Change in Control Agreement between Captaris and David Anastasi



 Exhibit 10.5 
  
 CHANGE IN CONTROL AGREEMENT 
  

This Change in Control Agreement (this “Agreement”), dated as of March 15, 2005, is between Captaris, Inc., a Washington
corporation (the “Company”), and David Anastasi (the “Executive”). 
  
 The Board of Directors of the Company (the “Board”) 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 Board 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 Board 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 shall give 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 18 months after such date (the “Post-Change in Control Period”). 







 1.3 Position and Duties 
  

During the Post-Change in Control Period, the Executive’s position, 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, 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 Compensation Committee of the Board (the “Compensation 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 Compensation Committee shall review the Annual Base Salary at least annually and shall determine any increases in future years. 
  
 3.2 Bonus 
  
 In addition to Annual Base Salary, the Executive shall be awarded, for each fiscal year 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 no later than 90 days after 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. 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 no later than 90 days after 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. 
  

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 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 

 
 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. 
  
 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 

  

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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. The failure by the Executive or the Company to set forth in the
Notice of Termination 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. 
  

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 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; 
  
 (ii) 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; and 
  
 (iii) any compensation previously deferred
by the Executive (together with accrued interest or earnings thereon, if any) and any accrued vacation pay, in each case to the extent not theretofore paid; 
  
 (b) reimbursement of Executive’s COBRA expenses for Executive and his family for a period of 18 months, or until such time as Executive obtains new
health insurance coverage, whichever occurs first.; 
  
 (c)
(i) 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 18 months and (ii) an amount, paid as a lump sum, equal to one and one-half times
the target Annual Bonus payable for the fiscal year in which the Date of Termination occurs; 
  
 (d) immediate vesting of all stock options granted by the Company to the Executive outstanding as of the Change in Control Date; and 
  
 (e) an extension of the post-termination exercise period of all stock options
granted by the Company to the Executive outstanding as of the Change in Control Date, so that such options shall be exercisable for a period of one year from the Date of Termination. 
  
 6.2 Termination for Cause or Other Than for Good Reason 
  
 If the Executive’s employment shall be terminated by the Company for
Cause or by the Executive for other than Good Reason during the Post-Change in Control Period, this Agreement shall terminate without further obligation to the Executive 

  

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other than the obligation to pay to the Executive his or her Annual Base Salary through the Date of Termination plus the amount of any compensation
previously deferred by the Executive, in each case to the extent theretofore unpaid. 
  
 6.3 Expiration of Term 
  
 In the case of a
termination of the Executive’s employment as a result of the expiration of the term of this Agreement, the Executive shall not be entitled to receive any payments hereunder, other than the Accrued Obligations. 
  
 6.4 Termination Because of Death or Total Disability 
  
 If the Executive’s employment is terminated by reason of the
Executive’s death or Total Disability during the Post-Change in Control Period, this Agreement shall terminate automatically without further obligations to the Executive or his or her legal representatives under this Agreement, other than for
payment of Accrued Obligations (which shall be paid to the Executive’s estate or beneficiary, as applicable in the case of the Executive’s death). 
  
 6.5 Excess Parachute Payments 
  
 Notwithstanding any other provision of this Agreement, if either the Company or the Executive receives confirmation from the Company’s independent
tax counsel or its certified public accounting firm (the “Tax Advisor”) that any portion of any payment by the Company or a related entity to the Executive, or any benefit received by the Executive, under this Agreement or
otherwise (each a “Payment”) would be considered to be an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended, (the “Code”) or any
successor statute then in effect, then the Payments (under this Agreement or otherwise) shall be reduced (the “Reduction”) to the highest amount that, in the opinion of the Tax Advisor, may be paid to the Executive by the
Company without having any portion of any Payment treated as an “excess parachute payment;” provided that the Company may elect, in its sole and absolute discretion, not to apply the Reduction if, in the opinion of the Tax Advisor, the
after-tax value to the Executive of the total Payments prior to the Reduction is greater than the after-tax value to the Executive if the total Payments are determined taking into account the Reduction. For purposes of determining the after-tax
value of the Payments, (i) the Executive shall be deemed to pay income taxes at the highest rate of federal income tax and the highest rate or rates of state and local income taxes in the state and locality of the Executive’s domicile for
income tax purposes for the taxable year in which the total Payments will be made, provided that the state and local income tax rate shall be determined assuming that such taxes are fully deductible for federal income tax purposes, and (ii) the
Executive shall be deemed to pay employment taxes at the applicable rate under Section 3101(b) of the Code. The Reduction shall be applied to the Payments in any manner determined by the Company in its reasonable discretion. 
  

