Document:

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                         [NEURON DATA INC. LETTERHEAD]

                                                                    EXHIBIT 10.7

                                    July 15, 1998

Mr. Thomas F. Kelly
57 Stevenson Lane
Atherton, CA 94027

Dear Tom:

     Neuron Data, Inc. (the "Company") is very pleased to extend this offer of
employment to you to serve as the Company's President and Chief Executive
Officer. We believe that you will be a tremendous addition to the Neuron Data
team and we are all very excited about the prospect of your joining us. The
terms and conditions of your employment, should you decide to accept our offer,
are as follows:

     1.  Position. You will serve in a full-time capacity as President and Chief
         --------
Executive Officer. You will also be elected to the Board of Directors of the
Company.

     2.  Compensation. Your annual rate of base salary will be $250,000, payable
         ------------
in accordance with the Company's standard payroll practices for salaried
employees. This salary will be subject to adjustment at the discretion of the
Board in each subsequent year as part of the Board's review of your
compensation. You will have the opportunity to earn an incentive bonus of up to
30,000 shares of options on the company's common stock (fully vested upon grant)
for the fiscal year 1999 based upon personal and corporate goals set by the
Company's Board of Directors. For furore fiscal years, you will have the
opportunity to earn an incentive bonus based on the Company's bonus plan as
established by the Company's Board of Directors. For each of fiscal quarters
ending September 1998, December 1998 and March 1999, so long as you are in the
employ of the company, will be paid a guaranteed payment of $15,000.

     3.  Equity Compensation. Following the commencement of your employment, you
         -------------------
will be granted under the Company's employee stock option plan an "incentive
stock option" to purchase up to 600,000 shares of the Company's common stock at
an exercise price per share equal to the fair market value of the Company's
common stock on the date the option is granted. This option will vest as to 25%
of the shares subject to the option on the first anniversary of the grant and
the remaining shares will vest monthly thereafter through the fourth anniversary
of the grant In the event of a change of control of the company, vesting will
accelerate to the extent of 50% of the unvested portion of the option on the
closing date of the change of control, subject to a minimum aggregate vesting of
two-thirds of the option.
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          You will also be granted an additional option to purchase up to
100,000 shares of the Company's common stock at an exercise price per share
equal to the fair market value of the Company's common stock on the date the
option is granted. All of the shares subject to the option will vest on the
seventh anniversary of the grant; however, such vesting will accelerate in full
in the event of either (i) a public valuation of the Company's common stock
equal to or greater than $6 per share for a period of 30 consecutive trading
days or (ii) an acquisition of substantially all of the assets or securities of
the Company for cash or public securities at a fully diluted value per share of
common stock equivalents equal to or greater than $6 without regard to any
liquidation preference.

          You will also be granted an additional option to purchase up to
100,000 shares of the Company's common stock at an exercise price per share
equal to the fair market value of the Company's common stock on the date the
option is granted. All of the shares subject to the option will vest on the
seventh anniversary of the grant; however, such vesting will accelerate in full
in the event of either (i) a public valuation of the Company's common stock
equal to or greater than $12 per share for a period of 30 consecutive trading
days or (ii) an acquisition of substantially all of the assets or securities of
the Company for cash or public securities at a fully diluted value per share of
common stock equivalents equal to or greater than $12 without regard to any
liquidation preference.

     4.  Fringe Benefits. The Company will also provide you with the benefits of
         ---------------
each group life insurance, group medical plan and any other employee benefit
plan which the Company may now or hereafter maintain for its officers and for
which you individually qualify.

     5.  Vacation. You will accrue 20 days of vacation for each twelve-month
         --------
period of continued employment with the Company. You agree, however, to use all
accrued vacation during the twelve-month period in which it is earned.

     6.  Proprietary Information and Inventions Agreement. You will be required,
         ------------------------------------------------
as a condition to your employment with the Company, to enter into the Company's
standard Proprietary Information and Inventions Agreement.

