<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
IDENTIX INCORPORATED
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/X/ Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
_
(2) Form, Schedule or Registration Statement No.:
_
(3) Filing Party:
_
(4) Date Filed:
_
<PAGE> 2
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS OF
IDENTIX INCORPORATED
TO BE HELD ON OCTOBER 30, 1996
TO THE SHAREHOLDERS:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Identix
Incorporated (the "Company") will be held on Wednesday, October 30, 1996 at 2:00
p.m. at the Company's principal executive offices located at 510 North Pastoria
Avenue, Sunnyvale, California 94086, for the purpose of considering and acting
upon the following proposals:
1. To elect directors to serve for the ensuing year and until their
successors are elected;
2. To approve certain amendments to the Identix Incorporated Equity
Incentive Plan described in the accompanying Proxy Statement;
3. To approve an amendment to the Company's Articles of Incorporation to
increase the authorized number of shares of Common Stock from 30,000,000
to 50,000,000;
4. To ratify the appointment of Price Waterhouse LLP as independent
accountants of the Company for the fiscal year ending June 30, 1997; and
5. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only shareholders of record at the close of business on September 2, 1996
are entitled to notice of and to vote at the meeting.
All shareholders are cordially invited to attend the meeting in person.
However, to assure your representation at the meeting, you are urged to mark,
sign, date, and return the enclosed Proxy as promptly as possible in the postage
prepaid envelope enclosed for that purpose. Any shareholder attending the
meeting may vote in person even if he or she returned a proxy.
Sincerely,
JAMES P. SCULLION
Secretary
Sunnyvale, California
October 1, 1996
<PAGE> 3
IDENTIX INCORPORATED
------------------------
PROXY STATEMENT
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed Proxy is solicited on behalf of the Board of Directors of
Identix Incorporated (the "Company") for use at the Annual Meeting of
Shareholders (the "Annual Meeting") to be held on Wednesday, October 30, 1996 at
2:00 p.m., local time, or at any adjournment thereof, for the purposes set forth
herein and in an accompanying Notice of Annual Meeting of Shareholders. The
Annual Meeting will be held at the Company's principal executive offices. The
Company's principal executive offices are located at 510 North Pastoria Avenue,
Sunnyvale, California 94086. The Company's telephone number is (408) 731-2000.
These proxy solicitation materials were mailed on or about October 1, 1996
to all shareholders entitled to vote at the Annual Meeting.
RECORD DATE AND SHARES OUTSTANDING
Shareholders of record at the close of business on September 2, 1996 (the
"Record Date") are entitled to notice of and to vote at the meeting. At the
Record Date, 24,323,937 shares of the Company's Common Stock were issued and
outstanding.
REVOCABILITY OF PROXIES
Any proxy given pursuant to this solicitation may be revoked by the person
giving it any time before its use by delivering to the Secretary of the Company
a written notice of revocation or a duly executed proxy bearing a later date or
by attending the Annual Meeting and voting in person.
VOTING AND SOLICITATION
Except in the election of directors, each share of Common Stock has one
vote. Every shareholder voting in the election of directors may cumulate such
shareholder's votes and give one candidate a number of votes equal to the number
of directors to be elected multiplied by the number of shares held on the record
date, or distribute the shareholder's votes among the candidates at the
shareholder's discretion. However, no shareholder shall be entitled to cumulate
votes unless the candidate's name has been placed in nomination prior to the
voting and the shareholder or any other shareholder has given notice at the
Annual Meeting prior to the voting of the intention to cumulate the
shareholder's votes.
Abstentions and broker non-votes will be counted towards the tabulations of
votes cast on proposals presented to the shareholders and will have the same
effect as negative votes.
The cost of this solicitation will be borne by the Company. The Company may
reimburse brokerage firms and other persons representing beneficial owners for
their expenses in forwarding solicitation materials to such beneficial owners.
Proxies may also be solicited by certain of the Company's directors, officers,
and regular employees without additional compensation, personally or by
telephone or telegraph.
DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS FOR 1997 ANNUAL MEETING
Proposals of shareholders of the Company which are intended to be presented
by such shareholders at the Company's 1997 Annual Meeting must be received by
the Company no later than June 3, 1997 in order to be eligible for inclusion in
the proxy statement and form of proxy relating to that meeting.
