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EXHIBIT 10.5
VOTING AGREEMENT
THIS VOTING AGREEMENT (the "Agreement") is being executed and delivered as
of December 8, 1995 by the undersigned Shareholders (each a "Shareholder") in
favor of VIEWSTAR CORPORATION, a California corporation ("ViewStar"), XXXXXX
XXXXXXXXXXXX, President and Chief Executive Officer of ViewStar, and XXXX XXXXX,
Chairman of the Board of Directors of ViewStar (the "Executives").
RECITALS
A. Pursuant to an Agreement and Plan of Merger and Reorganization dated as
of October 9, 1995, as Amended and Restated on October 23, 1995, by and among
Caere Corporation, a Delaware corporation ("Caere"), ViewStar, ViewStar
Acquisition Corp., a California corporation and a wholly owned subsidiary of
Caere ("Merger Sub"), and certain shareholders of ViewStar (the "Reorganization
Agreement"), Merger Sub is merging into ViewStar (the "Merger"). As a result of
the Merger, ViewStar is becoming a wholly owned subsidiary of Caere.
B. In connection with the Merger, pursuant to employment agreements between
ViewStar and the Executives, the Executives will receive certain payments and
benefits, including substantial cash payments and the acceleration of certain
stock options (the "Benefits"). To the extent that some portion of the Benefits
may be deemed to be "excess parachute payments" as defined in Section 280G of
the Internal Revenue Code of 1986, as amended (the "Code") and the proposed
Treasury Regulations promulgated thereunder (the "Proposed Regulations"),
payment of that portion shall be contingent upon receiving approval of
ViewStar's shareholders in accordance with Code Section 280G(b)(4)(B) and the
Proposed Regulations.
C. The Shareholders hereby agree to vote all of the outstanding shares of
ViewStar Common Stock and ViewStar Preferred Stock ("ViewStar Capital Stock")
held by each such Shareholder (the "Shares") in favor of the payment of the
Benefits to the Executives.
AGREEMENT
In consideration of the foregoing premises, which are hereby incorporated
into this Agreement, and for other good and valuable consideration, the receipt,
sufficiency and adequacy of which is hereby acknowledged, each Shareholder,
severally and not jointly, hereby agrees as follows:
1. Representations of Shareholders. Each Shareholder, severally and not
jointly, represents that such Shareholder (i) is the holder and beneficial owner
of that number of Shares set forth under such Shareholder's signature below,
(ii) has full power and authority to make, enter into and carry out the terms of
this Agreement, and (iii) has received all material facts regarding the
Benefits.
2. Agreement to Vote Shares. Each Shareholder shall vote such
Shareholder's Shares and any of such Shareholder's New Shares (as defined in
Section 7 below), and shall cause any holder of record of such Shareholder's
Shares or New Shares to vote in favor of approval of the Benefits, at every
meeting of the shareholders of ViewStar called for such purpose (and every
adjournment thereof) or by written consent in lieu of such a meeting or
otherwise (a "Shareholder Vote").
3. Description of Benefits. Xxxxxx Xxxxxxxxxxxx and Xxxx Xxxxx have
entered into agreements with the Company providing that the provision of
benefits and payments described in this Section 3 will not be paid or otherwise
made available to them unless shareholder approval of such benefits is obtained
in accordance with the requirements of Code Section 280G(b)(4)(B) and the
Proposed Regulations promulgated.
Xx. Xxxxxxxxxxxx entered into an amended and restated employment agreement
with ViewStar on October 9, 1995, with an employment term expiring July 31, 1996
(the "Employment Term:), at a base compensation rate of $171,000 per year, plus
a guaranteed bonus of 20% of his base compensation. He is also
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eligible for an additional bonus of 20% of his base compensation pursuant to
ViewStar's 1995 Management Incentive Plan program. Xx. Xxxxxxxxxxxx will receive
a lump sum severance payment of $258,000 and his remaining salary and guaranteed
bonus upon termination of his employment without cause during the Employment
Term or, if later, on January 15, 1996. The agreement also provides that Xx.
