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NUMBER OF SECURITIES VALUE OF UNEXERCISED

UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS

SHARES VALUE OPTIONS AT 12/29/96(1) AT 12/29/96(2)

ACQUIRED ON REALIZED --------------------------- ---------------------------

NAME EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE

- ------------------------------ ------------ -------- ----------- ------------- ----------- -------------
Todd Basche................... -- -- 32,395 33,334 $ 159,062 $ 161,628

David D. Craft................ -- -- 41,457 88,543 $ 182,584 $ 136,366

Geoffrey C. Darby............. -- -- 3,125 46,875 -- $ 17,600

Bruce S. Mowery............... -- -- -- 150,000 -- --

Michael A. McConnell.......... -- -- -- -- -- --

- ---------------

(1) No stock appreciation rights (SARs) were outstanding during 1996.


(2) Based on the closing price of the Company's Common Stock of $5.13 per share

as reported on the Nasdaq National Market on December 27, 1996.


CHANGE-IN-CONTROL AGREEMENTS


In September 1996, the Company entered into Employment Agreements with each

of its executive officers pursuant to which such individuals, in the event of an

involuntary termination of their employment with the Company (other than for

cause), which involuntary termination includes a material reduction in job

responsibilities, a greater than 20% reduction in annual base compensation, or

the requirement that the executive officer relocate to a location outside of the

San Francisco Bay Area prior to, but in contemplation of, or within twelve (12)

months after, a Change of Control of the Company (as defined below), will be

entitled to receive payment of six (6) months severance and acceleration of

vesting on the greater of one-half of their unvested stock options or restricted

stock grants previously granted by the Company or the number of option shares or

shares of restricted stock previously granted by the Company that would have

vested if such individual remained an employee of the Company for one year after

the date of such involuntary termination. A Change of Control is deemed to

include: (i) the acquisition by any individual person or entity of twenty

percent (20%) or more of the Company's total voting power without the consent of

the Company or its Board of Directors; (ii) a merger or consolidation of the

Company, not approved by the Company or its Board of Directors, pursuant to

which at least fifty percent (50%) of the total voting power represented by the

voting securities of the Company prior to such Change of Control does not

continue to represent at least fifty percent (50%) of the total voting power of

the Company after such occurrence; (iii) a liquidation or sale or disposition

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of all or substantially all of the Company's assets without approval by the

Company's stockholders; or (iv) a change in the composition of the Company's

Board of Directors such that fewer than a majority of the directors are either

those who were serving as of October 22, 1996 ("Incumbent Directors") or are

elected to the Board by the Incumbent Directors.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee was formed in August 1995 to review

and approve the compensation and benefits for the Company's executive officers,

administer the Company's stock purchase and option plans and make

recommendations to the Board of Directors regarding such matters. Directors

Harding and Marquardt comprised the Compensation Committee of the Board of

Directors during 1996. Neither Dr. Harding nor Mr. Marquardt has ever been an

officer or employee of the Company or any of its subsidiaries, nor were there

any compensation committee interlocks or other relationships during 1996

requiring disclosure under item 402(j) of Regulation S-K of the Securities and

Exchange Commission.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of the Company's

Common Stock as of March 31, 1997 as to (i) each person (or group of affiliated

persons) who is known by the Company to beneficially own more than five percent

of the Company's Common Stock, (ii) each of the Company's directors, (iii) each

of the Named Executive Officers (as named in the Summary Compensation Table),

and (iv) all directors and executive officers as a group.


SHARES BENEFICIALLY

OWNED(1)

---------------------

NAME OF STOCKHOLDER NUMBER PERCENT

- ------------------------------------------------------------------------- --------- -------
Technology Venture Investors-IV(2)....................................... 2,191,199 11.3 %

2480 Sand Hill Road

Menlo Park, CA 94025

Morgan Stanley Venture Capital Fund II, L.P.(3).......................... 1,755,000 9.1

3000 Sand Hill Road

Building 4, Suite 250

Menlo Park, CA 94025

Parvest U.S. Partners II, C.V.(4)........................................ 1,647,779 8.8

Partech International, Inc.

101 California Street -- Suite 3150

San Francisco, CA 94111

Kleiner Perkins Caufield & Byers VI (5).................................. 1,075,612 5.6

2750 Sand Hill Road

Menlo Park, CA 94025

William J. Harding(3).................................................... 1,755,000 9.1

Jeffrey Heimbuck......................................................... 0

David F. Marquardt(2).................................................... 2,191,199 11.3

Michael A. McConnell..................................................... 573,331 3.0

Vincent Worms (4)........................................................ 1,647,779 8.8

J. Larry Smart........................................................... 15,000 *

Todd Basche(6)........................................................... 285,671 1.5

David D. Craft(6)........................................................ 182,105 *

Geoffrey C. Darby(6)..................................................... 122,595 *

Murray Dennis(6)......................................................... 3,124 *

Bruce S. Mowery(6)....................................................... 8,124 *

All directors and executive officers as a group

(11 persons)(2)(3)(5)(6)............................................... 6,833,928 35.2

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- ---------------

* Less than 1%
(1) Beneficial ownership is determined in accordance with the rules of the

Securities and Exchange Commission. In computing the number of shares

beneficially owned by a person and the percentage of ownership of that

person, shares of Common Stock subject to options held by that person that

are currently exercisable or exercisable within 60 days of March 31, 1997

are deemed outstanding. Such shares, however, are not deemed outstanding for

the purposes of computing the percentage ownership of each other person. The

persons named in this table have sole voting and investment power with

respect to all shares of Common Stock shown as beneficially owned by them,

subject to community property laws where applicable and except as indicated

in the other footnotes to this table.