<PAGE> 4
1. ELECTION OF DIRECTORS
A board of seven directors is to be elected at the Annual Meeting. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for the Company's seven nominees named below, all of whom are presently
directors of the Company. In the event that any nominee shall become
unavailable, the proxy holders will vote the proxies at their discretion for a
substitute or additional nominee. In the event that additional persons are
nominated for election as directors, the proxy holders intend to vote all
proxies received by them in such a manner in accordance with cumulative voting
as will assure the election of as many of the nominees listed below as possible
and, in such event, the specific nominees to be voted for will be determined by
the proxy holders. It is expected that all nominees will be able and willing to
serve as directors. The term of office of each person elected as a director will
continue until the next Annual Meeting of Shareholders or until his successor
has been elected and qualified.
The names of the nominees and certain information about them are set forth
below:
<TABLE>
<CAPTION>
NAME OF NOMINEE AGE PRINCIPAL OCCUPATION DIRECTOR SINCE
------------------------ --- --------------------------------------------- --------------
<S> <C> <C> <C>
Randall C. Fowler....... 57 Chairman, President, and Chief Executive 1982
Officer of the Company
Patrick H. Morton....... 56 Chairman of the Board of Directors of 1985
QuadRep, Inc.
Randall Hawks, Jr....... 45 President and Chief Executive Officer of WHEB 1988
Systems, Inc.
Fred U. Sutter.......... 68 President of the Swiss Management Association 1988
Larry J. Wells.......... 53 General Partner of the management company for 1992
Sundance Venture Partners, L.P.
Harrison N. Walther..... 59 President and Chief Executive Officer of 1995
ANADAC, Inc.
Ed Zschau............... 56 Senior Lecturer of Business Administration, 1995
Harvard Business School, Harvard University
</TABLE>
Except as set forth below, each of the nominees has been engaged in the
principal occupation described above during the past five years. There is no
family relationship between any director or executive officer of the Company.
Randall C. Fowler, Chairman of the Board, President, and Chief Executive
Officer of the Company, positions he has held since 1982, is also founder of the
Company.
Patrick H. Morton has been a director of the Company since 1985. Mr. Morton
is Chairman of the Board of Directors and co-founder of QuadRep, Inc., a
manufacturers' representative company. He held the position of President of
QuadRep, Inc. from 1981 through 1990 and has been Chairman since 1991.
Randall Hawks, Jr. has been a director of the Company since 1988. Mr. Hawks
is currently President and Chief Executive Officer at WHEB Systems, Inc. From
1994 to 1995, Mr. Hawks was Executive Vice President of AT&T Paradyne, a
communications equipment subsidiary of AT&T. Prior to joining AT&T Paradyne, Mr.
Hawks was Executive Vice President of the Company from 1989 to November 1993 and
was Vice President of Marketing from 1985 to 1989.
Fred U. Sutter has been a director of the Company since 1988. Mr. Sutter is
currently President of the Swiss Management Association. Until January 1996, Mr.
Sutter was Chairman, Chief Executive Officer and President of Ascom Enterprise
Network, Inc., of Ascom Holding, Inc., a United States subsidiary of Ascom
Holding AG, the parent company of a group of telecommunication companies and
service automation providers. From December 1993 to July 1995, Mr. Sutter was
the Chief Executive Officer and President of Ascom Holding AG. From January 1991
to August 1993, he was the Deputy President of Ascom Holding AG. From January
1987 to December 1990, he was President of Ascom Hasler AG. Ascom Hasler AG is a
Swiss telecommunications company and is a part of Ascom Holding AG.
Larry J. Wells has been a director of the Company since 1992. Since 1989,
Mr. Wells has been a general partner of Anderson and Wells Company, the
management company for Sundance Venture Partners, L.P.
2
<PAGE> 5
Prior to his affiliation with Anderson and Wells Company, Mr. Wells held similar
positions with Inco Venture Capital from 1988 to 1989 and Citicorp Venture
Capital from 1983 to 1987.