Xxxxxxxxxxxx will become a consultant to ViewStar for a period of 12 months
commencing upon his termination of employment. As compensation for his
consulting services, and for his agreement not to solicit or hire ViewStar
employees for 12 months following termination for his employment and an
agreement not to compete, Xx. Xxxxxxxxxxxx will be paid a lump sum fee of
$400,000 upon termination of his employment with ViewStar. On the Merger Date,
an option to purchase 50,000 shares of Common Stock granted to Xx. Xxxxxxxxxxxx
in May 1994 will become exercisable as to 2% of the shares for each month since
May 1994 and will continue vesting through July 31, 1997 at a rate of 2% per
month, whether or not he continues to be employed by ViewStar. Mr.
Kheirolomoom's other stock options will also continue to vest through July 31,
1997 at a rate of 2% per month, whether or not he continues to be employed by
ViewStar.
Xxxx Xxxxx entered into an employment agreement with ViewStar dated May 18,
1994 when Xx. Xxxxx became President and Chief Executive Officer of ViewStar.
The agreement was amended on September 25, 1995, following Xx. Xxxxx'x
relinquishment in July 1995 of the position of President and Chief Executive
Officer and his appointment as Chairman of the Board of Directors of ViewStar.
Pursuant to the employment agreement, as amended, Xx. Xxxxx continues to receive
his base salary of $200,000 per year, a bonus of $50,000 payable in monthly
increments beginning October 1, 1995, and continued ViewStar health benefits
through July 25, 1996. In addition, Xx. Xxxxx will be paid $1,000 per day for
any additional services rendered on behalf of ViewStar, such services to be
provided up to five days per month through December 31, 1995 and up to two days
per month thereafter, until July 26, 1996. Xx. Xxxxx will also receive a payment
of $200,000 in the event of the sale of ViewStar, consummated prior to July 21,
1996, in recognition for his services of behalf of the Company. On the Merger
Date, Xx. Xxxxx'x option to purchase 50,000 shares of ViewStar Common Stock will
become exercisable as to 2% of the shares for every month the option has been
outstanding since the grant date in May 1994. Additionally, Xx. Xxxxx'x
agreement provides for the acceleration of vesting of 50% of any unvested
ViewStar Options held by Xx. Xxxxx, upon a change of control of ViewStar. Any
remaining unvested options held by Xx. Xxxxx will continue to vest at the rate
of 2% per month for as long as Xx. Xxxxx continues to provide services to
ViewStar as an employee or consultant. Xx. Xxxxx'x agreement also contains a
covenant not to solicit employee of ViewStar for one year following his
termination of employment with ViewStar.
4. Effectiveness of Voting Agreement. This Agreement shall be effective
only when executed and delivered by the holders of more than 75% of the
outstanding shares of ViewStar Capital Stock (excluding ViewStar Capital Stock
held by the Executives). Each Shareholder's agreement hereunder is a separate
agreement and the representations and covenants of each Shareholder apply only
to such Shareholder and not to any other Shareholder. The action (or inaction)
by one Shareholder shall have no effect on the rights or obligations of any
other Shareholder.
5. Reliance by Executives on Voting Agreement. Each Shareholder
understands that each of the Executives is relying upon the representations and
obligations of each Shareholder to this Agreement.
6. Irrevocable Proxy. Concurrently with the execution of this Agreement,
each Shareholder agrees to deliver to ViewStar a proxy in the form attached
hereto as Exhibit A (the "Proxy"), which shall be irrevocable to the extent
provided in Section 705 of the California General Corporation Law and shall be
deemed to be coupled with an interest, with the total number of Shares
beneficially owned (as such term is defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended) by Shareholder set forth therein.
7. Transfer and Encumbrance. Each Shareholder agrees, severally and not
jointly, not to transfer, sell, offer or otherwise dispose of or encumber any of
its Shares or New Shares prior to the earlier of (i) the effective date of the
Merger and (ii) the date the Reorganization Agreement shall have been terminated
in accordance with its terms.
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8. Additional Purchases. Each Shareholder agrees, severally and not
jointly, that any new shares of ViewStar Capital Stock acquired or purchased by
such Shareholder shall be subject to the terms of this Agreement to the same
extent as if they constituted Shares. For purposes of this Agreement, the term
"New Shares" shall mean any shares of ViewStar Capital Stock that a Shareholder
purchases, otherwise acquires beneficial ownership of, or acquires the right to
vote or share in the voting of, after the execution of this Agreement, including
without limitation through the exercise of any options or warrants to purchase
ViewStar Capital Stock.