(2) Includes 1,942,432 shares owned by Technology Venture Investors IV, L.P.,

227,031 shares owned by TVI Partners-IV, L.P., 16,736 shares owned by TVI

Affiliates-IV, L.P., and 5,000 shares issuable upon exercise of an

outstanding option exercisable within 60 days of March 31, 1997 held by

David F. Marquardt. Mr. Marquardt is a director of the Company, is a general

partner of TVI Management-IV, L.P., which is the sole general partner of

Technology Venture Investors IV, L.P., TVI Partners-IV, L.P. and TVI

Affiliates-IV, L.P, and, as such, Mr. Marquardt may be deemed to share

voting and investment power with respect to such shares. Mr. Marquardt

disclaims beneficial ownership of such shares except to the extent of his

pecuniary interest in such shares. Also includes 3,450 shares held directly

by Mr. Marquardt.


(3) Includes 1,159,959 shares owned by Morgan Stanley Venture Capital Fund II,

L.P., 301,052 shares owned by Morgan Stanley Venture Investors, L.P.,

288,989 shares owned by Morgan Stanley Venture Capital Fund II, C.V., and

5,000 shares issuable upon exercise of an outstanding option exercisable

within 60 days of March 31, 1997 held by William J. Harding, a director of

the Company. Mr. Harding is a general partner of Morgan Stanley Venture

Partners II, L.P., the general partner of Morgan Stanley Venture Capital

Fund II, L.P., Morgan Stanley Venture Investors, L.P. and Morgan Stanley

Venture Capital Fund II, C.V. and, as such, may be deemed to share voting

and investment power with respect to such shares. Dr. Harding disclaims

beneficial ownership with respect to such shares except to the extent of his

pecuniary interest in such shares.


(4) Includes 869,722 shares owned by Parvest U.S. Partners II, C.V., 361,945

shares owned by Paribas U.S. Partners, V.O.F., 394,494 shares held by

certain entities that may be deemed affiliated with Parvest U.S. Partners

II, C.V. and Paribas U.S. Partners, V.O.F., and 5,000 shares issuable upon

exercise of an outstanding option exercisable within 60 days of March 31,

1997 held by Vincent Worms. Mr. Worms is a director of the Company, is a

general partner of Parvest U.S. Partners II, C.V. and is a general partner

of the general partner of the investment general partner of Paribas U.S.

Partners, V.O.F. and, as such, may be deemed to share voting and investment

power with respect to such shares. Mr. Worms disclaims beneficial ownership

with respect to such shares except to the extent of his pecuniary interest

in such shares. Also includes 16,000 shares held directly by Mr. Worms.


(5) Includes 928,221 shares owned by Kleiner Perkins Caufield & Byers VI,

142,391 shares held by KPCB VI Founders' Fund. KPCB VI Associates is the

general partner of Kleiner Perkins Caufield & Byers VI and KPCB VI and 5,000

shares issuable upon exercise of outstanding options held by James P. Lally

as of March 1997, who resigned as a director of the Company in March 1997.

Mr. Lally is a general partner of KPCB VI Associates and a limited partner

of Kleiner Perkins Caufield & Byers VI and, as such may be deemed to share

voting and investment power with respect to such shares.


(6) Includes 15,000 shares issuable upon the exercise of outstanding options

held by Mr. Smart, 44,374 shares issuable upon the exercise of outstanding

options held by Mr. Basche, 51,874 shares issuable upon the exercise of

outstanding options held by Mr. Craft, 6,250 shares issuable upon the

exercise of outstanding options held by Mr. Darby, 3,124 shares issuable

upon exercise of outstanding options held by Mr. Dennis, and 8,124 shares

issuable upon exercise of outstanding options held by Mr. Mowery which are

currently exercisable or exercisable within 60 days of March 31, 1997.

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

In February 1996, the Company entered into a Settlement Agreement and

Mutual Release with Marc Randolph, who was then the Vice President of Marketing

of the Company, pursuant to which Mr. Randolph's position as an officer of the

Company was terminated. In addition, under such severance agreement, Mr.

