Employment Agreement (Gastrock 10/25/2005)


     

    


     

    


     

    


     

    


     

    REVISED October
      25, 2005

    


    Mr.
      Kurt
      Gastrock

    9705
      Meadowmere Drive

    Vienna,
      Virginia 22182

    


    Dear
      Kurt:

    


    I
      am
      pleased to offer you the position of Executive Vice President and Chief
      Operating Officer of Convera Corporation (the “Company”). In this position you
      will report directly to Patrick Condo, President and Chief Executive Officer.
      This letter outlines the terms of the offer of employment. Your expected date
      of
      employment is on or about November 7, 2005. 

     

    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 $300,000 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 a bonus (the “Bonus”) up
      to $175,000 ($43,750 per quarter, at 100% performance against plan) paid
      quarterly, 25% per quarter based upon the Company’s actual operating
      performance, and based for Fiscal Year 2007 on successful quarterly execution
      of
      the Company’s Fiscal Year 2007 Operating Plan approved by the Company’s Board of
      Directors. Notwithstanding the performance nature of the Company's Bonus Plan,
      the Company guarantees payment of the quarterly bonus for the fourth fiscal
      quarter Fiscal Year 2006. 

     

    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, long-term disability insurance plans. Please refer to the Convera
      Summary of Benefits attached. You shall be entitled to four weeks vacation
      per
      year.

     

    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. Equity
      Awards.

     

    a.  Stock
      Options.
      Upon the
      start of your employment, you will be granted options under the Company’s2000
      Incentive Stock Option Plan (the “Plan”) to purchase 500,000 shares of the
      Company’s Class A Common Stock. These stock option grants are made at the market
      price at the time of grant, as determined under the Plan, and vest 12.5% every
      six months. The Option will be an incentive stock option to the maximum extent
      allowed by the tax code and will be subject to the terms of the Plan and the
      Stock Option Agreement between you and the Company, which will contain the
      standard terms and provisions applicable to employees generally. 

     

    b.  Deferred
      Shares. Convera
      shall issue you, in accordance with and at such time as provided in Sections
      3.b(i) and 3.b(ii) of the Agreement, 200,000 shares of Convera Class A Common
      Stock (the “Deferred Stock”). Such award will be granted pursuant to, and is
      subject to the terms of the Plan. You will have a nonforfeitable and vested
      interest in the Deferred Stock on the earliest of the following (the “Deferred
      Date”):

     

    
      	(i)  	
              a
                date five years from your first date of employment provided that
                you
                remain continuously employed with the Company through such date;
                or
                

            


    

     

    
      	(ii)  	
              the
                occurrence of a Change in Control while you are employed by the Company
                followed (a) by continuous employment by you at the Company or the
                successor to the Company for a period of 12 months or (b) within
                12 months
                by a termination of employment without Cause (as defined below) or
                a
                substantial diminution of your duties and/or responsibilities compared
                to
                your duties and responsibilities immediately prior to the Change
                of
                Control. 

            


    

     

    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.

     

    4. Pre-Employment
      Conditions.

     

    a. Proprietary
      Information Agreement.
      Your
      acceptance of this offer and commencement of employment with the Company is
      contingent upon the execution, and delivery to an officer of the Company, of
      the
      Company’s Employee Proprietary Information and Inventions Agreement, a copy of
      which is enclosed for your review and execution (the “Confidentiality
      Agreement”), prior to or on your Start Date. 

     

      b. Right
      to Work.
      For
      purposes of federal immigration law, you will be required to provide to the
      Company documentary evidence of your identity and eligibility for employment
      in
      the United States. Such documentation must be provided to us within three (3)
      business days of your Start Date, or our employment relationship with you may
      be
      terminated. 

     

    c. Verification
      of Information.
      This
      offer of employment is also contingent upon the successful verification of
      the
      information you provided to the Company during your application process, as
      well
      as a general background check performed by the Company to confirm your
      suitability for employment. By accepting this offer of employment, you warrant
      that all information provided by you is true and correct to the best of your
      knowledge, and you expressly release the Company from any claim or cause of
      action arising out of the Company’s verification of such
      information.

     

    
      	5.  	
              No
                Conflicting Obligations. 

            


    

     

    You
      understand and agree that by accepting this offer of employment, you represent
      to the Company that your performance will not breach any other agreement to
      which you are a party and that you have not, and will not during the term of
      your employment with the Company, enter into any oral or written agreement
      in
      conflict with any of the provisions of this letter or the Company’s policies.
      You are not to bring with you to the Company, or use or disclose to any person
      associated with the Company, any confidential or proprietary information
      belonging to any former employer or other person or entity with respect to
      which
      you owe an obligation of confidentiality under any agreement or otherwise.
      The
      Company does not need and will not use such information and we will assist
      you
      in any way possible to preserve and protect the confidentiality of proprietary
      information belonging to third parties. Also, we expect you to abide by any
      obligations to refrain from soliciting any person employed by or otherwise
      associated with any former employer and suggest that you refrain from having
      any
      contact with such persons until such time as any non-solicitation obligation
      expires.

     

    
      	6.  	
              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.

     

    7. 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 one year 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 one year 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.  	
              Vesting
                in Deferred Stock-
                nonforfeitable and vested interest in the Deferred Stock equal to
                20% of
                the total granted in Paragraph 3b above in the event that your employment
                is terminated without Cause prior to the one year anniversary of
                the
                commencement of employment, and 5% for any full quarter of continuous
                employment with Convera after the first full year of
                employment.

            


    

     

    
      	c.  	
              Stock
                Options- stock
                options will continue to vest per the regular vesting schedule in
                paragraph 3a above 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 solicit
      employees and customers.

     

    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 Chief Executive
      Officer or the Board of Directors of the Company, (ii) the substantial
      diminution of your duties or responsibilities, (iii) a reduction in your Base
      Salary or target Bonus of more than 10% unless applied to all senior executives,
      (iv) 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 Chief Executive Officer or the Board of Directors
      of the Company or (v) the relocation of the Company's executive offices to
      a
      site more than 50 miles from its present location, except for a relocation
      to,
      or within 50 miles of, its Carlsbad, California facilities (which the Company
      has no present intention of effecting). In the event of relocation, the Company
      will provide to you six months prior notice of any intended relocation and
      agrees to reimburse you for reasonable relocation expenses consistent with
      Convera’s prior relocation reimbursement practices for executives.

     

    To
      indicate your acceptance of the Company’s offer, please sign and date this
      letter in the space provided below and return it to me, along with a signed
      and
      dated original copy of the Employee Proprietary Information and Inventions
      Agreement. Please indicate the date on which you expect to begin work in the
      space provided below (the “Start Date”). This letter, together with the
      Confidentiality Agreement, 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
        are
        all delighted to be able to extend you this offer and look forward to working
        with you. 

       

      Very
        truly yours,

      


      CONVERA
        CORPORATION

      


      By:/s/Patrick
        C. Condo

      


      Title:
        President and Chief Executive Officer

      


      


      


      ACCEPTED
        AND AGREED:

      


      


      KURT
        C.
        GASTROCK

      


      /s/Kurt
        C. Gastrock 

      Signature

      


       

      Date:
        11/1/2005

       

      Anticipated
        Start Date: 11/9/2005

       

    

    Attachment
      A: Employee Proprietary Information and Inventions Agreement

    Attachment
      B: 
      Convera
      Summary of Benefits