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 6.6 Payment Schedule 
  
 Unless otherwise provided herein, all payments under this Section 6 shall be made to the Executive at the same intervals as such payments were made to
him/her immediately prior to termination. 
  
 6.7 Application of Other Payments

  
 In the event the Executive has received any payments
under any other agreement or any Company plan, policy or program where the payment is made as a result of or in connection with the termination or severance of the Executive, then any amounts to which the Executive is entitled hereunder will be
reduced by the amount of any such payments. 
  
 7.
REPRESENTATIONS, WARRANTIES AND OTHER 
 CONDITIONS 
  
 In order to induce the Company to enter into this Agreement, the Executive represents and warrants to the Company as
follows: 
  
 7.1 Health 
  
 The Executive is in good health and knows of no physical or mental
disability which, with or without any accommodation which may be required by law and which places no undue burden on the Company, would prevent him/her from fulfilling his or her obligations hereunder. The Executive agrees, if the Company requests,
to submit to periodic medical examinations by a physician or physicians designated by, paid for and arranged by the Company. The Executive agrees that the examination’s medical report shall be provided to the Company. 
  
 7.2 No Violation of Other Agreements 
  
 The Executive represents that neither the execution nor the performance of
this Agreement by the Executive will violate or conflict in any way with any other agreement by which the Executive may be bound. 
  
 8. CIIN AGREEMENT 
  
 The Executive will not, at any time during the term of employment by the Company, or at any time thereafter, directly, indirectly or otherwise, be in
breach of the Confidential Information, Inventions and Non-Competition Agreement (the “CIIN Agreement”) between the Executive and the Company. Any breach of the CIIN Agreement by the Executive shall constitute a breach of
this Agreement. 
  

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 The Executive understands that the Company will be relying on this Agreement and the CIIN Agreement in
continuing the Executive’s employment, paying him/her compensation, granting him/her any promotions or raises, or entrusting him/her with any information which helps the Company compete with others. 
  
 The terms and provisions of the CIIN Agreement that are intended to survive
termination of the CIIN Agreement shall be unaffected by and shall survive the termination of this Agreement and the termination of the Executive’s employment with the Company 
  
 9. NOTICE AND CURE OF BREACH 
  

Whenever a breach of this Agreement by either party is relied upon as justification for any action taken by the other party pursuant to any provision
of this Agreement, other than any action that constitutes “Cause” under this Agreement, before such action is taken, the party asserting the breach of this Agreement shall give the other party at least ten days’ prior written notice
of the existence and the nature of such breach before taking further action hereunder and shall give the party purportedly in breach of this Agreement the opportunity to correct such breach during the ten-day period. 
  
 10. FORM OF NOTICE 
  
 Every notice required by the terms of this Agreement shall be given in
writing by serving the same upon the party to whom it was addressed personally or by registered or certified mail, return receipt requested, at the address set forth below or at such other address as may hereafter be designated by notice given in
compliance with the terms hereof: 
  

			
	If to the Executive:	 	David Anastasi
	 	 	16759 SE 48th Place
	 	 	Bellevue, Washington 98006
		
	If to the Company:	 	Captaris, Inc.
	 	 	10885 NE 4th Street
	 	 	Bellevue, Washington 98004
	 	 	Attn: General Counsel

  

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 or such other address as shall be provided in accordance with the terms hereof. Except as set forth in Section 5.4
hereof, if notice is mailed, such notice shall be effective upon mailing. 
  
