Exhibit 10.6
AMENDED AND
RESTATED
CHANGE IN CONTROL
AGREEMENT
This Amended and Restated Change in
Control Agreement (this “ Agreement ”),
dated as of September 3,2008, is between Captaris, Inc., a
Washington corporation (the “ Company ”),
and Doug Anderson (the “ Executive
”).
The Compensation Committee of the
Board of Directors of the Company (the “ Committee
”) has determined that it is in the best interests of the
Company and its shareholders to ensure that the Company will have
the continued dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change in Control (as
defined in Appendix A to this Agreement, which is
incorporated herein by this reference) of the Company. The
Committee believes it is imperative to diminish the inevitable
distraction of the Executive arising from the personal
uncertainties and risks created by a pending or threatened Change
in Control, to encourage the Executive’s full attention and
dedication to the Company currently and in the event of any
threatened or pending Change in Control, and to provide the
Executive with reasonable compensation and benefits arrangements
upon a Change in Control.
In order to accomplish these
objectives, the Committee has caused the Company to enter into this
Agreement.
1. EMPLOYMENT
1.1 Certain
Definitions
(a) “ Change in Control
Date ” shall mean the first date during the Term of
Agreement (as defined in Section 1.1(b)) on which a Change in
Control occurs.
(b) “ Term of
Agreement ” shall mean an initial period commencing
on the date hereof and ending 18 months after the date hereof;
provided, however, that commencing on the date that
is 12 months after the date hereof, and on each annual anniversary
of such date (such date and each annual anniversary thereof shall
be hereinafter referred to as the “ Renewal Date
”), the Term of Agreement shall be automatically extended
so as to terminate 18 months from such Renewal Date, unless prior
to the Renewal Date the Company gives notice to the Executive that
the Term of Agreement shall not be so extended.
1.2 Post-Change in Control
Period
The Company hereby agrees to
continue the Executive in its employ or in the employ of its
affiliated companies, and the Executive hereby agrees to remain in
the employ of the Company or its affiliated companies, in
accordance with the terms and provisions of this Agreement, for the
period commencing on the Change in Control Date and ending 12
months after such date (the “ Post-Change in Control
Period ”).
1.3 Duties
During the Post-Change in Control
Period, the Executive’s authority, duties and
responsibilities shall be reasonably commensurate with the most
significant of those held, exercised and assigned at any time
during the 90-day period immediately preceding the Change in
Control Date.
1.4 Location
During the Post-Change in Control
Period, the Executive’s services shall be performed at any
office located no more than 50 miles from the office where
Executive was performing services as of the Change in Control
Date.
1.5 Employment at
Will
The Executive and the Company
acknowledge that, except as may otherwise be provided under any
other written agreement between the Executive and the Company, the
employment of the Executive by the Company or its affiliated
companies is “at will” and, prior to the Change in
Control Date, may be terminated by either the Executive or the
Company or its affiliated companies for any reason and at any time.
Moreover, if prior to the Change in Control Date, the
Executive’s employment with the Company or its affiliated
companies terminates for any reason, then the Executive shall have
no further rights under this Agreement.
1.6 Board of
Directors
If the Executive is or becomes a
member of the Board of Directors of the Company (the “
Board ”), his or her continuation as such shall
be subject to the will of the Company’s shareholders and the
Board, as provided in the Company’s bylaws and articles of
incorporation. Therefore, removal of the Executive from, or
nonelection of the Executive to, the Board by the Company’s
shareholders or the Board, as provided in the Company’s
bylaws and articles of incorporation, shall in no event be deemed a
breach of this Agreement by the Company.
2. ATTENTION AND
EFFORT
During the Post-Change in Control
Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive will devote all of
his or her productive time, ability, attention and effort to the
business and affairs of the Company and the discharge of the
responsibilities assigned to him/her hereunder, and will use his or
her best efforts to perform such responsibilities faithfully and
efficiently. It shall not be a violation of this Agreement for
the
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Executive to (a) serve on corporate, civic
or charitable boards or committees, (b) deliver lectures,
fulfill speaking engagements or teach at educational institutions,
and (c) manage personal investments, so long as such
activities do not significantly interfere with the performance of
the Executive’s responsibilities in accordance with this
Agreement. It is expressly understood and agreed that to the extent
any such activities have been conducted by the Executive prior to
the Post-Change in Control Period, the continued conduct of such
activities (or the conduct of activities similar in nature and
scope thereto) during the Post-Change in Control Period shall not
thereafter be deemed to interfere with the performance of the
Executive’s responsibilities to the Company.
