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EXHIBIT 10.19
[SYNON LETTERHEAD]
May 15, 1997
This letter encompasses the original letter dated
4/17/97 and the Addendum dated 5/2/97.
Mr. Kevin Kilroy
37 Springbrook Lane
New Arch, DE 97711
Dear Kevin:
I am pleased to confirm my verbal offer for you to join Synon Corporation as
Vice President, North America Sales & Marketing. This letter sets forth the
terms of your employment offer with Synon as follows:
1. You will serve in the position of Vice President, North America
Sales & Marketing, reporting to the Chief Executive Officer and
assume and discharge such responsibilities as are commensurate with
this position. You shall comply with and be bound by Synon's
operating policies, procedures, and practices. It is anticipated
that the effective date of your employment will be on or about June
3, 1997.
2. During the term of your employment with Synon you shall devote your
full time, skill and attention to your duties and responsibilities,
and shall perform them faithfully, diligently and competently, and
you shall use your best efforts to further the business of Synon.
Your employment with Synon is for an unspecified duration that
constitutes at-will employment and either Synon or you can terminate
this relationship at any time.
3. In consideration of your services, you will be paid a salary of
$16,667 per month (annualized rate of $200,000), payable
semi-monthly in accordance with Synon's standard payroll in
practices. As with other officers of Synon, this base compensation
will be reviewed annually by the Board of Directors.
4. In addition to your base compensation, the Board of Directors shall
adopt an executive bonus program under which you shall be entitled
to earn incentive compensation based upon the satisfaction of
certain performance goals. It is contemplated that these performance
objectives will be determined by the Chief Executive Officer in
consultation with you, and will concern such matters as North
America revenue and profitability and Corporate objectives. The
bonus will be targeted at $75,000 annually plus additional
overachievement milestones and will be paid according to the Payout
Schedule, Attachment A-2. Further incentive compensation may, at the
sole discretion
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of the Board of Directors, be provided for overachievement of
corporate objectives.
5. Your 1997 Bonus Target will be prorated for a partial year. Assuming
a June 3 start date, the '97 target is $44K. Per our agreement, you
will be guaranteed a minimum payout of 80%.
6. You will be given a non-recoverable draw of $3,000 per month for the
first five months of employment.
7. You will be entitled to receive Synon's fringe benefits made
available to other employees and officers to the full extent of your
eligibility therefor. You shall be entitled to three weeks of paid
vacation per year (which shall not accrue in excess of three weeks
per year). During your employment, you shall be permitted, to the
extent eligible, to participate in any group life, hospitalization
or disability insurance plan, health program, or similar benefit
plan of Synon that may be available to other comparable employees
generally on the same terms as such other employees. Participation
in any such plan shall be consistent with your rate of compensation
to the extent that compensation is a determinative factor with
respect to coverage under any such plan. Business expenses, incurred
by you will be reimbursed according to Synon's expense reimbursement
policy.
8. As long as you were covered under your prior plan and have not had
more than a 90 day break in coverage, you will be covered without
waiver of pre-existing conditions.
9. Upon your acceptance of employment you will be granted a
non-statutory option to purchase 200,000 shares of Synon Common
Stock under Synon's 1990 Stock Option Plan subject to approval of
the Board of Directors. The option price shall be at the per share
fair market value as of the date of your acceptance. The option
shall have a term of ten years. The Option Agreement will provide
that your right to exercise the option will vest cumulatively over a
period of four years, vesting at 25% on the first anniversary of the
effective date of your employment and thereafter on a monthly basis
(2.0833% per month).
In addition, (i) upon any Change of Control of Synon Corporation (as
defined herein), then 25,000 shares of your unvested option shares
shall vest and become exercisable and any of the then remaining
unvested options will vest monthly in equal increments over the
balance of the original vesting period and (ii) if your employment
is involuntarily terminated or Constructively Terminated (as defined
herein) within twelve (12) months after a Change of Control (it
being the intention that you will agree to remain employed for at
least one year following a "Change of Control"), then your options
shall be accelerated to become immediately exercisable for 50% of
the total number of unvested shares subject thereto.