9. Notices. Any notice or other communication required or permitted to be
delivered to ViewStar, the Executives or Shareholder under this Agreement shall
be in writing and shall be deemed properly delivered, given and received when
delivered (by hand, by registered mail, by courier or express delivery service
or by facsimile) to the address or facsimile number as follows (or to such other
address or facsimile number as such party shall have specified in a written
notice given to the other party):
IF TO VIEWSTAR: ViewStar Corporation
0000 Xxxxxx Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
IF TO THE EXECUTIVES: ViewStar Corporation
0000 Xxxxxx Xxxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxxxxxx
Attention: Xxxx Xxxxx
Facsimile: (000) 000-0000
IF TO SHAREHOLDER: AT ITS ADDRESS OR FACSIMILE AS SET FORTH UNDER
ITS SIGNATURE BELOW.
IF TO THE PROXY
HOLDER: X. Xxxxxx Xxxxx, Jr.
Xxxxxxxx Fund
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
10. Severability. If any provision of this Agreement or any part of any
such provision is held under any circumstances to be invalid or unenforceable in
any jurisdiction, then (a) such provision or part thereof shall, with respect to
such circumstances and in such jurisdiction, be deemed amended to conform to
applicable laws so as to be valid and enforceable to the fullest possible
extent, (b) the invalidity or unenforceability of such provision or part thereof
under such circumstances and in such jurisdiction shall not affect the validity
or enforceability of such provision or part thereof under any other
circumstances or in any other jurisdiction, and (c) such invalidity of
enforceability of such provision or part thereof shall not affect the validity
or enforceability of the remainder of such provision or the validity or
enforceability of any other provision of this Agreement. Each provision of this
Agreement is separable from every other provision of this Agreement, and each
part of each provision of this Agreement is separable from every other part of
such provision.
11. Governing Law. This Agreement shall be construed in accordance with,
and governed in all respects by, the laws of the State of California, without
giving effect to principles of conflicts of laws.
12. Entire Agreement. This Agreement and the Proxy set forth the entire
understanding of each Shareholder, ViewStar and the Executives relating to the
subject matter hereof and supersede all prior agreements and understandings
between any of such parties relating to the subject matter hereof.
13. Waiver. No failure on the part of ViewStar, either of the Executives
or any Shareholder to exercise any power, right, privilege or remedy under this
Agreement, and no delay on the part of ViewStar, either of the Executives or any
Shareholder in exercising any power, right, privilege or remedy under this
Agreement, shall operate as a waiver of such power, right, privilege or remedy;
and no single or partial exercise of any such power, right, privilege or remedy
shall preclude any other or further exercise thereof or of any other power,
right, privilege or remedy. Neither ViewStar, neither of the Executives nor any
Shareholder shall be deemed
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to have waived any claim arising out of this Agreement, or any power, right,
privilege or remedy under this Agreement, unless the waiver of such claim,
power, right, privilege or remedy is expressly set forth in a written instrument
duly executed and delivered on behalf of such party; and any such waiver shall
not be applicable or have any effect except in the specific instance in which it
is given.
14. Captions. The captions contained in this Agreement are for convenience
of reference only, shall not be deemed to be a part of this Agreement and shall
not be referred to in connection with the construction or interpretation of this
Agreement.
15. Further Assurances. Each Shareholder shall execute and/or cause to be
delivered to ViewStar and the Executives such instruments and other documents
and shall take such other actions as ViewStar and the Executives may reasonably
request to effectuate the intent and purposes of this Agreement.
16. Amendments. This Agreement may not be amended, modified, altered, or
supplemented other than by means of a written instrument duly executed and
delivered on behalf of ViewStar, the Executives and Shareholder.
17. Attorneys' Fees and Expenses. If any legal action or other legal
proceeding relating to the enforcement of any provision of this Agreement is
brought against Shareholder, the prevailing party shall be entitled to recover
reasonable attorneys' fees, costs and disbursements, in addition to any other
relief to which the prevailing party may be entitled.
18. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
19. Termination. This Agreement shall terminate upon the earlier to occur
of the Merger or the termination of the Reorganization Agreement in accordance
with its terms and all of the provisions hereof shall terminate at such time.
20. Assignment. This Agreement and all obligations hereunder are personal
to each Shareholder and may not be transferred or assigned by a Shareholder at
any time. ViewStar may, with Shareholder's written consent, which consent shall
not be unreasonably withheld, assign its rights under this Agreement to any
entity in connection with any sale or transfer of all or a substantial portion
of ViewStar's assets to such entity.
21. Binding Nature. Subject to Section 20, this Agreement will be binding
upon Shareholders and Shareholders' representatives, executors, administrators,
estate, heirs, successors and assigns, and will inure to the benefit of ViewStar
and its successors and assigns and to the Executives and their successors and
assigns.
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IN WITNESS WHEREOF, the undersigned has executed and delivered this
Agreement as of the date first written above.
SHAREHOLDER
By:
Print Name:
Title:
Address:
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Facsimile:
Shares of ViewStar Beneficially Owned:
Common Stock:
Series A Preferred Stock:
Series B Preferred Stock:
Series C Preferred Stock:
Series D Preferred Stock:
Series E Preferred Stock:
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EXHIBIT A
LIMITED IRREVOCABLE PROXY
The undersigned shareholder of ViewStar Corporation, a California
corporation ("ViewStar"), hereby irrevocably (to the extent provided in Section
705 of the California General Corporation Law) appoints X. Xxxxxx Xxxxxx, Jr.,
the attorney and proxy of the undersigned, with full power of substitution and
resubstitution, to vote the shares of ViewStar Common Stock and ViewStar
Preferred Stock ("ViewStar Capital Stock") beneficially owned by the
undersigned, which shares are listed below (the "Shares"), and any and all other
shares or securities issued or issuable in respect thereof or after the date
hereof, but only with respect to voting for the Benefits, as such term is
defined in the Voting Agreement to which this proxy is attached as Exhibit A,
until such time as that certain Agreement and Plan of Merger and Reorganization
dated as of October 9, 1995, as Amended and Restated on October 23, 1995 (the
"Reorganization Agreement"), among Caere Corporation, a Delaware corporation
("Caere"), ViewStar, ViewStar Acquisition Corp. and certain shareholders of
ViewStar, providing for the merger of ViewStar Acquisition Corp., a California
corporation and a wholly-owned subsidiary of Caere with and into ViewStar (the
"Merger"), shall be terminated in accordance with its terms or the Merger is
effective. Upon the execution hereof, all prior proxies given by the undersigned
with respect to the Shares and any and all other shares or securities issued or
issuable in respect thereof on or after the date hereof are hereby revoked, but
only to the extent that they relate to the payment of the Benefits to the
Executives, and no subsequent proxies will be given with respect to payment of
the Benefits to the Executives. This proxy is irrevocable (to the extent
provided in Section 705 of the California General Corporation Law) and is
granted in connection with that certain Voting Agreement dated as of December 8,
1995 between ViewStar and the undersigned shareholder. The attorney and proxy
named above will be empowered at any time prior to the earlier to occur of the
Merger or the termination of the Reorganization Agreement to exercise all voting
and other rights (including, without limitation, the power to execute and
deliver written consents with respect to the Shares) of the undersigned with
respect to the Shares, but only with respect to the payment of the Benefits to
the Executives, at every meeting of the shareholders of ViewStar (and every
adjournment thereof) or by written consent in lieu of such a meeting, or
otherwise, to vote the Shares in favor of approval of the payment of the
Benefits to the Executives.
Any obligation of the undersigned hereunder shall be binding upon the
successors and assigns of the undersigned.
Dated: December 8, 1995
SHAREHOLDER
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By:
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Print Name:
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Title:
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(if applicable)
Shares of ViewStar Beneficially Owned:
Common Stock:
Series A Preferred Stock:
Series B Preferred Stock:
Series C Preferred Stock:
Series D Preferred Stock:
Series E Preferred Stock:
