**Exhibit 10.4**

**CHANGE IN CONTROL AGREEMENT**

This Change in Control Agreement (this“***Agreement***”), dated as of March 17, 2008, is between Captaris, Inc., a Washington corporation (the “***Company***”), and Paul Yantus (the “***Executive***”). 

The Compensation Committee of the Board of Directors of the Company (the “***Committee***”) has determined that it is in the bestinterests 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*** tothis 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 orthreatened 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 andbenefits arrangements upon a Change in Control. 

In order to accomplish these objectives, the Committee has caused the Company to enterinto this Agreement. 

**1.    EMPLOYMENT**

 

(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 thedate 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 ofAgreement shall not be so extended. 

 

The Company herebyagrees 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 thisAgreement, 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****Position and Duties**
During the Post-Change inControl 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 theChange 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 Companyacknowledge 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 Changein 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 itsaffiliated 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 becomesa 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 andarticles 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 noevent 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 willdevote 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 suchresponsibilities faithfully and efficiently. It shall not be a violation of this Agreement for the 

 

-2- 

Executive to (a) serve on corporate, civic or charitable boards or committees, (b) deliver lectures, fulfill speaking engagements or teach ateducational 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 understoodand 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 thePost-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 agreesto 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 basesalary (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 insubstantially 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 andshall determine any increases in future years. 

 
**3.2****Bonus**
In addition to Annual Base Salary, theExecutive 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 Dateoccurs; provided, however, that for the fiscal year in which the Change in Control Date occurs, the amount received by the Executive shall be at least equal to the annualized bonus amount that Executive is on pace for as of the Change in ControlDate, if such amount is higher than the target bonus amount for such year (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 isawarded, 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 ControlPeriod, 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 orless days in the new fiscal year as a result of the difference in fiscal years. 

 

-3- 

**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 theCompany 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, withoutlimitation, 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, salarycontinuance, 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 theexecutives 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 Noticeof 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 inControl Period. “***Cause***” and “***Good Reason***” are as defined in ***Appendix A*** to this Agreement. 

 

-4- 

**5.2****Automatic Termination**
This Agreement and theExecutive’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 theExecutive’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 dutiesset 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 isgranted a leave of absence by the Board. 

 
**5.3****Notice of Termination**
Any termination by theCompany 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***” shallmean 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 fortermination 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 Causeshall 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 inControl 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) ifthe 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 personaldelivery 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 theExecutive’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 thePost-Change in Control Period, all compensation and benefits set forth in this Agreement shall terminate except as specifically provided in this Section 6. 

 

-5- 

**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 tothe end of the Post-Change in Control Period, the Executive shall be entitled to: 

(a) receive payment of the followingaccrued obligations (the “***Accrued Obligations***”): 

(i) the Executive’s Annual Base Salarythrough the Date of Termination to the extent not theretofore paid; 

(ii) the product of (x) the Annual Bonus payablewith 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 COBRAexpenses for Executive and his family for a period of 12 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 normalwithholdings, for a period of time equal to 12 months and (ii) an amount, paid as a lump sum, equal to one times the target Annual Bonus payable for the fiscal year in which the Date of Termination occurs; 

(d) immediate vesting of all equity awards 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 Executiveoutstanding 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 theExecutive 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- 

**6.3****Expiration of Term**
In the case of a termination ofthe 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 Executiveor 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 anyother 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 ofany 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;” providedthat 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 valueto 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 federalincome 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 andlocal 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 theCode. The Reduction shall be applied to the Payments in any manner determined by the Company in its reasonable discretion. 

 

-7- 

**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 theExecutive 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 theExecutive 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 tothe Company as follows: 

 
**7.1****Health**
The Executive is in good health and knowsof 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 Executiverepresents 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 timeduring 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***”) betweenthe Executive and the Company. Any breach of the CIIN Agreement by the Executive shall constitute a breach of this Agreement. 

 

-8- 

The Executive understands that the Company will be relying on this Agreement and the CIIN Agreement incontinuing 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 shallsurvive 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 asjustification 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 thisAgreement 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 opportunityto 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 orby 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:  Mr. Paul Yantus  ________________________  ________________________If to the Company:  Captaris, Inc.  301 – 116th Avenue SE  Bellevue, Washington 98004  Attn: Chief Financial Officer
 

-9- 

or such other address as shall be provided in accordance with the terms hereof. Except as set forth in Section 5.4hereof, 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) anycorporation 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 theassets 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 permittedassigns. 

The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all orsubstantially 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. Asused 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. Theexpress 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 notexclusive 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 partyhereto, 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 anyoral 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. 

 

-10- 

**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 tothis 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 theInternal 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, theCompany 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 complywith 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 extentSection 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, includingall 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 thejurisdiction 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 orfederal 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 arisingunder 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 ArbitrationAssociation. The arbitrator shall have authority only to interpret and apply the provisions of this Agreement, and shall have 

 

-11- 

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 ofthe 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 inaccordance 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 bylaw, (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 extentnecessary 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’sduties 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 tosuch 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 suchfederal, 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 bedeemed an original, but all of which together shall constitute one and the same Instrument. 

 

-12- 

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

 
**EXECUTIVE**/s/ Paul Yantus**Name: Paul Yantus**
 
**CAPTARIS, INC.**/s/ David Anastasi**Name: David Anastasi****Title: President & CEO**
 

-13- 

**APPENDIX A**

**TO**

**CHANGE IN CONTROL AGREEMENT**

For purposes of the Change in Control Agreement, 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 followingevents: 

(a) Executive’s willful material misconduct or dishonesty in the performance of, or the willful failure to perform, anymaterial duty under this Agreement; 

(b) Executive’s willful injury of the Company, or Executive’s breach of fiduciary duty tothe Company involving personal profit; 

(c) Conviction of Executive of the violation of a state or federal criminal law involving thecommission of a crime against the Company or any felony; 

(c) Habitual or repeated misuse by Executive of alcohol or controlled substancesthat materially impairs Executive’s ability to perform his duties under this Agreement; 

(d) Any material and willful violation byExecutive of any provisions of the CIIN Agreement; or 

(e) Any past or present act of Executive involving moral turpitude adverselyaffecting 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 commonstock 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, 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 securitybeing 

 

-14- 

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 Boardsubsequent 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 alsomembers 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 ofoffice 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 PartyTransaction; 

(d) consummation of a statutory share exchange pursuant to which the Company’s outstanding shares are acquired or a salein 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 ofall or substantially all of the Company’s assets, excluding, in each case, a Related Party Transaction. 

Where a series oftransactions 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. 

 

-15- 

“***Good Reason***” shall mean the occurrence of any of the following events, withoutthe consent of the Executive: 

(a) A demotion or other material reduction in the nature or status of the Executive’s responsibilitiesas 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 inthe 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 “GoodReason”; 

(b) Any failure by the Company to comply with any of the provisions of Section 3 hereof, other than an isolated andinadvertent 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 tendays’ prior written notice from the Company or the Executive of the requirements of Section 11 hereof. 

“***ParentCompany***” 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 withthe 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 tosuch 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 ofdirectors 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; 

(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, ifreference was made to equity ownership of any Parent Company for purposes of determining whether clause (a) above is satisfied in connection with the applicable 

 

-16- 

Change in Control, such Parent Company) will beneficially own, directly or indirectly, 40% or more of, respectively, the outstanding shares of common stockof 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 theCompany prior to the Change in Control; and 

(c) individuals who were members of the Incumbent Board will immediately after theconsummation 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). 

“***SuccessorCompany***” shall mean the surviving company, the successor company or Parent Company, as applicable, in connection with a Change in Control. 

 

-17-