October 26, 2005
 

 
Mr. Patrick Condo
1013 Kimberly Court
Great Falls, VA 22066-1546

Dear Pat:
 
This is to confirm you employment arrangement as President and Chief Executive
Officer with Convera Corporation.
 
 

1.  
Compensation.

 
a.  Base Salary. As payment for the services to be rendered by you and subject
to the provisions hereinafter stated, the Company shall pay you a base salary at
an annualized rate of $480,000 per year, payable on the Company’s normal payroll
schedule (the “Base Salary”).
 
b.  Bonus. In addition to your Base Salary, you will be eligible for an annual
bonus (the “Bonus”) of up to $200,000 per year, calculated and paid on a
quarterly basis (up to $50,000 per quarter) based upon performance targets
established by the Company’s Board of Directors (or independent directors or
Compensation Committee as required by the rules and regulations of Nasdaq).
 
 

2.  
Employee Benefits.

 
a.  Benefits. As a full-time employee you shall be eligible to participate in
such of the Company’s benefit plans as are now generally available or later made
generally available to full time employees of the Company, including 401(k)
plan, medical, dental, vision, life and long-term disability insurance plans.
 
b.  Expense Reimbursement. The Company agrees to reimburse you for all
reasonable, ordinary and necessary travel and entertainment expenses incurred by
you in conjunction with your services to the Company consistent with the
Company’s standard reimbursement policies. The Company shall pay travel costs
incurred by you in conjunction with your services to the Company consistent with
the Company’s standard travel policy.
 
 

3.  
At-Will Employment.

 
Your employment with the Company will be on an “at will” basis, meaning that
either you or the Company may terminate your employment at any time for any
reason or no reason, without further obligation or liability. The Company also
reserves the right to modify or amend the terms of your employment at any time
for any reason. This policy of at-will employment is the entire agreement as to
the duration of your employment and may only be modified in an express written
agreement duly authorized by the Company’s Board of Directors.
 
 

4.  
Severance Benefits.

 
General Terms. In no way limiting the Company’s policy of employment at-will, if
your employment is terminated (i) by the Company without Cause (as defined
below), or (ii) terminated by you for Good Reason (as defined below), in either
case, whether or not following or in connection with a Change in Control and
other than as a result of your death or disability, the Company will provide you
with the following:
 
a.  Severance. Equal to 18 months of your then-current regular Base Salary and
Bonus paid out over the Company’s regular payroll schedule following the
effective date of your release. Your health and dental insurance coverage for
your then-current Convera plans will be paid by Convera through the COBRA
vehicle for 18 months unless you receive comparable coverage under another
company’s plan before the end of that period at which point Convera’s payments
would cease.
 
b.  Stock Options. Your stock options will continue to vest through the duration
of the severance period.
 
As a condition to your receipt of such benefits, you are required to comply with
your continuing obligations (including the return of any Company property),
resign from all positions you hold with the Company, and execute the Company’s
standard form of release agreement, which provides for, among other matters, the
release of any claims you may have against the Company and your agreement not to
complete or solicit employees or customers for a period of 18 months from
termination of employment.
 
Cause. For the purposes of this letter, “Cause” shall mean: (i) your repeated
failure to perform one or more of your essential duties and responsibilities to
the Company after 10 day written notice to you and a chance to cure; (ii) your
failure to follow the lawful directives of the Company’s Board of Directors;
(iii) your material violation of any Company policy, including any provision of
a Code of Conduct or Code of Ethics adopted by the Company; (iv) your commission
of any act of fraud, embezzlement, dishonesty or any other willful misconduct
that in the reasonable judgment of the Board of Directors has caused or is
reasonably expected to result in material injury to the Company; (v) your
unauthorized use or disclosure of any proprietary information or trade secrets
of the Company or any other party to whom you owe an obligation of nondisclosure
as a result of your relationship with the Company; (vi) your conviction of a
felony or misdemeanor (other than a traffic offense) or; (vii) your willful
breach of any of your obligations under any written agreement with the Company.
 
Good Reason. For purposes of this letter, “Good Reason” shall mean (i) the
Company’s failure to make any required payment to you hereunder that remains
unremedied for 10 days after you have provided written notice of such failure to
the Board of Directors of the Company, (ii) the substantial diminution of your
position or duties or responsibilities; provided, however, that removal of
position or title or a reduction of duties or responsibilities shall not be Good
Reason if you continue to serve on the Company’s Board of Directors, (iii) a
reduction in your Base Salary or target Bonus of more than 10%, unless such
reduction is applied to all senior executives, (iv) if within 18 months of a
Change of Control, your duties or responsibilities are substantially reduced,
(v) the Company’s willful breach of any of its obligations under any written
agreement with you that remains unremedied for 10 days after you have provided
notice of such breach to the Board of Directors of the Company, or (vi) the
relocation of the Company's executive offices to a site more than 75 miles from
its present location.
 
For purposes of this letter, a “Change in Control” means the happening of either
of the following:
 
A. The consummation of the sale or disposition by the Company of all or
substantially all of the Company’s assets; or
 
B. The Company combines or is consolidated with, or merges with or into, any
other corporation, and following such transaction a person or persons other than
a person, who alone or with others, as of the date of this Agreement
beneficially owns more than ten percent (10%) of the Company’s outstanding
voting securities, become the beneficial owner or owners of at least fifty
percent (50%) of the total voting power represented by the outstanding voting
securities of the Company or the surviving entity or its parent immediately
after such combination, consolidation or merger, and a majority of the Board of
Directors immediately after such transaction consists of individuals other than
individuals who served as directors immediately prior to such transaction.
 
Limitation. Notwithstanding the foregoing, if your employment is terminated
without Cause or for Good Reason and, in either case, you still continue to
serve on the Company’s Board of Directors, you shall not be entitled to the
severance benefits contained in this Section 4.
 
This letter, together with the Company’s Employee Proprietary Information and
Inventions Agreement, stock option agreements related to your various stock
option grants and Amended and Restated Deferred Stock Agreement, all of which
will remain in full force and effect, set forth the terms of your employment
with the Company and supersede any prior representations or agreements, whether
written or oral. This letter will be governed by the laws of Virginia, without
regard to its conflict of laws provisions, and may only be amended or modified
by a writing signed by both parties and approved by the Board of Directors.
 
We look forward to our continuing relationship and bright future for Convera.
 
Very truly yours,

CONVERA CORPORATION

By: 
Name: Ronald J. Whittier
Title: Chairman of the Board

ACCEPTED AND AGREED:
 
PATRICK C. CONDO
 

 
 
Signature
 
 
Date