10. In addition, if your employment is involuntarily terminated other
than for "cause" (as defined herein) with Synon (i) prior to a
Change of Control (as defined herein), you shall receive twelve
months base salary as severance, or, (ii) is involuntarily
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terminated or Constructively Terminated (as defined herein), other than
for cause, within one year following a Change of Control then you shall
receive 1 year's base salary as severance.
11. For purposes of the foregoing, termination "for cause" shall mean (i)
the willful failure by you substantially to perform your material
duties after a written demand for substantial performance is delivered
to you by the Chief Executive which specifically identifies the manner
in which he believes that you have not substantially performed your
duties; (ii) the failure (in a material respect) by you to follow a
written, lawful order or directive from the Chief Executive; (iii) the
conviction of you of any crime involving the property or business of
Synon or its affiliates; or (iv) any act of moral turpitude in
connection with the performance of your duties hereunder.
12. For purposes of the foregoing, a "Change of Control of Synon" shall be
deemed to have occurred if (i) Synon sells or otherwise disposes of all
or substantially all of its assets; (ii) there is a merger or
consolidation of Synon with any other corporation or corporations,
provided that the shareholders of Synon, as a group, do not hold,
immediately after such event, at least 50% of the voting power of the
surviving or successor corporation; (iii) any person or entity,
including any "person" as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
becomes the "beneficial owner" (as defined in Rule 13d-3 of the Exchange
Act) of Common Stock of Synon representing 50% or more of the total
voting power of the outstanding voting securities of Synon (exclusive of
persons who are now officers or directors of Synon).
13. For purposes of the foregoing, your employment with Synon shall be
deemed to have been "Constructively Terminated" if there shall occur (i)
a material reduction in salary or benefits (taken as a whole); or (ii) a
material change in your responsibilities as Vice President of North
American Sales & Marketing, or (iii) a requirement to relocate, except
for office relocations that would not increase your one-way commute by
more than 50 miles.
14. Synon agrees to reimburse you for up to $63,000 in documented relocation
expenses such as house hunting trips to the Bay Area, the cost of moving
your household goods and personal property, temporary accommodations and
the reimbursement of income taxes assessed on your taxable relocation
expenses. You agree to reimburse Synon for reimbursed relocation
expenses should you voluntarily leave Synon within eighteen months of
your hire date. Synon will waive its rights to 1/18th of these
relocation expenses for every month of continued employment.
15. The position of Vice President, North America Sales & Marketing, is
located at company HQ, in Larkspur, California. Relocation of your
family to California should happen as soon as possible. Understanding
the need to sell your house, I will be flexible in the transaction and
would expect this to be completed within twelve months.
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16. Since you will be spending considerable time in the field, your
interim personal living expenses in California will be covered
under T & E.
17. Upon acceptance of this offer, you will be required to sign
Synon's standard employee proprietary information agreement.
I am delighted to have you as a part of the Synon Executive Team. Your
leadership will help us achieve new records. Please acknowledge acceptance of
this offer by signing and returning the enclosed copy of this letter. Synon and
you shall undertake to promptly prepare and execute all of the documents and
agreements as are reasonably necessary to carry out the intentions expressed
herein.
Very truly yours,
/s/ RICHARD H. GOLDBERG
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Richard H. Goldberg
President and CEO
Attachments
Accepted by:
/s/ KEVIN KILROY
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Kevin Kilroy
Dated: May 23, 1997
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Attachment A-2
PAYOUT SCHEDULE
REVENUE PROFIT
Quota Attained Bonus Earned Quota Attained Bonus Earned
- -------------- ------------ -------------- ------------
0-69 0 65 0
70 20 70 10
80 40 80 50
90 70 90 80
100 100 100 100
110 125 110 115
120 150 120 145
130 180