Exhibit 10.31
COMPENSATION CONTINUATION AGREEMENT
This Compensation Continuation Agreement (the "Agreement") is entered into
as of January 5, 2000 by and between Identix Incorporated, a Delaware
corporation ("Identix"), and Xxxxx X. Xxxxxxxx ("Employee").
WHEREAS, Identix desires to secure an agreement from the Employee that
Employee will continue to provide his ongoing business time, energy and skills
to management and affairs of Identix;
WHEREAS, the Employee desires to provide Identix with such agreement and
obtain certain assurances from Identix;
NOW THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the parties hereto agree as follows:
1. Definitions. For purposes of this Agreement:
-----------
(a) "Effective Date" means the date first-above written.
(b) "Resignation for Good Reason" means a voluntary resignation
of employment by Employee as a result of a material diminution in
responsibility, decrease in base salary or an involuntary relocation; provided,
however, that Identix's hiring of a new Chairman and CEO will not, in and of
itself, constitute a material diminution in responsibility; and provided
further, however, that Employee notifies Identix on or prior to any such
resignation, giving good reason for such resignation, and Identix fails to cure
such event within 30 days thereafter.
(c) "Expiration Date" means March 31, 2002.
(d) "Termination For Cause" means termination by Identix of
Employee's employment by Identix (i) by reason of Employee's commission of a
felony or other conduct involving fraud or moral turpitude, (ii) by reason of
Employee's fraud upon, or deliberate injury or attempted injury to Identix,
(iii) by reason of Employee's failure to substantially perform for Identix the
normal material duties related to his job position (other than failure resulting
from incapacity due to disability or death) which failure continues for sixty
(60) days following the Employee's receipt of written notice of such failure to
perform, specifying the nature of the failure and the means by which it can be
remedied, (iv) by reason of Employee's willfully engaging in gross misconduct
which is materially and demonstrably injurious to Identix, or (v) by reason of
Employee's willful breach of this Agreement in any material respect.
(e) "Termination Other Than For Cause" means termination by
Identix of Employee's employment by Identix (other than in a Termination For
Cause). Included within the definition of "Termination Other Than For Cause"
shall be (i) Employee's death during the
term of this Agreement, (ii) termination of Employee's employment by Identix
based on Employee's failure to perform his duties under this Agreement on
account of illness or physical or mental incapacity for a period of more than
three (3) consecutive months or (iii) any other involuntary termination that
does not constitute a Termination For Cause.
(f) "Voluntary Termination" shall mean termination by Employee of
Employee's employment by Identix, excluding termination by reason of Employee's
death or disability as described in Section 1(e).
2. Duties. During the term of this Agreement, Employee shall devote
------
all of his business time, energy, and skill to the affairs of Identix; provided,
however, that Employee may undertake such specific additional charitable and
business activities, if any, as Identix may reasonably approve (including,
without limitation, activities for affiliates of Identix). During the term of
this Agreement, Employee shall report directly to the person indicated on
Schedule A, or to such other person or persons as may be selected by the Board
of Directors of Identix from time to time.
3. Term of Agreement. The term of this Agreement shall commence on
-----------------
the Effective Date and end on the Expiration Date, unless extended by mutual
written agreement of Employee and Identix or earlier terminated as provided in
this Agreement.
4. Termination For Cause. Termination For Cause may be effected by
---------------------
Identix at any time during the term of this Agreement and shall be effected by
written notification to Employee. Upon Termination For Cause, Employee shall be
immediately paid all accrued salary and bonus, and all accrued vacation pay, all
to the effective date of termination, but Employee shall not be paid any other
compensation or reimbursement of any kind, including, without limitation,
severance compensation.
5. Termination Other Than For Cause or Resignation for Good Reason.
----------------------------------------------------------------
Notwithstanding anything else in this Agreement, Identix may effect a
Termination Other Than For Cause at any time after giving at least 30 days'
notice to Employee of such termination or pay in lieu of such notice. Upon the
effective date of any Termination Other Than For Cause or Resignation for Good
Reason, (a) Employee shall immediately be paid all accrued salary and all
accrued vacation pay, all to the effective date of termination, (b) as severance
compensation, Employee shall continue to be paid his then current base salary
until that date which is one calendar year from the effective date of
termination ("Severance Period"), (c) Employee shall be paid all bonuses accrued
through the date of termination, (d) during the Severance Period, Identix shall
make COBRA payments to continue Employee's medical and dental benefits (or pay
Employee an amount equivalent to such COBRA payments) and shall make payments to
continue Employee's term life insurance (or pay Employee an amount equivalent to
the premiums in effect prior to termination), and (e) all outstanding options to
purchase Common Stock granted to Employee shall fully vest immediately, but
Employee shall not be paid any other compensation or reimbursement of any kind.
A schedule of all such outstanding options is attached hereto as Schedule B. If
any Termination Other Than For Cause is the result of the
2
death of Employee, all payments payable under this Section 5 shall be paid to
Employee's heirs or legal representative.
6. Voluntary Termination. In the event of a Voluntary Termination,
---------------------
Identix shall immediately pay to Employee all accrued salary and bonus, and all
accrued vacation pay, all to the effective date of termination, but no other
compensation or reimbursement of any kind, including, without limitation,
severance compensation.
7. Salary and Benefits.
-------------------
(a) Base Salary. As payment for the services to be rendered by
-----------
Employee as provided in Section 2 and subject to the terms and conditions of
this Agreement, Identix agrees to pay to Employee a "base salary" at the rate
per month indicated on Schedule A, subject to deductions, payable bi-weekly in
the same manner as other Identix employees receive their base compensation.
