Exhibit 10.1
CAPTARIS, INC.
DEFERRED COMPENSATION
PLAN
FOR NON-EMPLOYEE
DIRECTORS
(As Amended and Restated
Effective September 22, 2008)
ARTICLE I. PURPOSE AND NATURE OF
PLAN
The purpose of the Plan is to
further long-term growth of the Company by allowing Non-Employee
Directors to defer receipt of certain compensation, keeping their
financial interests aligned with the Company, and providing them
with a long-term incentive to continue providing services to the
Company. The Plan was originally effective June 8, 2006. The
amendment and restatement set forth herein is effective as of
September 22, 2008 and applies to all amounts deferred under the
Plan that remain unpaid on or after that date, regardless of when
deferred.
ARTICLE II.
DEFINITIONS
Whenever capitalized herein, the
following terms shall have the respective meanings set forth below,
unless the context clearly indicates otherwise.
2.1 “ Account ” means a
separate unfunded account established for a Participant on the
books of the Company for purposes of recording such
Participant’s interest under the Plan. The Company may
establish such subaccounts within a Participant’s Account as
it deems necessary for the proper administration of the
Plan.
2.2 “ Affiliate ” means
(a) any corporation that is a member of a controlled group of
corporations (as defined in Section 414(b) of the Code) that
includes the Company, and (b) any trade or business that is
under common control (as defined in Section 414(c) of the
Code) with the Company. In determining whether a corporation, trade
or business is an Affiliate, including for purposes of determining
whether a Participant has separated from service, within the
meaning of Code Section 409A(a)(2)(A)(i), the 80% ownership
tests set forth in Code Section 1563(a)(1), (2) and
(3) and Treasury Regulations Section 1.414(c)-2 shall
remain at 80%, notwithstanding anything to the contrary in Treasury
Regulation Section 1.409A-1(h)(3).
2.3 “ Award ” means an
award granted under the Equity Incentive Plan.
2.4 “ Beneficiary ” means
the person, trust or other entity designated by the Participant to
receive payment under the Plan in the event of the
Participant’s death. A Participant must designate his or her
Beneficiary on such form (filed with the Company) as the Plan
Administrator will prescribe. A Participant may change his or her
Beneficiary designation at any time by filing a new Beneficiary
designation with the Company. The most recent Beneficiary
designation on file with the Company at the time of the
Participant’s death will be controlling. If a married
Participant designates someone other than his or her spouse as a
primary Beneficiary, then the designation will have no effect as to
the Participant’s
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interest under the Plan, unless the spouse has
consented in writing to the designation of such Beneficiary and
such consent is witnessed by a notary public or a Plan
representative. The consent of one spouse will have no effect with
respect to any subsequent spouse. If the Participant does not have
a valid Beneficiary designation on file with the Company at the
time of his or her death, or if all of the Participant’s
designated Beneficiaries predecease the Participant, then the
Participant’s Beneficiary will be the Participant’s
surviving spouse or, if the Participant has no surviving spouse,
the Participant’s estate. For purposes of the Plan,
“spouse” means the person who is recognized as the
Participant’s lawful spouse under applicable state
law.
2.5 “ Board ” means the
Board of Directors of the Company.
2.6 “ Business Day ” means
any day that the Nasdaq is open for trading.
2.7 “ Cash Compensation ”
means the cash compensation payable to a Non-Employee Director for
his or her service as a member of the Board, including, without
limitation, any base retainer and any additional cash amounts
payable for service as a chair or member of any Board
committee.
2.8 “ Change in Control ”
means any of the following events which also constitutes a change
in ownership or effective control of the Company, or in the
ownership of a substantial portion of the Company’s assets,
within the meaning of Code
Section 409A(a)(2)(A)(v):
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(a)
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the acquisition
by any person or more than one person acting as a group, within the
meaning of Code Section 409A, of Ownership of the stock of the
Company that, together with any stock of the Company already held
by such person, or group of persons, constitutes more than 50% of
the total fair market value or the total voting power of the stock
of the Company; provided, however, that if any person or more than
one person acting as a group, within the meaning of Code
Section 409A, is considered to own more than 50% of the total
fair market value or the total voting power of the stock of the
Company, the acquisition of additional stock by the same person or
persons will not be construed to cause a Change in Control under
this paragraph (a) (or to cause a Change in Control under
paragraph (b) immediately below);
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(b)
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the acquisition
by any person or more than one person acting as a group, within the
meaning of Code Section 409A (or the acquisition by any person
or more than one person acting as a group, within the meaning of
Code Section 409A, during the 12-month period ending on the
date of the most recent acquisition by such person or persons), of
Ownership of Company stock that, without regard to any stock of the
Company already held by such person or group of persons,
constitutes 30% or more of the total voting power of the stock of
the Company; provided, however, that if any person or more than one
person acting as a group, within the meaning of Code
Section 409A, is considered to own 30% or more of the total
voting power of the stock of the Company, the acquisition of
additional stock by the same person or persons will not be
construed to cause a Change in Control under this paragraph
(b);
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(c)
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the
replacement, during any 12-month period, of a majority of the
members of the Board by directors whose appointment or election is
not endorsed by a majority of the members of the Board before the
date of such appointment or election; provided, however, that this
paragraph (c) applies only for so long as the Company does not
have a majority shareholder that is a corporation (i.e., a
corporation that owns more than 50% of the total fair market value
and total voting power of the stock of the Company); or
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(d)
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the acquisition
from the Company by any person or more than one person acting as a
group (within the meaning of Code Section 409A) who is/are not
related to the Company for purposes of Code Section 409A, or
the acquisition from the Company by any such person or persons
during the 12-month period ending on the date of the most recent
such acquisition by such person or persons, of assets of the
Company that have a total gross fair market value equal to at least
40% of the total gross fair market value of all of the assets of
the Company immediately prior to such acquisition or acquisitions.