3. COMPENSATION
During the Post-Change in Control
Period, the Company agrees to pay or cause to be paid to the
Executive, and the Executive agrees to accept in exchange for the
services rendered hereunder by him/her, the following
compensation:
3.1 Salary
The Executive shall receive an
annual base salary (the “ Annual Base Salary
”), at least equal to the annual salary established by the
Board or the Committee for the fiscal year in which the Change in
Control Date occurs. The Annual Base Salary shall be paid in
substantially equal installments and at the same intervals as the
salaries of other officers of the Company are paid. During the
Post-Change in Control Period, the Board or the Committee shall
review the Annual Base Salary at least annually and shall determine
any increases in future years.
3.2 Commission
The Executive shall receive a
monthly commission in cash (the “ Monthly
Commission ”) at least equal to 1/12th of the
Executive’s commission target for the fiscal year in which
the Change in Control Date occurs. The Monthly Commission shall be
paid on the last day of each calendar month during the Post-Change
in Control Period
3.3 Bonus
In addition to
Annual Base Salary and the Monthly Commission, the Executive shall
receive, for each fiscal year beginning or ending during the
Post-Change in Control Period, an annual bonus in cash at least
equal to the Executive’s target bonus amount for the fiscal
year in which the Change in Control Date occurs; provided, however,
that for the fiscal year in which the Change in Control Date
occurs, the Executive shall be awarded a bonus in cash at least
equal to the annualized bonus amount that Executive is on pace for
as of the Change in Control Date (the “ Annual
Bonus ”). Each such Annual Bonus shall be paid during
the 2 1 / 2 -month period
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immediately
following the end of the fiscal year for which the Annual Bonus is
awarded, unless the Executive shall elect to defer the receipt of
such Annual Bonus in accordance with the terms of an applicable
deferred compensation plan or arrangement. Notwithstanding the
foregoing, in the event the fiscal year end is different prior to
the Post-Change in Control Period than it is after the Post-Change
in Control Period, then the Annual Bonus paid to the Executive for
the fiscal year in which the Change in Control Date occurs shall be
paid during the 2 1 / 2 -month period immediately
following the new fiscal year end and shall be proportionately
adjusted to reflect additional days or less days in the new fiscal
year as a result of the difference in fiscal years.
4. BENEFITS
4.1 Incentive, Retirement and
Welfare Benefit Plans; Vacation
During the Post-Change in Control
Period, the Executive shall be entitled to participate, subject to
and in accordance with applicable eligibility requirements, in such
fringe benefit programs as shall be provided to other executives of
the Company and its affiliated companies from time to time during
the Post-Change in Control Period by action of the Board (or any
person or committee appointed by the Board to determine fringe
benefit programs and other emoluments), including, without
limitation, paid vacations; any incentive, savings and retirement
plan, practice, policy or program; and all welfare benefit plans,
practices, policies and programs (including, without limitation,
medical, prescription, dental, disability, salary continuance,
employee life, group life, accidental death and travel accident
insurance plans and programs).
4.2 Expenses
During the Post-Change in Control
Period, the Executive shall be entitled to receive prompt
reimbursement for all reasonable employment expenses incurred by
him/her in accordance with the policies, practices and procedures
of the Company and its affiliated companies in effect for the
executives of the Company and its affiliated companies during the
Post-Change in Control Period.
5. TERMINATION
Employment of the Executive during
the Post-Change in Control Period may be terminated as
follows:
5.1 By the Company or the
Executive
(a) Upon giving Notice of
Termination (as defined below), the Company may terminate the
employment of the Executive with or without Cause, and the
Executive may terminate his or her employment for Good Reason or
for any reason, at any time during the Post-Change in Control
Period. “ Cause ” and “ Good
Reason ” are as defined in Appendix A
to this Agreement.
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(b) Notwithstanding any provision in
this Agreement (or Appendix A to this Agreement) to
the contrary, termination of employment by the Executive will not
be for Good Reason unless (i) the Executive notifies the
Company in writing of the existence of the condition which the
Executive believes constitutes Good Reason within 90 days of the
initial existence of such condition (which notice specifically
identifies such condition), (ii) the Company fails to remedy
such condition within 30 days after the date on which it receives
such notice (the “ Remedial Period ”),
and (iii) the Executive actually terminates employment within
180 days after the expiration of the Remedial Period. If the
Executive terminates employment before the expiration of the
Remedial Period, then the Executive’s termination of
employment will not be considered to be for Good Reason. The fact
that the Company remedies the condition after the expiration of the
Remedial Period, but prior to Executive’s Date of
Termination, shall not prevent Executive’s termination of
employment from being for Good Reason for purposes of
Section 6.1. The foregoing sentence shall not be construed as
a determination that termination under such circumstances
constitutes a “separation from service for good
reason,” within the meaning of Treasury Regulation
Section 1.409A-1 (n)(2).