Randolph remained an employee of the Company until September 1996, and continued

to vest in shares of Common Stock held by him until such time. In connection

with Mr. Randolph's termination of employment in September 1996, the Company

repurchased 129,167 shares of Common Stock from Mr. Randolph at the original

issue price of $0.40 per share, which shares were purchased by Mr. Randolph in

April 1995 as part of the purchase of 200,000 shares of Common Stock under the

Company's 1993 Restricted Stock Purchase Plan in consideration of a promissory

note issued to the Company in the principal amount of $80,000. In connection

with such repurchase, the Company canceled $51,666.80 under such promissory note

and Mr. Randolph repaid the remaining principal and interest owing under such

note.


In May 1996, the Company entered into a Settlement Agreement and Mutual

Release with Linda Starr, who was then the Vice President of Sales of the

Company, pursuant to which Ms. Starr's employment with the Company terminated.

In connection with such termination, the Company paid Ms. Starr $115,000 as

severance pay and accelerated the vesting of 13,125 shares under an option to

purchase 70,000 shares of Common Stock at an exercise price of $0.40 per share

and 1,875 shares under an option to purchase 10,000 shares of Common Stock at an

exercise price of $0.40 per share in addition to the number of shares that were

vested under such option grants as of the date of Ms. Starr's termination.

In April 1995, the Company sold to Michael A. McConnell, the President and

Chief Executive Officer of the Company, 560,000 shares of restricted Common

Stock at a purchase price of $0.40 per share pursuant to the Company's 1993

Restricted Stock Purchase Plan. These shares are subject to repurchase by the

Company, at the original $0.40 per share purchase price, upon Mr. McConnell's

cessation of service prior to vesting in those shares. In connection with the

share purchase, the Company loaned $224,000 to Mr. McConnell pursuant to a

promissory note secured by the 560,000 shares of restricted Common Stock

purchased by Mr. McConnell. In April 1997, the Company entered into a Settlement

Agreement and Mutual Release with Michael A. McConnell, who was then the

President, Chief Executive Officer and a director of the Company, pursuant to

which Mr. McConnell resigned his position as an officer of the Company as of

April 3, 1997. In addition, under such agreement, Mr. McConnell will remain a

part-time employee of the Company at his current base salary until September 30,

1997 and will continue to vest in such shares until such time. The Company

intends to repurchase the unvested shares at that time. Furthermore, under such

agreement, Mr. McConnell will remain a director of the Company until requested

to resign by the Company's Board of Directors.

In September 1996, the Company entered into Employment Agreements with each

of its executive officers. See "Item 11 -- Executive

Compensation -- Change-in-Control Agreements."

The Company believes that the relationships set forth above are on terms no

less favorable to the Company than could have been obtained from unaffiliated

third parties. All future transactions, including loans, between the Company and

its officers, directors, principal shareholders and affiliates will be approved

by a majority of the Board of Directors, including a majority of the independent

and disinterested outside directors on the Board of Directors, and will be on

terms no less favorable to the Company than could be obtained from unaffiliated

third parties.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) The following documents are filed as a part of this Report:
(1) Financial Statements -- See Index to Financial Statements at Item 8

of this Report.
(2) Financial Statements Schedules -- The following financial statement

schedule for the Company's fiscal years ended December 31, 1996,

1995 and 1994 is contained in Item 8 of this Report:
II -- Valuation and Qualifying Accounts and Reserves
Report of Price Waterhouse LLP, Independent Accountants. Refer to Item

8 above.
Any other necessary financial statement schedules required by Item 8

of the Report have been incorporated into the Financial Statements

included as part of this Report.
(3) Exhibits -- Refer to Item 14(c) below.
(b) Reports on Form 8-K.
The Company filed a current Report on Form 8-K reporting that on

October 23, 1996, the Company's Board of Directors had declared a dividend

of one preferred share purchase right for each outstanding share of Common

Stock, entitling stockholders of record on November 11, 1996 to purchase

from the Company one one-thousandth of a share of Series A Preferred Stock

of the Company at a price of $27.50 pursuant to the terms of a Preferred

Shares Rights Agreement dated as of October 23, 1996 between the Company

and U.S. Stock Transfer Corporation, as rights agent.
(c) Exhibits.
Exhibits (numbered in accordance with Item 601 of Regulation S-K)

EXHIBIT NO. DESCRIPTION OF EXHIBITS

- ------------ --------------------------------------------------------------------------------
3.2(1) Bylaws of Registrant.

3.4(1) Amended and Restated Certificate of Incorporation of Registrant.

4.1(1) Form of Common Stock Certificate.

4.2(6) Preferred Shares Rights Agreement, dated as of October 23, 1996, between the

Registrant and U.S. Stock Transfer Corporation, including the Certificate of

Designation of Rights, Preferences and Privileges of Series A Participating

Preferred Stock, the form of Rights Certificate and Summary of Rights attached

thereto as Exhibits A, B and C, respectively.

10.1(1) Form of Indemnification Agreement.

10.2(1)** 1993 Incentive Stock Option Plan and form of Option Agreement.

10.3(1)** 1995 Employee Stock Purchase Plan and form of Subscription Agreement.

10.4(1)** 1995 Directors' Option Plan and form of Option Agreement.

10.5(1) Third Amended and Restated Registration Rights Agreement dated May 9, 1995 among

the Registrant and certain security holders of the Registrant.