For this purpose, gross fair market value means the value of the
Company’s assets, or the value of the assets being disposed
of, determined without regard to any liabilities associated with
such assets.
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2.9 “ Code ” means the
Internal Revenue Code of 1986, as amended and in effect from time
to time.
2.10 “ Company ” means
Captaris, Inc. and any successor thereto.
2.11 “ Company Stock ”
means the Company’s common stock.
2.12 “ Compensation Committee
” means the Compensation Committee of the Board.
2.13 “ Deferral Agreement ”
means the election form(s) promulgated by the Plan Administrator
and executed by the Participant authorizing the deferral of Cash
Compensation and consenting to the terms and conditions of the
Plan, the same as if the Participant were a signatory
hereto.
2.14 “ Em ployee ” means a
person who is employed by the Company or an Affiliate as a common
law employee.
2.15 “ Equity Incentive Plan
” means the Captaris, Inc. 2006 Equity Incentive Plan, as may
be amended from time to time, or any successor plan
thereto.
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2.16 “ New Director ” means
a Non-Employee Director who was not eligible to participate in the
Plan (or any other non-qualified deferred compensation plan
sponsored by the Company or an Affiliate, which may be aggregated
with the Plan, or any portion of the Plan, under Code
Section 409A) prior to becoming a Non-Employee
Director.
2.17 “ Non-Employee Director
” means a member of the Board who is not also an
Employee.
2.18 “ Ownership ” means
actual and constructive ownership, as determined in accordance with
Code Section 318(a). Stock underlying a vested option is
considered owned by the individual who holds the vested option (and
the stock underlying an unvested option is not considered owned by
the individual who holds the unvested option); provided, however,
that if a vested option is exercisable for stock that is not
substantially vested (as defined in Treas. Reg.
§ 1.83-3(b) and (j)), the stock underlying such option is
not treated as owned by the individual who holds the
option.
2.19 “ Participant ” means
a Non-Employee Director who has elected to defer payment of all or
any portion of his or her Cash Compensation pursuant to
Section 4.1 or to whose Account an Award has been credited
pursuant to Section 4.2. A person remains a Participant so
long as he has an Account balance under the Plan, whether or not he
remains an Non-Employee Director.
2.20 “ Plan ” means the
Captaris, Inc. Deferred Compensation Plan for Non-Employee
Directors, as set forth herein, together with all amendments
hereto.
2.21 “ Plan Administrator ”
means the Compensation Committee or its delegate.
2.22 “ Specified Employee ”
means a Participant who, as of the date of the Participant’s
Retirement or other Termination, is a key employee of the Company
or any Affiliate, but only if the stock of the Company or any
Affiliate is publicly traded on an established securities market or
otherwise on the date of such Participant’s Retirement or
other Termination. A Participant is a key employee if the
Participant meets the requirements of Code
Section 416(i)(1)(A)(i), (ii) or (iii) (applied in
accordance with the regulations thereunder and disregarding Code
Section 416(i)(5)) at any time during the 12-month period
ending on a “specified employee identification date.”
If a Participant is a key employee as of a specified employee
identification date, he or she is treated as a Specified Employee
for the 12-month period beginning on the related “specified
employee effective date.” Unless the Company and the
Affiliates have designated different dates as the specified
employee designation date and/or the specified employee effective
date in accordance with the provisions of Treasury Regulation
Sections 1.409A-1(i)(3) and (4), the specified employee
designation date shall be December 31 of each year and the
specified employee effective date shall be the following
April 1.