     7.  Period of Employment. Your employment with the Company will be "at
         --------------------
will", meaning that either you or the Company will be entitled to terminate your
employment with the Company, with or without cause, at any time.

     8.  Severance. Should your employment with the Company be terminated
         ---------
involuntarily for other than cause including involuntary termination for other
than cause subsequent to a change of control, the Company will pay you severance
in nine monthly installments, the total amount equal to (i) nine months salary
payable at the rate of the annual base salary in effect for you at the time of
such termination plus (ii) the amount of the bonus pro-rated for such nine month
period at the target rate in effect on the effective date of such termination,
subject to agreements of non-compete and hiring restrictions. In addition, the
Company will provide benefits continuation if needed for the nine month period.
Such payments will be made monthly for a period of nine months or until you take
a position with another company, whichever is sooner.
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     We hope that you find the foregoing terms acceptable, and we look forward
to your response to this letter by July 15, 1998. You may indicate your
acceptance of employment by signing and dating the enclosed duplicate original
of this letter and returning it to me by the above date. We believe that in your
role as the Company's President and CEO, you will make a significant
contribution to the Company's future success, and we look forward to the start
of your new career with the Company.

                                    Very truly yours,

                                    NEURON DATA, INC.

                                    /s/ William J. Harding

                                    By:  William J. Harding

                                    Title:  Chairman

AGREED TO AND ACCEPTED BY:

 /s/ Thomas F. Kelly
-------------------------

Date:  July 15, 1998
      -------------------<PAGE>

                         [NEURON DATA INC. LETTERHEAD]

                                                                    EXHIBIT 10.8

                                         June 9, 1998

Mr. Gary Shroyer
19981 Lanark Lane
Saratoga, CA 95070

Dear Gary:

Neuron Data, Inc. (the "Company") is very pleased to extend this offer of
employment to you to serve as the Company's Senior Vice President and Chief
Financial Officer, with a start date of July 20, 1998. We believe that you will
be a tremendous addition to the Neuron Data team and we are all very excited
about the prospect of you joining us. The terms and conditions of your
employment, should you decide to accept our offer, are as follows:

 .  Compensation: Your monthly rate of base salary will be $14,166.66 (annualized
   ------------
   at $170,000), payable in accordance with the Company's standard payroll
   practice for salaried employees.

 .  Bonus: You will be eligible to receive an annual incentive bonus. For FY'99
   -----
   (ending March 31, 1999) this will be up to 20,000 fully vested shares in
   accordance with the Company's Management Bonus Program.

 .  Stock Options: Following the commencement of your employment, we will
   -------------
   recommend to the Board of Directors that you receive an "incentive stock
   option" of 150,000 shares of the Company's common stock at an exercise price
   per share equal to the fair market value of the Company's common stock on the
   date the option is granted, and in accordance with the Company's Stock Option
   Plan and Stock Option Agreement. In the event of a change of control of the
   company, vesting will accelerate to the extent of 50% of the unvested portion
   of the option on the closing date of the change of control, subject to a
   minimum aggregate vesting of two-thirds of the option.

   You will also be granted an additional option to purchase up to 50,000 shares
   of the Company's common stock at an exercise price per share equal to the
   fair market value of the Company's common stock on the date the option is
   granted. All of the shares subject to this option will vest on the seventh
   anniversary of the grant; however, such vesting will accelerate in full in
   the event of either (i) a public valuation of the Company's common stock
   equal to or greater than $6 per share for a period of 30 consecutive trading
   days or (ii) an acquisition of substantially all of the assets or securities
   of the Company for cash or public securities at a fully diluted value per
   share of common stock equivalents equal to or greater than $6 without regard
   to any liquidation preference.

                                       1
<PAGE>

Mr. Gary Shroyer
June 9, 1998
Page Two

 .  Benefits: During your employment, Neuron Data will provide you and your
   --------
   eligible dependents with health benefits in accordance with the Company's
   health plan (summary attached). You will be entitled to time off in the
   amount of ten vacation days, increasing after three years per the Company
   policy, three personal days, and designated national holidays.