Harrison N. Walther has been a director of the Company since February 1995.
Mr. Walther is the President and Chief Executive Officer of ANADAC, Inc.
("ANADAC"), Mr. Walther joined ANADAC in 1982. He served as Vice President of
ANADAC from 1982 through 1984 and Executive Vice President from 1984 through
1985 before assuming the duties of President in 1986.
Ed Zschau was appointed a director of the Company in December 1995.
Currently, Mr. Zschau is a Senior Lecturer of Business Administration at Harvard
Business School, Harvard University. Mr. Zschau served for two years as General
Manager of the IBM Storage Systems Divisions from 1993 to 1995. From 1988
through 1992 Mr. Zschau was Chairman of the Board and Chief Executive Officer of
Genstar Corporation, a developer of rigid disk media and thin-film magnetic
recording heads. Mr. Zschau is a former United States congressman.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
The Company has reviewed all Forms 3, 4 and 5 filed with respect to fiscal
year 1996 as well as certain representations made to the Company, and based
thereon has determined that for fiscal year 1996, Randall C. Fowler, Chairman,
President, and Chief Executive Officer, James P. Scullion, Executive Vice
President and Chief Financial Officer, Daniel F. Maase, Vice President,
Engineering, and Harrison N. Walther, President and Chief Executive Officer of
ANADAC each failed to file in a timely manner one report required by Section
16(a) of the Exchange Act covering one, two, three and four transactions,
respectively. Each officer identified filed a report for his respective
transactions on June 17, 1996.
BOARD MEETINGS AND COMMITTEES
The Board of Directors of the Company held a total of four meetings during
fiscal year 1996.
The Compensation Committee held one meetings during fiscal year 1996.
Messrs. Morton, Wells and Hawks are currently the members of the Compensation
Committee. The Compensation Committee reviews and approves the Company's
executive officer compensation policy and administers the Company's employee
option plans.
The Audit Committee held three meetings during fiscal year 1996. Messrs.
Morton, Wells, and Hawks are currently the members of the Audit Committee.
William E. Colby, formerly a member of the Board of Directors, was a member of
the Audit Committee during fiscal year 1996. Mr. Colby died in April 1996. The
Audit Committee recommends engagement of the Company's independent auditors and
is primarily responsible for approving the services performed by the Company's
independent auditors and for reviewing and evaluating the Company's accounting
principles and its systems of internal controls.
The Board of Directors does not have a standing Nominating Committee nor
any committee performing such function.
During fiscal year 1996, no director attended fewer than 75% of the
aggregate of all meetings of the Board of Directors and committees, if any, upon
which such director served except Mr. Sutter who attended 25% of the Board of
Directors meetings.
DIRECTOR COMPENSATION
In fiscal year 1996, members of the Board of Directors received no cash
compensation for serving on the Board of Directors, but received options granted
under the Identix Incorporated Nonemployee Directors Stock Option Plan
("Directors Plan").
Under the Directors Plan, each nonemployee director of the Company, upon
such director's first election to the Board, is entitled to receive an automatic
nondiscretionary grant of (i) a nonqualified stock option ("NQO") to purchase
10,000 shares of Common Stock if less than six months have elapsed since the
last annual meeting of shareholders or (ii) an NQO to purchase 5,000 shares of
Common Stock if more than six
3
<PAGE> 6
months have elapsed since the last annual meeting of the shareholders. In
addition, on the date of the first meeting of the Board following the annual
meeting of the shareholders of the Company, each eligible director is entitled
to receive an NQO to purchase 10,000 shares of Common Stock.
The exercise price of the NQOs granted under the Directors Plan is equal to
the fair market value of such shares on the date of grant. The NQOs become
exercisable with respect to one fourth of the number of shares covered by such
NQO for each three month period which elapses after the date of grant, so that
such NQO will be fully exercisable on the first anniversary of the date such NQO
was granted.