10.7(1) OEM Agreement dated November 2, 1994 between the Registrant and Hewlett-Packard

Company, as amended by Amendment No. 1 dated August 1, 1995.

10.8(1) Distribution Agreement dated January 31, 1994 between the Registrant and Ingram

Micro Inc.

10.9(1) Distribution Agreement dated February 24, 1994 between the Registrant and

Merisel Americas, Inc.

10.10(1) Manufacturing Contract dated March 30, 1995 between the Registrant and

Flextronics Technologies, Inc.

10.11(1) Manufacturing Services Agreement dated June 20, 1995 between the Registrant and

International Business Machines Corporation.
47
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EXHIBIT NO. DESCRIPTION OF EXHIBITS

- ------------ --------------------------------------------------------------------------------
10.12(1)** Loan Agreement dated March 31, 1994 between the Registrant and Todd Basche.

10.13(1) LZW Paper Input System Patent License Agreement dated October 20, 1995 between

the Registrant and Unisys Corporation.

10.14(1) Patent License agreement dated November 13, 1995 between the Registrant and Wang

Laboratories, Inc.

10.15(1) Loan and Security Agreement dated November 28, 1995 between the Registrant and

Silicon Valley Bank.

10.16(2) Amendment No. 2 dated December 15, 1995 to OEM Agreement dated November 2, 1994

between the Registrant and Hewlett-Packard Company.

10.17(2) Amendment No. 3 dated January 31, 1995 to OEM Agreement dated November 2, 1994

between the Registrant and Hewlett-Packard Company.

10.18(3) OEM Agreement dated June 30, 1995 between the Registrant and Compaq Computer

Corporation.

10.19(4) Building Lease dated May 21, 1996 between the Registrant and John Arrillaga,

Trustee, or his Successor Trustee, UTA dated 7/20/77 (Arrillaga Family Trust) as

amended, and Richard T. Peery, Trustee, or his Successor Trustee, UTA dated

7/20/77 (Richard T. Peery, Separate Property Trust) as amended.

10.20(5) Software License Agreement dated August 14, 1996 between the Registrant and

Hewlett-Packard Company.

10.21** Form of Employment Agreement between the Registrant and each of its Executive

Offices.

11.1 Calculation of Earnings Per Share.

23.1 Consent of Price Waterhouse LLP

24.1(7) Power of Attorney.

27.1 Financial Data Schedule

- ---------------

(1) Incorporated by reference from the Registrant's Registration Statement on

Form S-1 (No. 33-98356) filed with the Commission on October 19, 1995.

(2) Incorporated by reference from the Registrant's Annual Report on Form 10-K

for the fiscal year ended December 31, 1995.

(3) Incorporated by reference from the Registrant's Quarterly Report on Form

10-Q for the fiscal quarter ended March 31, 1996.
(4) Incorporated by reference from the Registrant's Quarterly Report on Form

10-Q for the fiscal quarter ended June 30, 1996.
(5) Incorporated by reference from Exhibit 10.19 of the Registrant's Quarterly

Report on Form 10-Q for the fiscal quarter ended September 30, 1996.
(6) Incorporated by reference from Exhibit 4.1 of the Registrant's current

Report on Form 8-K dated October 30, 1996.

(7) Incorporated by reference from Registrant's Annual Report on Form 10-K for

the fiscal year ended December 29, 1996.

** Management compensatory plan or arrangement.
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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities

Exchange Act of 1934, the Company has duly caused this report to be signed on

its behalf by the undersigned, thereunto duly authorized, in the City of

Fremont, State of California, on April 25, 1997.

VISIONEER, INC.
By:

------------------------------------

Geoffrey C. Darby

Vice President of Finance and

Administration and Chief Financial

Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this

report has been signed below by the following persons on behalf of the

registrant and in the capacities and on the dates indicated.


SIGNATURE TITLE DATE

- ----------------------------------- ------------------------------------------ ---------------

/s/ J. LARRY SMART* President, Chief Executive Officer and April 25, 1997

- ----------------------------------- Director

J. Larry Smart (Principal Executive Officer)
/s/ GEOFFREY C. DARBY Vice President of Finance and April 25, 1997

- ----------------------------------- Administration, Chief Financial Officer

Geoffrey C. Darby (Principal Financial and Accounting

Officer)
/s/ MICHAEL A. MCCONNELL* Director April 25, 1997

- -----------------------------------

Michael A. McConnell
/s/ WILLIAM J. HARDING* Director April 25, 1997

- -----------------------------------

William J. Harding
/s/ JEFFREY HEIMBUCK Director April , 1997

- -----------------------------------

Jeffrey Heimbuck
/s/ DAVID F. MARQUARDT* Director April 25, 1997

- -----------------------------------

David F. Marquardt
/s/ VINCENT WORMS* Director April 25, 1997

- -----------------------------------

Vincent Worms
*By: /s/ GEOFFREY C. DARBY April 25, 1997

- -----------------------------------

Geoffrey C. Darby

Attorney-in-fact

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INDEX TO EXHIBITS

SEQUENTIALLY

EXHIBIT NUMBERED

NUMBER DESCRIPTION OF EXHIBITS PAGE

- --------- -----------------------------------------------------------------------------------
3.2(1) Bylaws of Registrant..................................................