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2.23 “ Termination ” and
its derivations, such as “Terminate,” mean
“separation from service” with the Company and its
Affiliates within the meaning of Code
Section 409A(a)(2)(A)(i).
2.24 “ Unforeseeable Emergency
” means a severe financial hardship to the Participant
resulting from an illness or accident of the Participant, the
Participant’s spouse, the Participant’s Beneficiary or
the Participant’s dependent (as defined in Code
Section 152(a)), without regard to Sections 152(b)(1),
(b)(2) and (d)(1)(B)); loss of the Participant’s property due
to casualty (including the need to rebuild a home following damage
to a home not otherwise covered by insurance, for example, not as a
result of a natural disaster); or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond
the control of the Participant. For example: (a) the imminent
foreclosure of or eviction from the Participant’s primary
residence may constitute an Unforeseeable Emergency; (b) the
need to pay for medical expenses, including nonrefundable
deductibles, as well as for the costs of prescription drug
medication may constitute an Unforeseeable Emergency; (c) the
need to pay for the funeral expenses of a spouse, a Beneficiary, or
a dependent (as defined in Code Section 152, without regard to
Sections 152(b)(1), (b)(2) and (d)(1)(B)) may constitute an
Unforeseeable Emergency; and (d) the purchase of a home and
the payment of college tuition do not constitute Unforeseeable
Emergencies.
ARTICLE III. ELIGIBILITY AND
PARTICIPATION
3.1 Eligibility.
All Non-Employee Directors are
eligible to participate in the Plan.
3.2 Participation.
A Non-Employee Director will become
a Participant by completing a Deferral Agreement and filing it with
the Company in accordance with Section 4.1; provided, however,
that a Non-Employee Director who has not completed a Deferral
Agreement will become a Participant upon the crediting of an Award
to his or her Account pursuant to Section 4.2.
ARTICLE IV. DEFERRALS OF CASH
COMPENSATION AND AWARDS
4.1 Voluntary Deferral of Cash
Compensation.
(a) Prior to the beginning of each
calendar year, a Non-Employee Director may elect to defer receipt
of 25%, 50%, 75% or 100% of any Cash Compensation he or she
anticipates earning for services performed during such calendar
year. To make such an election, a Non-Employee Director must file a
completed Deferral Agreement with the Company in accordance with,
and subject to, such rules and procedures as the Plan Administrator
may establish; provided, however that such Deferral Agreement must
be filed with the Company prior to the first day of the calendar
year for which it is to be effective and shall become irrevocable
with respect to such calendar year on the last day of the calendar
year immediately preceding such calendar year (or such earlier date
as the Plan Administrator may prescribe).
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(b) Notwithstanding
subsection (a) immediately above, a New Director may make an
initial deferral election by filing an irrevocable Deferral
Agreement with the Company no later than 30 days after becoming a
New Director. Any such Deferral Agreement will apply only to Cash
Compensation earned (and paid) after the Deferral Agreement is
filed with the Company.
(c) A Participant’s Deferral
Agreement will remain in effect from calendar year to calendar year
until terminated or modified by the Participant or until the end of
the calendar year in which the Participant ceases to be a
Non-Employee Director. A Participant may terminate or modify his or
her Deferral Agreement, effective as of the first day of any
calendar year, by filing a new Deferral Agreement with the Company
in accordance with the provisions of
Section 4.1(a).
(d) The Company will credit any Cash
Compensation deferred by a Participant pursuant to subsections
(a) and (b) immediately above to the Participant’s
Account as of the date on which it would have been paid to the
Participant had it not been deferred.
4.2 Deferred Awards.
The Company may credit such Awards
to a Participant’s Account as it deems appropriate, in its
sole and absolute discretion.
ARTICLE V.
ACCOUNTS
5.1 Establishment and Nature of
Participant Accounts. The
Company will establish and maintain an Account in the name of each
Participant to reflect the Participant’s interest under the
Plan. The Company may establish such subaccounts within a
Participant’s Account as it deems necessary for the proper
administration of the Plan (e.g., to reflect deferrals of Cash
Compensation, as opposed to Awards, or to reflect deferred Awards
granted at different times or subject to different vesting
schedules). The maintenance of such Accounts and subaccounts is for
record keeping purposes only and will not represent any investment
made on any Participant’s behalf by the Plan Administrator or
the Company.
5.2 Deemed Investment.
All amounts credited to a
Participant’s Account will be deemed to be invested in shares
of Company Stock (calculated to one one-thousandth of a share). Any
dividends which would have been received had such amounts actually
been invested in shares of Company Stock will also be credited to
the Participant’s Account as of the date they would have been
paid and will be deemed invested in additional shares of Company
Stock (calculated to one one-thousandth of a share). Except for
deferred Awards (which are deemed to be invested in shares of
Company Stock immediately upon being credit