5.2 Automatic
Termination
This Agreement and the
Executive’s employment during the Post-Change in Control
Period shall terminate automatically upon the death or Total
Disability of the Executive. The term “ Total
Disability ” as used herein shall mean the
Executive’s inability (with or without such accommodation as
may be required by law and which places no undue burden on the
Company), as determined by a physician selected by the Company and
acceptable to the Executive, to perform the duties set forth
hereunder for a period or periods aggregating 120 calendar days in
any 12-month period as a result of physical or mental illness, loss
of legal capacity or any other cause beyond the Executive’s
control, unless the Executive is granted a leave of absence by the
Board.
5.3 Notice of
Termination
Any termination by the Company or by
the Executive during the Post-Change in Control Period shall be
communicated by Notice of Termination to the other party given in
accordance with Section 10 hereof. The term “
Notice of Termination ” shall mean a written
notice which (a) indicates the specific termination provision
in this Agreement relied upon and (b) to the extent
applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated.
Subject to Section 5.1(b), the failure by the Executive or the
Company to set forth in the Notice of Termination
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any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of the
Executive or the Company hereunder or preclude the Executive or the
Company from asserting such fact or circumstance in enforcing the
Executive’s or the Company’s rights
hereunder.
5.4 Date of
Termination
During the Post-Change in Control
Period, the term “ Date of Termination ”
shall mean (a) if the Executive’s employment is
terminated by reason of death, at the end of the calendar month in
which the Executive’s death occurs, (b) if the
Executive’s employment is terminated by reason of Total
Disability, immediately upon a determination by the Company of the
Executive’s Total Disability, and (c) in all other
cases, ten days after the date of mailing or personal delivery of
the Notice of Termination. The Executive’s employment and
performance of services will continue during such ten-day period;
provided, however, that the Company may, upon notice
to the Executive and without reducing the Executive’s
compensation during such period, excuse the Executive from any or
all of his or her duties during such period.
6. TERMINATION
PAYMENTS
In the event of termination of the
Executive’s employment during the Post-Change in Control
Period, all compensation and benefits set forth in this Agreement
shall terminate except as specifically provided in this
Section 6.
6.1 Termination by the Company
for Other Than Cause or by the Executive for Good
Reason
If the Company terminates the
Executive’s employment other than for Cause or the Executive
terminates his or her employment for Good Reason prior to the end
of the Post-Change in Control Period, the Executive shall be
entitled to:
(a) receive payment of the following
accrued obligations (the “ Accrued Obligations
”):
(i) the Executive’s Annual
Base Salary through the Date of Termination to the extent not
theretofore paid, payable no later than the regularly scheduled pay
day coincident with or next following the Date of
Termination;
(ii) product of (x) the Monthly
Bonus payable with respect to the calendar month in which the Date
of Termination occurs and (y) a fraction, the numerator of
which is the number of days in the calendar month in which the Date
of Termination occurs, and the denominator of which is
30
(iii) the product of (x) the
Annual Bonus payable with respect to the fiscal year in which the
Date of Termination occurs and (y) a fraction, the numerator
of which is the number of days in the current fiscal year through
the Date of Termination, and the denominator of which is 365,
payable no more than 10 days after the Date of Termination;
and
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(iv) any compensation previously
deferred by the Executive (together with accrued interest or
earnings thereon, if any), payable pursuant to the terms of the
deferred compensation plan, program or arrangement pursuant to
which it was deferred;
(v) any accrued vacation pay,
payable no more than 10 days after the Date of
Termination;
in each case to the extent not
theretofore paid;
(b) payment of any COBRA premiums
that would otherwise be payable by the Executive for COBRA
continuation coverage for the Executive and his family under the
Company’s group health plans for whichever of the following
periods is shortest: (i) a period of 12 months,
(ii) until such time as Executive obtains new health insurance
coverage, or (iii) until such date as the Executive is no
longer entitled to COBRA continuation coverage under the
Company’s group health plans. Any such premiums paid by the
Company shall be treated as taxable income to the Executive to the
extent necessary to prevent the benefits provided under the
Company’s group health plans from being treated as taxable
income to the Executive under Code Section 105(h);
(c) base salary continuation,
payable in the course of the Company’s regularly scheduled
payroll and subject to normal withholdings, for a period of time
equal to 12 months, commencing on the first regularly scheduled pay
day following the Date of Termination. For purposes of Code
Section 409A, each installment payable pursuant to this
paragraph (c) shall be treated as a separate
payment;
(d) commission
payment continuation for a period of time equal to 12 months,
payable in monthly installments at the end of each month, in an
amount equal to 1/12 th per month of
Executive’s commission target for the fiscal year in which
the Date of Termination occurs;
(e) an amount equal to one times the
target Annual Bonus payable for the fiscal year in which the Date
of Termination occurs, payable no more than 10 days after the Date
of Termination;
(f) immediate vesting of all equity
awards granted by the Company to the Executive outstanding as of
the Change in Control Date; and
(g) an extension of the
post-termination exercise period of all stock options granted by
the Company to th