3.4(1) Amended and Restated Certificate of Incorporation of Registrant.......

4.1(1) Form of Common Stock Certificate......................................

4.2(6) Preferred Shares Rights Agreement, dated as of October 23, 1996,

between the Registrant and U.S. Stock Transfer Corporation, including

the Certificate of Designation of Rights, Preferences and Privileges

of Series A Participating Preferred Stock, the form of Rights

Certificate and Summary of Rights attached thereto as Exhibits A, B

and C, respectively...................................................

10.1(1) Form of Indemnification Agreement.....................................

10.2(1)** 1993 Incentive Stock Option Plan and form of Option Agreement.........

10.3(1)** 1995 Employee Stock Purchase Plan and form of Subscription

Agreement.............................................................

10.4(1)** 1995 Directors' Option Plan and form of Option Agreement..............

10.5(1) Third Amended and Restated Registration Rights Agreement dated May 9,

1995 among the Registrant and certain security holders of the

Registrant............................................................

10.7(1) OEM Agreement dated November 2, 1994 between the Registrant and

Hewlett-Packard Company, as amended by Amendment No. 1 dated August 1,

1995..................................................................

10.8(1) Distribution Agreement dated January 31, 1994 between the Registrant

and Ingram Micro Inc. ................................................

10.9(1) Distribution Agreement dated February 24, 1994 between the Registrant

and Merisel Americas, Inc. ...........................................

10.10(1) Manufacturing Contract dated March 30, 1995 between the Registrant and

Flextronics Technologies, Inc. .......................................

10.11(1) Manufacturing Services Agreement dated June 20, 1995 between the

Registrant and International Business Machines Corporation............

10.12(1)** Loan Agreement dated March 31, 1994 between the Registrant and Todd

Basche ...............................................................

10.13(1) LZW Paper Input System Patent License Agreement dated October 20, 1995

between the Registrant and Unisys Corporation.........................

10.14(1) Patent License agreement dated November 13, 1995 between the

Registrant and Wang Laboratories, Inc. ...............................

10.15(1) Loan and Security Agreement dated November 28, 1995 between the

Registrant and Silicon Valley Bank....................................

10.16(2) Amendment No. 2 dated December 15, 1995 to OEM Agreement dated Novem-

ber 2, 1994 between the Registrant and Hewlett-Packard Company........

10.17(2) Amendment No. 3 dated January 31, 1995 to OEM Agreement dated November

2, 1994 between the Registrant and Hewlett-Packard Company............

10.18(3) OEM Agreement dated June 30, 1995 between the Registrant and Compaq

Computer Corporation..................................................

10.19(4) Building Lease dated May 21, 1996 between the Registrant and John

Arrillaga, Trustee, or his Successor Trustee, UTA dated 7/20/77

(Arrillaga Family Trust) as amended, and Richard T. Peery, Trustee, or

his Successor Trustee, UTA dated 7/20/77 (Richard T. Peery, Separate

Property Trust) as amended............................................

52


SEQUENTIALLY

EXHIBIT NUMBERED

NUMBER DESCRIPTION OF EXHIBITS PAGE

- --------- -----------------------------------------------------------------------------------
10.20(5) Software License Agreement dated August 14, 1996 between the

Registrant and Hewlett-Packard Company................................

10.21(7)** Form of Employment Agreement between the Registrant and each of its

Executive Officers....................................................

11.1 Calculation of Earnings Per Share.....................................

23.1 Consent of Price Waterhouse LLP.......................................

24.1(2) Power of Attorney.....................................................

27.1 Financial Data Schedule...............................................

- ---------------

(1) Incorporated by reference from the Registrant's Registration Statement on

Form S-1 (No. 33-98356) filed with the Commission on October 19, 1995.

(2) Incorporated by reference from the Registrant's Annual Report on Form 10-K

for the fiscal year ended December 31, 1995.

(3) Incorporated by reference from the Registrant's Quarterly Report on Form

10-Q for the fiscal quarter ended March 31, 1996.
(4) Incorporated by reference from the Registrant's Quarterly Report on Form

10-Q for the fiscal quarter ended June 30, 1996.
(5) Incorporated by reference from Exhibit 10.19 of the Registrant's Quarterly

Report on Form 10-Q for the fiscal quarter ended September 30, 1996.
(6) Incorporated by reference from Exhibit 4.1 of the Registrant's current

Report on Form 8-K dated October 30, 1996.

(7) Incorporated by reference from Registrant's Annual Report on Form 10-K for

the fiscal year ended December 29, 1996.

