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EXHIBIT 10.34
October 6, 1997
Mr. J. Xxxxx Xxxxx
00000 Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Dear Xxxxx:
The Board of Directors of Visioneer, Inc. (the "Company") is pleased to
offer you a full time employment position starting October 6, 1997 as permanent
President and CEO of Visioneer. You will report directly to the Board and all
Visioneer officers will report to you. Commencing on the date of this agreement,
your base salary will be $293,500 per year, payable in accordance with
Visioneer's standard payroll policy. You will be required to devote all of your
business time and attention to Visioneer's business, except that you may serve
on boards of directors of companies not competitive to Visioneer.
You will be paid a bonus for the third-quarter of 1997 of $30,000. In
addition, commencing in the fourth quarter of 1997, you will be eligible for
quarterly bonuses based on the fulfillment of certain performance objectives
agreed to between you and the Board on a quarterly basis. The amount of such
quarterly bonuses paid during any twelve month period will not exceed 50% of
your base salary during such twelve month period. In addition, you will receive
up to $5,000 per year for expenses incurred in purchasing private medical (which
will be paid on a quarterly basis) and disability insurance coverage at a cost
greater that the Company's current medical and disability benefits plans.
If at any time prior to January 6, 1998, your employment relationship
with Visioneer is terminated by the Company other than for Cause (as defined
below), you will continue to be paid your base salary from the date of
termination until January 6, 1998: "Cause" for purposes of this letter shall
mean unsatisfactory performance by you of your duties as determined by the Board
in its sole discretion, breaches of Visioneer policies or agreements, the
conviction of a felony, committing an act of dishonesty, fraud or intentional
illegal conduct against Visioneer, the misappropriation of Visioneer property,
the breach by you of any other arrangement or relationship between you and
another entity which the Board determines in its sole discretion to be injurious
to Visioneer in a material manner.
In addition to the above severance payment, which is applicable until
January 6, 1998, if at any time during the period of your employment
relationship with Visioneer, your relationship is terminated by the Company
other than for Cause, you will be entitled to a lump sum severance payment equal
to six months of your base salary existing at the time of such termination.
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The Company granted you on October 6, 1997 an option to purchase 500,000
shares of Visioneer Common Stock at the price of $3 7/8 per share (the "October
Option"). The October Option is in addition to the options granted to you in
April and June of 1997 (the "April Option" and "June Option," respectively).
The shares granted under the October Option will be incentive stock options
under the Company's 1993 Incentive Stock Option Plan (the "Plan") to the
maximum extent permitted by applicable IRS rules, with the balance of such
options being nonstatutory stock options. These options will vest at the rate
of 1/48th of the shares subject to the option per month commencing October 6,
1997 for so long as you remain President and CEO of Visioneer.
Upon the occurrence of a Change of Control (as defined below), 125,000 of
the shares subject to the October Option which have not otherwise vested as of
the effective date of the Change of Control shall immediately vest and may be
exercised in accordance with the provisions of the October Option and the Plan
(the "Automatic Accelerated Shares"). "Change of Control" for purposes of this
letter shall mean a merger or consolidation of the Company in which the voting
securities of the Company outstanding immediately prior thereto represent
(either by remaining outstanding or by being converted into voting securities
of the surviving entity) less than fifty percent (50%) of the total voting
power represented by the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation, the complete
liquidation of the Company, or the sale or disposition by the Company of all or
substantially all of the Company's assets.
In addition, if your relationship with Visioneer is terminated by the Company
other than for Cause in connection with a Change of Control, the greater of (i)
one-half of the unvested shares subject to the October Option that are not
vested as of the effective date of the Change of Control, after vesting of the
Automatic Accelerated Shares, or (ii) that number of shares subject to the
October Option that would have vested if you had remained President and CEO of
the Company for one year after the date of such termination, shall immediately
vest and may be exercised in accordance with provisions of the October Option
and the Plan.
In addition, the Board has determined that you have achieved the
performance milestones agreed to between you and the Board based on your
performance through September 30, 1997, and therefore, in accordance with the
July 7, 1997 letter agreement between you and Visioneer, the Board has
accelerated vesting under the June Option (as defined in the July 7, 1997
letter agreement) with respect to 45,000 shares. You acknowledge that all other
provisions of the June Option, which provided for the acceleration of vesting
of an additional 90,000 shares under the June Option under certain conditions
are hereby terminated, and the June Option and July 7, 1997 letter agreement
are hereby amended accordingly.
As with the April Option (also as defined in the July 7, 1997 letter
agreement) and the June Option, the October Option will be subject to the
execution by you of an Option Agreement setting forth in detail these terms.
Under such Option Agreement you will be entitled to exercise the October Option
with respect to the shares that have vested as of the date of termination for 90
days after such date. Except as set forth in this letter agreement, you will not
be entitled to any acceleration of vesting under April Option, June Option or
October Option. You will also
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not be entitled to any severance payment in connection with your employment
relationship with the Company or any termination thereof except as set forth in
this agreement. The salary and severance provisions set forth in the April 1,
1997 letter agreement between you and Visioneer shall no longer apply.
To the extent any severance and other benefits provided for in this
letter agreement constitute "parachute payments" within the meaning of Section
280G of the Internal Revenue Code (the "Code"), you will be entitled to either
(i) such benefits in full, or (ii) such lesser amount which would result in no
portion of such benefits being subject to excise tax under Section 4999 of the
Code, whichever of the foregoing amounts, taking into account the applicable
federal, state and local income taxes and such excise tax result in the receipt
by you on an after-tax basis, of the greatest amount of severance and other
benefits under this agreement.
Your employment relationship with Visioneer will continue to be "at
will" and will be terminable by either you or Visioneer at any time for any
reason.
We all look forward to a mutually profitable and enjoyable relationship
as we build Visioneer into a premier data input device company together.
Regards,
/s/ Xxxx Xxxxxxxx
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Xxxx Xxxxxxxx
For the Board of Directors of
Visioneer, Inc.
I agree to the above terms: /s/ J. Xxxxx Xxxxx Date: October 6, 1997
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J. Xxxxx Xxxxx