Beginning August 1, 1996, the nonemployee directors of the Company receive
$1,000 for each Board meeting attended up to a maximum of $4,000 annually plus
expenses incurred in traveling to the meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of July 31, 1996 by (i) each person
who is known by the Company to own beneficially more than 5% of the outstanding
shares of Common Stock, (ii) by each of the Company's directors and each of the
Company's executive officers identified in the Summary Compensation Table and
(iii) by all directors and officers as a group. Except as otherwise indicated,
the Company believes that the beneficial owners of the securities listed below,
based on information furnished by such owners, have sole investment and voting
power with respect to the Common Stock shown as being beneficially owned by
them.
<TABLE>
<CAPTION>
DIRECTORS, OFFICERS AND NUMBER OF SHARES PERCENTAGE
5% SHAREHOLDERS BENEFICIALLY OWNED BENEFICIALLY OWNED(1)
------------------------------------------------ ------------------ ---------------------
<S> <C> <C>
Ascom USA Inc. ................................. 5,418,224(2) 22.28%
9 East Ninth Steet, #1
New York, NY 10003
Randall C. Fowler............................... 6,701,973(3) 27.56%
510 N. Pastoria Avenue
Sunnyvale, CA 94086
Patrick H. Morton............................... 118,320(4) *
Randall Hawks, Jr............................... 80,000(5) *
Fred U. Sutter.................................. 80,000(6) *
Larry J. Wells.................................. 45,575(7) *
Harrison N. Walther............................. 287,769(8) 1.18%
James P. Scullion............................... 143,957(9) *
Daniel F. Maase................................. 103,166(10) *
Ed Zschau....................................... 7,500(11) *
All directors and officers as a group (11
persons)...................................... 7,584,927(3)(12) 31.19%
</TABLE>
- ---------------
* Less than one percent.
(1) Applicable percentage of ownership is based on 24,320,464 shares of Common
Stock outstanding as of July 31, 1996. Shares of Common Stock subject to
outstanding options or warrants currently exercisable or exercisable within
60 days after July 31, 1996 are deemed outstanding for computing the
percentage ownership of the person holding such options or warrants but are
not deemed outstanding for computing the percentage ownership of any other
person.
(2) All of the Ascom USA Inc. beneficially owned shares are held in a voting
trust for which Mr. Randall C. Fowler, the Chairman of the Board,
President, and Chief Executive Officer of the Company, is temporarily
serving as the trustee until a new trustee is appointed. The trustee of the
voting trust votes all the shares held in the voting trust.
(3) Includes 5,418,224 shares held by Ascom USA Inc. in a voting trust for
which Mr. Fowler is currently serving as voting trustee until a replacement
is appointed (See Footnote 2). Also includes 249,167 shares issuable upon
exercise of options.
4
<PAGE> 7
(4) Includes 60,000 shares issuable upon exercise of a warrant and 20,000
shares issuable upon exercise of options.
(5) Includes 80,000 shares issuable upon exercise of options.
(6) Includes 60,000 shares issuable upon exercise of a warrant and 20,000
shares issuable upon exercise of options.
(7) Includes 25,575 shares issuable upon the exercise of a warrant. Such
warrant is held by Sundance Venture Partners, L.P. of which Anderson and
Wells Company is a general partner. Mr. Wells is a general partner of
Anderson and Wells Company. Also includes 20,000 shares issuable upon
exercise of options held by Mr. Wells.
(8) Includes 53,416 shares issuable upon exercise of options.
(9) Includes 143,567 shares issuable upon exercise of options.
(10) Includes 103,166 shares issuable upon exercise of options.
(11) Includes 7,500 shares issuable upon exercise of options.
(12) Includes 859,058 shares issuable upon exercise of warrants and options.
EXECUTIVE COMPENSATION
The table set forth below provides, with respect to Messrs. Fowler,
Walther, Scullion, and Maase, certain compensation information for each of the
last three fiscal years. Messrs. Fowler, Walther, Scullion, and Maase are the
only executive officers of the Company whose annual salary and bonus exceeded
$100,000 in the year ended June 30, 1996.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM
NAME AND --------------------- COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#)(1)
- ------------------------------------------------ ----- -------- -------- -------------
<S> <C> <C> <C> <C>
Randall C. Fowler............................... 1996 $168,000 $ -- 45,000
Chairman, President and Chief Executive
Officer 1995 148,446 12,500 --
1994 132,825 -- 60,000(2)
Harrison N. Walther............................. 1996 $146,910 $110,448 20,000
President and Chief Executive Officer of 1995 146,910 84,113 --
ANADAC, Inc. 1994 146,910 4,803 --
James P. Scullion............................... 1996 $126,000 $ -- 45,000
Executive Vice President and Chief 1995 110,662 17,500 --
Financial Officer 1994 96,000 -- 30,000
Daniel F. Maase................................. 1996 $126,000 $ 5,000 25,000
Vice President, Engineering 1995 111,482 -- --
1994 105,000 -- --
</TABLE>
- ---------------
(1) All figures in this column reflect options to purchase Common Stock.