** Management compensatory plan or arrangement.


1

EXHIBIT 10.21
VISIONEER, INC.
EMPLOYMENT AGREEMENT


This Employment Agreement (the "Agreement") is made and entered into

effective as of ____________, by and between ___________ (the "Employee") and

Visioneer, Inc., a Delaware corporation (the "Company").
R E C I T A L S
A. It is expected that another company or other entity may from

time to time consider the possibility of acquiring the Company or that a change

in control may otherwise occur, without the approval of the Company's Board of

Directors (the "Board"). The Board recognizes that such consideration can be a

distraction to the Employee and can cause the Employee to consider alternative

employment opportunities. The Board has determined that it is in the best

interests of the Company and its stockholders to assure that the Company will

have the continued dedication and objectivity of the Employee, notwithstanding

the possibility, threat or occurrence of a Change of Control (as defined below)

of the Company.
B. The Board believes that it is in the best interests of the

Company and its stockholders to provide the Employee with an incentive to

continue his or her employment with the Company.
C. The Board believes that it is imperative to provide the

Employee with certain benefits, upon termination of the Employee's employment

in connection with a Change of Control, which benefits are intended to provide

the Employee with financial security and provide sufficient income and

encouragement to the Employee to remain with the Company notwithstanding the

possibility of a Change of Control.
D. To accomplish the foregoing objectives, the Board of Directors

has directed the Company, upon execution of this Agreement by the Employee, to

agree to the terms provided in this Agreement.
E. Certain capitalized terms used in the Agreement are defined in

Section 3 below.

-1-
2

In consideration of the mutual covenants herein contained, and in

consideration of the continuing employment of Employee by the Company from the

date hereof, the parties agree as follows:
1. At-Will Employment. The Company and the Employee

acknowledge that the Employee's employment is and shall continue to be at-will,

as defined under applicable law. If the Employee's employment terminates for

any reason, including (without limitation) any termination prior to a Change of

Control (other than as provided herein), the Employee shall not be entitled to

any payments, benefits, damages, awards or compensation other than as provided

by this Agreement, or as may otherwise be available in accordance with the

Company's established employee plans and written policies at the time of

termination. The terms of this Agreement shall terminate upon the earlier of

(i) the date that all obligations of the parties hereunder have been satisfied,

or (ii) twelve (12) months after a Change of Control. A termination of the

terms of this Agreement pursuant to the preceding sentence shall be effective

for all purposes, except that such termination shall not affect the payment or

provision of compensation or benefits on account of a termination of employment

occurring prior to the termination of the terms of this Agreement.
2. Change of Control.
(a) Termination Following A Change of Control.

Subject to Section 4 below, if the Employee's employment with the Company is

terminated at any time prior to, but in contemplation of, or within twelve (12)

months after, a Change of Control, then the Employee shall be entitled to

receive or shall not be entitled to receive severance benefits as follows:
(i) Voluntary Resignation. If the

Employee voluntarily resigns from the Company (other than as an Involuntary

Termination (as defined below)) or if the Company terminates the Employee's

employment for Cause (as defined below), then the Employee shall not be

entitled to receive severance payments. The Employee's benefits will be

terminated under the Company's then existing benefit plans and policies in

accordance with such plans and policies in effect on the date of termination or

as otherwise determined by the Board of Directors of the Company.
(ii) Involuntary Termination. If the

Employee's employment is terminated as a result of an Involuntary Termination

other than for Cause, the Employee shall be entitled to receive a lump sum

severance payment equal to 6 months of the salary which the Employee was

receiving immediately prior to the Change of Control. In addition, each stock

option or stock grant granted for the Company's securities held by the Employee

shall become vested on the termination date as to the greater of: (i) one-half

of the
-2-
3

shares subject to such stock option or stock grant that have not otherwise

vested as of such date; or (ii) that number of the shares subject to such stock

option or stock grant that would have vested if the Employee remained an

employee of the Company for one year after the date of termination and shall be

exercisable to the extent so vested in accordance with the provisions of the

agreement and/or the Plan pursuant to which such stock option or stock grant

was granted. All other benefits will be terminated under the Company's then

existing benefit plans and policies in accordance with such plans and policies

in effect on the date of termination or as otherwise determined by the Board of

Directors of the Company.
(iii) Involuntary Termination for Cause.

If the Employee's employment is terminated for Cause, then the Employee shall

not be entitled to receive severance payments. The Employee's benefits will be

terminated under the Company's then existing benefit plans and policies in

accordance with such plans and policies in effect on the date of termination.
(b) Termination Apart from Change of Control. In

the event the Employee's employment terminates for any reason, either prior,

but in contemplation of, to the occurrence of a Change of Control (except as

otherwise provided in Section 2(a) herein) or after the twelve (12) month

period following the effective date of a Change of Control, then the Employee

shall not be entitled to receive any severance payments pursuant to the terms

of this Agreement. The Employee's benefits will be terminated under the

Company's then existing benefit plans and policies in accordance with such

plans and policies in effect on the date of termination or as otherwise

determined by the Board of Directors of the Company.
3. Definition of Terms. The following terms referred to

in this Agreement shall have the following meanings:
(a) Change of Control. "Change of Control" shall

mean the occurrence of any of the following events:
(i) Ownership. Any "Person" (as such

