and utilized for business purposes within the
          two (2) years prior to termination, for the benefit of himself,
          herself or another, in a competitive manner with respect to the
          business of Employer.

     Notwithstanding the foregoing, the Employee and Employer agree that there
     is no restriction on Employee's right, upon termination, to send general
     announcements of any new employment or to contact in the same manner all
     potential customers of his new employment without selecting or devoting
     special attention (as in a, b, or c above or otherwise) to Employer's
     clients or prospective clients.

15.  No Solicitation of Employees
     ----------------------------

     Employee will not, either during the term of Employee's employment or at
     any time thereafter, attempt to solicit or influence any of Employer's
     employees to: (a) become employees of, or render services to, any other
     employer or business; (b) engage in any activity, business or undertaking
     not sponsored by Employer; or (c) engage in any activity contrary to or
     conflicting with the interests of Employer, while the Employee is employed
     by Employer.  Employee agrees that the remedy at law for breach of this
     paragraph is inadequate and that Employer, in addition to any other remedy,
     can seek appropriate injunctive relief from an appropriate court or
     arbitrator, at its election.

                                                                          Page 5
<PAGE>

16.  Injunctive Relief
     -----------------

     The services of Employee, as well as the trade secrets and the proprietary
     and confidential information of Employer are of a special, unique, unusual
     and extraordinary nature, which give them a unique value, the loss of which
     cannot reasonably or adequately be compensated for in damages in an action
     at law. The breach by Employee of any provision of this Agreement would
     cause the Employer irreparable injury and damage, the measure of which
     could not be adequately measured at law. Employer shall be entitled, as a
     matter of right, to injunctive and other equitable relief to prevent the
     violation of any provision of this Agreement by Employee. Employee hereby
     consents to the granting of such injunctive or other equitable relief. The
     exercise by Employer of any of its rights hereunder shall not constitute a
     waiver by Employer of any other rights which it may have to damages or
     otherwise.

17.  Severability
     ------------

     If any term or provision of this Agreement is held to be invalid or
     unenforceable, the remaining portions of this Agreement will continue to be
     valid and will be performed, construed and enforced to the fullest extent
     permitted by law, and the invalid or unenforceable term will be deemed
     amended and limited in accordance with the intent of the paries, as
     determined from the face of the Agreement, to the extent necessary to
     permit the maximum enforceability or validation of the term or provision.

18.  Agreement Binding on Others
     ---------------------------

     This Agreement is binding on the heirs, executors, administrators, and
     successors-in-interest of the parties hereto.

19.  Governing Law
     -------------

     This Agreement shall be construed and enforced according to the laws of the
     State of California, excluding its choice of law rules.

20.  Agreement Read, Understood and Fair
     -----------------------------------

     Employee has carefully read and considered the provisions of this Agreement
     and agrees that all of the restrictions set forth are fair and reasonable
     and are reasonably required for the protection of the interests of
     Employer. Employee acknowledges that the goodwill and value of Employer is
     enhanced by these provisions and that said enhancement is desired by
     Employee.

For Employer

                                       /s/ Leslie J. Alvarez
_____________________________          ---------------------
                                       Employee Signature

                                       1900 Powell Street, Suite 600
_______________________________        -----------------------------
Title                                  Address


                                                                          Page 6
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                                       Emeryville, CA  94608
_______________________________        ---------------------
Date                                   City, State, Zip

                                       (510) 450-6802
                                       ---------------------
                                       Telephone

                                       ###-##-####
                                       ---------------------
                                       Social Security #

                                       5/19/99
                                       ---------------------
                                       Date

                                                                          Page 7
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                                 ATTACHMENT A
                                 ------------

                       California Labor Code Section 2870


Application of provision that employee shall assign or offer to assign rights in
invention to employer

(a)  Any provision in an employment agreement which provides that an employee
     shall assign, or offer to assign, any of his or her rights in an invention
     to his or her employer shall not apply to an invention that the employee
     developed entirely on his or her own time without using the employer's
     equipment, supplies, facilities, or trade secret information except for
     those inventions that either:

     (1)  Relate at the time of conception or reduction to practice of the
          invention to the employer's business, or actual or demonstrably
          anticipated research or development of the employer; or

     (2)  Result from any work performed by the employee for the employer.

(b)  To the extent a provision in an employment agreement purports to require an
     employee to assign an invention otherwise excluded from being required to
     be assigned under subdivision (a), the provision is against the public
     policy of this state and is unenforceable.