(b) Bonus. Employee shall be eligible for a bonus as indicated
-----
on Schedule A.
(c) Fringe Benefits. Employee shall be eligible to participate
---------------
in such of Identix's benefit plans as are now generally available or later made
generally available to employees of Identix. Such benefits shall at a minimum
include medical, dental and term life insurance.
(d) Car Allowance. Employee shall receive a car allowance of
-------------
$666.67 per month during the term of this Agreement.
8. Stock Options. In further consideration for Employee agreeing to
-------------
perform services for Identix hereunder, contemporaneously with the execution of
this Agreement, Employee and Identix shall enter into a stock option agreement
in the form attached hereto as Schedule C, covering the number of shares of
Identix Common Stock indicated on Schedule A.
9. Annual Performance Review. Identix shall perform an annual
-------------------------
review of Employee's performance and, in the discretion of the Compensation
Committee of the Board of Directors, make appropriate increases in Employee's
base salary, establish an incentive bonus program for the upcoming 12 months and
determine whether additional stock option grants should be recommended to the
Board of Directors of Identix. The first such annual performance review shall be
conducted on or about September 30, 2000.
10. Miscellaneous.
-------------
(a) Waiver. The waiver of any term or condition of this
------
Agreement by any party shall not be construed as a waiver of a subsequent breach
or failure of the same term or condition, or a waiver of any other term or
condition of this Agreement.
3
(b) Notices. All notices, requests, demands, and other
-------
communications made in connection with this Agreement shall be in writing and
shall be deemed to have been duly given on the date of delivery if delivered by
hand delivery or 12 hours after facsimile transmission to the persons identified
below or five days after mailing if mailed by certified or registered mail
postage prepaid return receipt requested addressed as follows:
If to Identix:
000 X. Xxxxxxxx Xxx.
Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Vice President and General Counsel
Facsimile: 000-000-0000
Confirmation No.: 000-000-0000
If to Employee:
To the address indicated for Employee on Schedule A
Any party may change its address for notices by notice duly given pursuant to
this Section 10(b).
(c) Headings. The headings contained in this Agreement are
--------
intended for convenience and shall not be used to interpret the meaning of this
Agreement or to determine the rights of the parties.
(d) Governing Law; Consent to Jurisdiction and Venue. This
------------------------------------------------
Agreement shall be governed by and construed in accordance with the laws of the
State of California applicable to contracts entered into and wholly to be
performed within the State of California by California residents. Employee
hereby submits to the jurisdiction and venue of the Superior Court of the State
of California for the County of Santa Xxxxx or the United States District Court
for the Northern District of California for any legal action arising from or
connected with this Agreement. Employee agrees that service upon Employee in any
such action may be made by first class mail, certified or registered, in the
manner provided for delivery of notices in Section 10(b).
(e) Successor and Assigns. This Agreement shall be binding upon
---------------------
and inure to the benefit of the executors, administrators, heirs, successors and
assigns of the parties; provided, however, that this Agreement shall not be
assignable by Identix (except in connection with the merger or consolidation of
Identix with or into another entity or the sale by Identix of all or
substantially all of its assets) or by Employee.
(f) Counterparts. This Agreement may be signed in counterparts
------------
with the same effect as if the signatures of each party were upon a single
instrument. All counterparts shall be deemed an original of this Agreement.
4
(g) Withholdings. All sums payable to Employee hereunder shall
------------
be reduced by all federal, state, local and other withholding and similar taxes
and payments required by applicable law.
(h) Severability. If any provision of this Agreement is held to
------------
be unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of the parties to the extent possible.
In any event, all other provisions of this Agreement shall be deemed valid and
enforceable to the full extent possible.
(i) Entire Agreement; Modifications. Except as otherwise
-------------------------------
provided herein, this Agreement represents the entire understanding between the
parties with respect to the subject matter hereof, and this Agreement supersedes
any and all prior understandings, agreements, plans and negotiations, written or
oral, with respect to the subject matter hereof. All modifications to the
Agreement must be in writing and signed by the party against whom enforcement of
such modification is sought, provided that no modification shall be enforceable
against Identix unless signed by the Chief Executive Officer of Identix or a
duly-authorized member of Identix's Board of Directors.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
IDENTIX INCORPORATED
By /s/ Xxxxx Xxxxx for Compensation Committee
Name: Xxxxxxx Xxxxx, Xx.
Title: Director
EMPLOYEE
By /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
5
COMPENSATION CONTINUATION AGREEMENT
SCHEDULE A
1. Name and address of Employee: Xxxxx X. Xxxxxxxx
00000 Xxxxx Xxxxx
Xxxxx Xxxxxx, XX 00000
Fax: (000) 000-0000
2. Term of Agreement: January 5, 2000 - March 31, 2002, unless earlier
terminated in accordance with its terms.
3. Base Salary: $250,000 per annum.
4. Bonus: (A)
5. Stock Options: 33,333 shares (B)
6. Initially report to: An Executive Committee of the Board of Directors
until such time as a permanent Chairman and CEO is hired.
(A) To be determined on an Annual Basis by the Compensation Committee.
(B) Option grant is for Employee's acceptance and performance of the additional
responsibilities (in addition to current responsibilities as President and
COO) as chief officer of the Company, responsible for the day-today
management of the Company's operations, to and through the hiring of a new
Chairman and CEO. Such options shall be non-qualified stock options with
an exercise price equal to 85% of the closing sales price on the American
Stock Exchange for Identix common stock on January 5, 2000. Such options
shall vest at a rate of 1/6 per month.
Agreed by:
Identix: /s/ Xxxxx Xxxxx for Compensation Committee
Xxxxxxx Xxxxx, Xx.
Employee: /s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
6