term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of

1934, as amended) is or becomes the "Beneficial Owner" (as defined in Rule

13d-3 under said Act), directly or indirectly, of securities of the Company

representing twenty percent (20%) or more of the total voting power represented

by the Company's then outstanding voting securities without the approval of the

Board of Directors of the Company; or
(ii) Merger/Sale of Assets. A merger or

consolidation of the Company not approved by the Board of Directors of the

Company. A "Change of Control" shall not include a merger or consolidation

which would result in the voting
-3-
4

securities of the Company outstanding immediately prior thereto continuing to

represent (either by remaining outstanding or by being converted into voting

securities of the surviving entity) at least 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, or

the approval by the stockholders of the Company of a plan of complete

liquidation of the Company or an agreement for the sale or disposition by the

Company of all or substantially all of the Company's assets.
(iii) Change in Board Composition. A

change in the composition of the Board of Directors of the Company, as a result

of which fewer than a majority of the directors are Incumbent Directors.

"Incumbent Directors" shall mean directors who either (A) are directors of the

Company as of October 22, 1996 or (B) are elected, or nominated for election,

to the Board of Directors of the Company with the affirmative votes of at least

a majority of the Incumbent Directors at the time of such election or

nomination (but shall not include an individual whose election or nomination is

in connection with an actual or threatened proxy contest relating to the

election of directors to the Company).
(b) Cause. "Cause" shall mean (i) gross

negligence or willful misconduct in the performance of the Employee's duties to

the Company where such gross negligence or willful misconduct has resulted or

is likely to result in substantial and material damage to the Company or its

subsidiaries (ii) repeated unexplained or unjustified absence from the Company,

(iii) a material and willful violation of any federal or state law; (iv)

commission of any act of fraud with respect to the Company; (v) conviction of a

felony or a crime involving moral turpitude causing material harm to the

standing and reputation of the Company; or (vi) a material and willful

violation of any of the provisions of the Company's Propriety Information

Agreement, in each case as determined in good faith by the Board of Directors

of the Company.
(c) Involuntary Termination. "Involuntary

Termination" shall include any termination by the Company other than for Cause;

or the Employee's voluntary termination, upon 30 days prior written notice to

the Company, within three (3) months following (i) a material reduction or

change in job duties, responsibilities and requirements inconsistent with the

Employee's position with the Company and the Employee's prior duties,

responsibilities and requirements, (ii) a greater than 20% reduction in the

Employee's annual base compensation, or (iii) the Employee's refusal to

relocate to a facility or location outside of the San Francisco Bay Area.
4. Excise Tax Payments. In the event that any payments

or benefits to be received by Employee pursuant to this Agreement would result

in the imposition of an excise tax pursuant to Section 4999 of the Internal

Revenue Code of 1986, as amended (the "Code")
-4-
5

or any corresponding provisions of state income tax law, Employee shall receive

the entire amount of the payments or benefits to which Employee is entitled

under this Agreement, in which event Employee shall be responsible for the

payment of all excise taxes imposed under the Code with respect to such

payments or benefits.
5. Successors. Any successor to the Company (whether

direct or indirect and whether by purchase, lease, merger, consolidation,

liquidation or otherwise) to all or substantially all of the Company's business

and/or assets shall assume the obligations under this Agreement and agree

expressly to perform the obligations under this Agreement in the same manner

and to the same extent as the Company would be required to perform such

obligations in the absence of a succession. The terms of this Agreement and

all of the Employee's rights hereunder shall inure to the benefit of, and be

enforceable by, the Employee's personal or legal representatives, executors,

administrators, successors, heirs, distributees, devisees and legatees.
6. Notice. Notices and all other communications

contemplated by this Agreement shall be in writing and shall be deemed to have

been duly given when personally delivered or when mailed by U.S. registered or

certified mail, return receipt requested and postage prepaid. Mailed notices

to the Employee shall be addressed to the Employee at the home address which

the Employee most recently communicated to the Company in writing. In the case

of the Company, mailed notices shall be addressed to its corporate

headquarters, and all notices shall be directed to the attention of its

Secretary.
7. Miscellaneous Provisions.
(a) No Duty to Mitigate. The Employee shall not

be required to mitigate the amount of any payment contemplated by this

Agreement (whether by seeking new employment or in any other manner), nor,

except as otherwise provided in this Agreement, shall any such payment be

reduced by any earnings that the Employee may receive from any other source.
(b) Waiver. No provision of this Agreement shall

be modified, waived or discharged unless the modification, waiver or discharge

is agreed to in writing and signed by the Employee and by an authorized officer

of the Company (other than the Employee). No waiver by either party of any

breach of, or of compliance with, any condition or provision of this Agreement

by the other party shall be considered a waiver of any other condition or

provision or of the same condition or provision at another time.
(c) Whole Agreement. No agreements,