 11. ASSIGNMENT 
  
 This
Agreement is personal to the Executive and shall not be assignable by the Executive. The Company may assign its rights hereunder to (a) any corporation resulting from any merger, consolidation or other reorganization to which the Company is a party
or (b) any corporation, partnership, association or other person to which the Company may transfer all or substantially all of the assets and business of the Company existing at such time. All the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns. 
  
 The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all the
business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this
Agreement, “Company” shall mean Captaris, Inc. and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise. 
  
 12. WAIVERS 
  
 No delay or failure by any party hereto in exercising, protecting or
enforcing any of its rights, tides, interests or remedies hereunder, and no course of dealing or performance with respect hereto, shall constitute a waiver thereof. The express waiver by a party hereto of any right, title, interest or remedy in a
particular instance or circumstance shall not constitute a waiver thereof in any other instance or circumstance. All rights and remedies shall be cumulative and not exclusive of any other rights or remedies. 
  
 13. AMENDMENTS IN WRITING 
  
 No amendment, modification, waiver, termination or discharge of any provision
of this Agreement, nor consent to any departure therefrom by either party hereto, shall in any event be effective unless the same shall be in writing, specifically identifying this Agreement and the provision intended to be amended, modified,
waived, terminated or discharged and signed by the Company and the Executive, and each such amendment, modification, waiver, termination or discharge shall be effective only in the specific instance and for the specific purpose for which given. No
provision of this Agreement shall be varied, contradicted or explained by any oral agreement, course of dealing or performance or any other matter not set forth in an agreement in writing and signed by the Company and the Executive. 
  

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 14. SECTION 409A OF THE CODE 
  
 Notwithstanding any other provision of this Agreement, the Company and the Executive intend that any payments, benefits or
other provisions applicable to this Agreement comply with the payout and other limitations and restrictions imposed under Section 409A of the Code (“Section 409A”), as clarified or modified by guidance from the U.S Department
of Treasury or the Internal Revenue Service – in each case if and to the extent Section 409A is otherwise applicable to this Agreement and such compliance is necessary to avoid the penalties otherwise imposed under Section 409A. In this
connection, the Company and the Executive agree that the payments, benefits and other provisions applicable to this Agreement, and the terms of any deferral and other rights regarding this Agreement, shall be deemed modified if and to the extent
necessary to comply with the payout and other limitations and restrictions imposed under Section 409A, as clarified or supplemented by guidance from the U.S. Department of Treasury or the Internal Revenue Service – in each case if and to the
extent Section 409A is otherwise applicable to this Agreement and such compliance is necessary to avoid the penalties otherwise imposed under Section 409A. 
  
 15. APPLICABLE LAW AND VENUE 
  
 This Agreement shall in all respects, including all matters of construction, validity and performance, be governed by, and construed and enforced in
accordance with, the laws of the State of Washington, without regard to any rules governing conflicts of laws. Executive irrevocably consents to the jurisdiction and venue of the state and federal courts located in King County, Washington, and
agrees not to bring any action, or seek to remove or transfer any action, relating to this Agreement in or to any other court, other than a state or federal court located in King County, Washington. 
  
 16. ARBITRATION 
  
 Except in connection with enforcing Section 8 hereof, for which legal and
equitable remedies may be sought in a court of law, any dispute arising under this Agreement shall be subject to arbitration. The arbitration proceeding shall be conducted in accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the “AAA Rules”) then in effect, conducted by one arbitrator either mutually agreed upon or selected in accordance with the AAA Rules. The arbitration shall be conducted in King County, Washington,
under the jurisdiction of the Seattle office of the American Arbitration Association. The arbitrator shall have authority only to interpret and apply the provisions of this Agreement, and shall have 

  

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no authority to add to, subtract from or otherwise modify the terms of this Agreement. Any demand for arbitration must be made within sixty (60) days of the
event(s) giving rise to the claim that this Agreement has been breached. The arbitrator’s decision shall be final and binding, and each party agrees to be bound to by the arbitrator’s award, subject only to an appeal therefrom in
accordance with the laws of the State of Washington. Either party may obtain judgment upon the arbitrator’s award in the Superior Court of King, County, Washington. 
  
