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 i