 .  Severance. Should your employment with the Company be terminated
   ---------
   involuntarily for other than cause, the Company will pay you severance in six
   monthly installments, the total amount equal to six months salary. Additional
   terms of this severance agreement will be identical to CEO's and provided to
   you under separate cover.

 .  Proprietary Information and Inventions Agreement: You will be required, as a
   ------------------------------------------------
   condition to your employment with the Company, to enter into the Company's
   standard Employee Proprietary Information Agreement. Please have this
   completed by your first day of employment.

 .  Period of Employment: All employment with the Company is "at will", meaning
   --------------------
   that either you or the Company will be entitled to terminate your employment
   with the Company, with or without cause, at any time. You understand and
   agree that only the Company President can enter into an agreement on any
   other terms and he or she can only do so in writing signed by him or her and
   you.

 .  Arbitration: Except with respect to matters for which injunctive relief is
   -----------
   sought pending arbitration under California law, all questions, disputes,
   and/or controversies that may arise out of or in connection with this
   agreement, arbitration shall be conducted in Mountain View, California, in
   accordance with the roles of the American Arbitration Association. Each party
   hereto shall select one arbitrator and the two arbitrators shall jointly
   select a third arbitrator. Each party agrees that the arbitrators may not
   award punitive damages for or against either party. The decision of a
   majority of the arbitrators shall be final and binding upon both parties, who
   hereby agree to comply therewith.

 .  In addition to the matters set forth above, the Company has personnel
   policies relating to the other terms and conditions of employment at the
   Company, and that though the Company may change these policies from time to
   time at its sole discretion, the voluntary "at will" nature of your
   employment will not be changed.

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<PAGE>

Mr. Gary Shroyer
June 9, 1998
Page Three

We hope that you fund the foregoing terms acceptable, and we look forward to
your response to this offer by Friday, June 12. You may indicate your acceptance
of employment by signing and dating the enclosed duplicate original of this
letter and returning it to me by the above date. We believe that in your role as
the Company's Senior Vice President and Chief Financial Officer you will make a
significant contribution to the Company's future success, and we look forward to
welcoming you to the Neuron Data Team.

                                    Very truly yours

                                    /s/ Michael A. Braun

                                    Michael A. Braun
                                    President & CEO

AGREED TO AND ACCEPTED BY:

/s/ Gary Shroyer              7/20/98
-------------------------     ------------
Name                          Date

                                       3
<PAGE>

                            Addendum to Offer Letter

Gary Shroyer's offer letter dated June 9, 1998, references Mike Braun's
severance agreement. The following paragraph is taken from Mr. Braun's offer
letter and is being attached as this addendum to Mr. Shroyer's offer letter.

Severance:  Should your employment with the Company be terminated involuntarily
for other than cause, the Company will pay you severance in nine monthly
installments, the total mount equal to (i) nine months salary payable at the
rate of the annual base salary in effect for you at the time of such termination
plus (ii) the amount of the bonus prorated for such nine month period at the
target rate in effect on the effective date of such termination, subject to
agreements of non-complete and hiring restrictions. In addition, the Company
will provide benefits continuation if needed for the nine month period. Such
payments will be made monthly for a period of nine months of until you take a
position with another company, whichever is sooner.

                              /s/ Robyn Brand

                              4/1/99

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<PAGE>

Elements
From Neuron Data

                   Amendment to the Terms & Conditions within
               Offer of Employment by Neuron Data to Gary Shroyer

Vacation: Gary Shroyer is entitled to fifteen (15) days of vacation per year
--------
(change from ten (10) days per year).

AGREED TO AND ACCEPTED BY:

/s/ Gary Shroyer                        7-20-98
----------------                        -------
Gary Shroyer                            Date

/s/ Michael A. Braun                    7-20-98
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Michael A. Braun                        Date
President & CEO

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