representations or understandings (whether oral or written and whether express

or implied) which are not expressly set forth in this Agreement have been made

or entered into by either party with
-5-
6

respect to the subject matter hereof. This Agreement supersedes any agreement

of the same title and concerning similar subject matter dated prior to the date

of this Agreement, and by execution of this Agreement both parties agree that

any such predecessor agreement shall be deemed null and void.
(d) Choice of Law. The validity, interpretation,

construction and performance of this Agreement shall be governed by the laws of

the State of California without reference to conflict of laws provisions. The

parties agree that all disputes arising among them related to this Agreement,

whether arising in contract, tort, equity or otherwise, shall be resolved only

in the United States federal courts in the Northern District of California or

California state courts located in Alameda County, California. Each party

hereby waives any disputes it may have with respect to the location of any

court.
(e) Severability. If any term or provision of

this Agreement or the application thereof to any circumstance shall, in any

jurisdiction and to any extent, be invalid or unenforceable, such term or

provision shall be ineffective as to such jurisdiction to the extent of such

invalidity or unenforceability without invalidating or rendering unenforceable

the remaining terms and provisions of this Agreement or the application of such

terms and provisions to circumstances other than those as to which it is held

invalid or unenforceable, and a suitable and equitable term or provision shall

be substituted therefor to carry out, insofar as may be valid and enforceable,

the intent and purpose of the invalid or unenforceable term or provision.
(f) Arbitration. Any dispute or controversy

arising under or in connection with this Agreement may be settled at the option

of either party by binding arbitration in the County of Alameda, California, in

accordance with the rules of the American Arbitration Association then in

effect. Judgment may be entered on the arbitrator's award in any court having

jurisdiction. Punitive damages shall not be awarded.
(g) Legal Fees and Expenses. The parties shall

each bear their own expenses, legal fees and other fees incurred in connection

with this Agreement. The parties agree, however, that the prevailing party in

any arbitration proceeding brought under or in connection with this Agreement

shall be awarded reasonable attorneys' fees and costs.
(h) No Assignment of Benefits. The rights of any

person to payments or benefits under this Agreement shall not be made subject

to option or assignment, either by voluntary or involuntary assignment or by

operation of law, including (without limitation) bankruptcy, garnishment,

attachment or other creditor's process, and any action in violation of this

subsection (h) shall be void.
-6-
7

(i) Employment Taxes. All payments made pursuant

to this Agreement will be subject to withholding of applicable income and

employment taxes.
(j) Assignment by Company. The Company may

assign its rights under this Agreement to an affiliate, and an affiliate may

assign its rights under this Agreement to another affiliate of the Company or

to the Company; provided, however, that no assignment shall be made if the net

worth of the assignee is less than the net worth of the Company at the time of

assignment. In the case of any such assignment, the term "Company" when used

in a section of this Agreement shall mean the corporation that actually employs

the Employee.
(k) Counterparts. This Agreement may be executed

in counterparts, each of which shall be deemed an original, but all of which

together will constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this Agreement,

in the case of the Company by its duly authorized officer, as of the day and

year first above written.

VISIONEER, INC. [EMPLOYEE]
By:

---------------------------------------- ---------------------------
Title:

-------------------------------------
-7-



1
EXHIBIT 11.1
VISIONEER, INC.
COMPUTATION OF NET LOSS PER

COMMON SHARES AND EQUIVALENTS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

YEAR ENDED DECEMBER

31,

---------------------

1996 1995

-------- --------
Weighted average common shares outstanding............................. 19,088 4,481

Weighted average common equivalent shares from convertible preferred

stock and warrants, calculated using the if-converted method......... 7,418

Common equivalent shares from convertible preferred stock and options

issued between October 1, 1994 to December 12, 1995, included

pursuant to Staff Accounting Bulletin No. 83......................... 3,745

-------- --------

Weighted average common shares and equivalents......................... 19,088 15,644

======== ========

Net loss............................................................... $(24,392) $(11,553)

======== ========

Net loss per share..................................................... $ (1.28)

========

Unaudited pro forma net loss per share................................. $ (0.74)

========


1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration

Statements on Form S-8 (No.000-27038) of Visioneer, Inc. of our report dated

January 31, 1997 appearing on page 24 of Visioneer, Inc.'s Annual Report on Form

10-K. We also consent to the incorporation by reference of our report on the

Financial Statement Schedule, which appears on page 37 of this Annual Report on

Form 10-K.
Price Waterhouse LLP
San Jose, California
April 28, 1997



5



This schedule contains summary financial information extracted from the

condensed balance sheet, condensed statement of operations and condensed

statement of cash flows included in the Company's Form 10-K for the twelve

month period ended December 29, 1996, and is qualified in its entirety by

reference to such financial statements and the notes thereto.



1,000


12-MOS

DEC-29-1996


JAN-01-1996


DEC-29-1996

22,391

8,809

14,711

3,931

4,508

47,399


3,205

58,687

18,592

0


0


0

19

33,174

51,785

44,233

56,081

42,164

45,467

37,280

0

(2,274)

(24,392)

0

(24,392)

0

0

0

(24,392)

(1.27)

(1.28)
1   ...   4   5   6   7   8   9   10   11   12

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