 17. SEVERABILITY 
  
 If any provision of this Agreement shall be held invalid, illegal or unenforceable in any jurisdiction, for any reason, including, without limitation, the
duration of such provision, its geographical scope or the extent of the activities prohibited or required by it, then, to the full extent permitted by law, (a) all other provisions hereof shall remain in full force and effect in such jurisdiction
and shall be liberally construed in order to carry out the intent of the parties hereto as nearly as may be possible, (b) such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of any other
provision hereof, and (c) any court or arbitrator having jurisdiction thereover shall have the power to reform such provision to the extent necessary for such provision to be enforceable under applicable law. 
  
 18. ENTIRE AGREEMENT 
  
 This Agreement on and as of the date hereof constitutes the entire agreement
between the Company and the Executive with respect to Executive’s duties and benefits upon and after a Change in Control and any other subject matters addressed herein. All prior or contemporaneous oral or written communications, understandings
or agreements between the Company and the Executive with respect to such subject matters, are hereby superseded and nullified in their entireties. Any and all future oral or written communications, understandings or agreements between the Company
and the Executive with respect to such subject matter shall not alter, amend, expand or otherwise change the duties and benefits provided herein, unless in compliance with the requirements of Paragraph 13 herein.  
  
 19. WITHHOLDING 
  
 The Company may withhold from any amounts payable under this Agreement such
federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation. 
  
 20. COUNTERPARTS 
  
 This Agreement may be executed in counterparts, each of which counterpart shall be deemed an original, but all of which together shall constitute one and the same Instrument. 
  

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 IN WITNESS WHEREOF, the parties have executed and entered into this Agreement on the date set forth
above. 
  

	
	 EXECUTIVE

	
	 /s/ David Anastasi


	David Anastasi


  

			
	 CAPTARIS, INC.

		
	By:	 	 /s/ Robert L. Lovely


	Name:	 	Robert L. Lovely
	Title:	 	Chairman, Compensation Committee


  

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 APPENDIX A 
  
 TO 
  
 CHANGE IN CONTROL AGREEMENT BETWEEN 
  
 CAPTARIS, INC. AND DAVID ANASTASI 
  
 For purposes of the Change in Control Agreement between Captaris, Inc. and David Anastasi, the following capitalized terms shall have the following
meanings: 
  
 “Cause” shall mean cause
given by the Executive to the Company and shall include the occurrence of one or more of the following events: 
  
 (a) Executive’s willful material misconduct or dishonesty in the performance of, or the willful failure to perform, any material duty under this
Agreement; 
  
 (b) Executive’s willful injury of the Company,
or Executive’s breach of fiduciary duty to the Company involving personal profit; 
  
 (c) Conviction of Executive of the violation of a state or federal criminal law involving the commission of a crime against the Company or any felony; 
  
 (c) Habitual or repeated misuse by Executive of alcohol or controlled substances that materially impairs Executive’s
ability to perform his duties under this Agreement; 
  
 (d) Any
material and willful violation by Executive of any provisions of the CIIN Agreement; or 
  
 (e) Any past or present act of Executive involving moral turpitude adversely affecting the business, goodwill or reputation of the Company, or materially and adversely affecting Executive’s ability to effectively
represent the Company with the public. 
  
 “Change in
Control” shall mean: 
  
 (a) consummation of an
acquisition by any Entity of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 40% or more of either (1) the then outstanding shares of common stock of the Company (the “Outstanding Company
Common Stock”) or (2) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”),
excluding, 

  

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however, the following: (i) any acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege where
the security being so converted was not acquired directly from the Company by the party exercising the conversion privilege, (ii) any acquisition by the Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any Related Company, or (iv) a Related Party Transaction; 
  
 (b) a change in the composition of the Board during any two-year period such that the individuals who, as of the beginning of such two-year period, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board; provided, however, that for purposes of this definition, any individual who becomes a member of the Board subsequent to the beginning of the two-year period, whose election, or
nomination for election by the Company’s shareholders, was approved by a vote of at least two-thirds of those individuals who are members of the Board and who were also members of the Incumbent Board (or deemed to be such pursuant to this
proviso) shall be considered as though such individual were a member of the Incumbent Board; and provided further, however, that any such individual whose initial assumption of office occurs as a result of or in connection with an actual or
threatened solicitation of proxies or consents by or on behalf of an Entity other than the Board shall not be considered a member of the Incumbent Board; 
  
 (c) consummation of a merger or consolidation of the Company with or into any other company or other entity, excluding, in each case, a Related Party
Transaction; 
  
 (d) consummation of a statutory share exchange
pursuant to which the Company’s outstanding shares are acquired or a sale in one transaction or a series of transactions undertaken with a common purpose of at least 50% of the Company’s outstanding voting securities, excluding, in each
case, a Related Party Transaction; or 
  
 (e) consummation of a
sale, lease, exchange or other transfer in one transaction or a series of related transactions undertaken with a common purpose of all or substantially all of the Company’s assets, excluding, in each case, a Related Party Transaction.

  
 Where a series of transactions undertaken with a common
purpose is deemed to be a Change in Control, the date of such Change in Control shall be the date on which the last of such transactions is consummated. 
  
 “Entity” shall mean any individual, entity or group (within the meaning of Section 13(d)(3) of the Exchange Act). 
  
 “Exchange Act” shall mean the Securities Exchange Act
of 1934, as amended. 
  

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 “Good Reason” shall mean the occurrence of any of the following events, without
the consent of the Executive: 
  
 (a) A demotion or other
material reduction in the nature or status of the Executive’s responsibilities as contemplated by Section 1.3, excluding for this purpose an isolated and inadvertent action not taken in bad faith and which is remedied by the Company promptly
after receipt of notice thereof given by the Executive; provided that a change in the person or office to which the Executive reports, without a corresponding reduction in duties, status and responsibilities, resulting primarily from organizational
changes incident to a merger or acquisition, shall not constitute “Good Reason”; 
  
 (b) Any failure by the Company to comply with any of the provisions of Section 3 hereof, other than an isolated and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive; 
  
 (c) The
Company’s requiring the Executive to be based at any office or location other than that described in Section 1.4 hereof; or 
  
 (d) Any failure by the Company to comply with and satisfy Section 11 hereof, provided that the Company’s successor has received at least ten
days’ prior written notice from the Company or the Executive of the requirements of Section 11 hereof. 
  
 “Parent Company” shall mean a company or other entity which as a result of a Change in Control owns the Company or all or
substantially all of the Company’s assets either directly or through one or more subsidiaries. 
  
 “Related Company” shall mean any entity that is directly or indirectly controlled by, in control of or under common control with
the Company. 
  
 “Related Party
Transaction” shall mean a Change in Control pursuant to which: 
  
 (a) the Entities who are the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Change in Control will beneficially own, directly or
indirectly, at least 50% of the outstanding shares of common stock, and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the Successor Company in substantially the same
proportions as their ownership, immediately prior to such Change in Control, of the Outstanding Company Common Stock and Outstanding Company Voting Securities; 
  

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 (b) no Entity (other than the Company, any employee benefit plan (or related trust) of the Company or a
Related Company, the Successor Company or, if reference was made to equity ownership of any Parent Company for purposes of determining whether clause (a) above is satisfied in connection with the applicable Change in Control, such Parent Company)
will beneficially own, directly or indirectly, 40% or more of, respectively, the outstanding shares of common stock of the Successor Company or the combined voting power of the outstanding voting securities of the Successor Company entitled to vote
generally in the election of directors unless such ownership resulted solely from ownership of securities of the Company prior to the Change in Control; and 
  
 (c) individuals who were members of the Incumbent Board will immediately after the consummation of the Change in Control constitute at least a majority of
the members of the board of directors of the Successor Company (or, if reference was made to equity ownership of any Parent Company for purposes of determining whether clause (a) above is satisfied in connection with the applicable Change in
Control, of the Parent Company). 
  
 “Successor
Company” shall mean the surviving company, the successor company or Parent Company, as applicable, in connection with a Change in Control. 
  

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