(2) Represents compensation for being a member of the Board of Directors.
5
<PAGE> 8
1996 OPTION GRANTS TABLE
The following table sets forth stock options granted to the executive
officers identified in the Summary Compensation Table during the fiscal year
1996 under the Company's 1995 Equity Incentive Plan. Since inception, the
Company has not granted any stock appreciation rights.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL
REALIZABLE VALUE AT
INDIVIDUAL GRANTS ASSUMED ANNUAL
% OF TOTAL RATES OF STOCK
OPTIONS GRANTED(#) EXERCISE PRICE APPRECIATION
TO EMPLOYEES PRICE FOR OPTION(1)
OPTIONS IN FISCAL YEAR PER EXPIRATION -------------------
NAME GRANTED 1996 SHARE(4) DATE 5% 10%
- ---------------------------- ------ ------------------ -------- ---------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Randall C. Fowler........... 25,000(2) 4% $ 7.06 8/1/2005 $111,039 $281,395
20,000(3) 3% 7.06 8/1/2005 88,831 225,116
Harrison N. Walther......... 20,000(3) 3% 7.06 8/1/2005 88,831 225,116
James P. Scullion........... 25,000(2) 4% 7.06 8/1/2005 111,039 281,395
20,000(3) 3% 7.06 8/1/2005 88,831 225,116
Daniel F. Maase............. 25,000(2) 4% 7.06 8/1/2005 111,039 281,395
</TABLE>
- ---------------
(1) Potential realizable value is based on an assumption that the market price
of the stock appreciates at the stated rate, compounded annually, from the
date of grant until the end of the ten year option term. These values are
calculated based on the requirements promulgated by the Securities and
Exchange Commission and do not reflect the Company's estimated future stock
price appreciation.
(2) Options are incentive stock options which vest ratably over sixty months
with cliff vesting of all options if the Company achieves certain fiscal
1996 financial goals set by the Compensation Committee. These options became
fully vested as a result of meeting these goals. These options have a term
of ten years. These options were granted on August 2, 1995.
(3) Options are incentive stock options which vest to the extent of one fourth
for each three month period which elapses after grant date. These options
have a term of ten years. These options were granted on August 2, 1995.
(4) Exercise price is the fair market value on the date of grant.
6
<PAGE> 9
1996 OPTION EXERCISES AND YEAR-END VALUE TABLE
The following table sets forth stock options exercised by the executive
officers identified in the Summary Compensation Table during fiscal year 1996,
and the number and value of all unexercised options at fiscal year end. The
value of "in-the-money" options refers to options having an exercise price which
is less than the market price of the Company's Common Stock on June 30, 1996.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FISCAL YEAR END FISCAL YEAR END(1)
SHARES --------------- ------------------
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($)(1) UNEXERCISABLE UNEXERCISABLE
- ----------------------------------- ----------- -------------- --------------- ------------------
<S> <C> <C> <C> <C>
Randall C. Fowler.................. -- $ -- 241,667/ 3,333 $2,721,257/ 25,206
Harrison N. Walther................ 80,902 763,172 46,000/14,000 474,374/151,876
James P. Scullion.................. 45,000 547,012 134,067/ 9,083 1,422,402/ 94,502
Daniel F. Maase.................... 51,267 690,496 100,433/ 1,300 1,115,688/ 15,763
</TABLE>
- ---------------
(1) Value realized is determined by multiplying the exercised shares by the
difference between the market close price on the date of exercise and the
stated exercise price.
(2) Represents market value of the Company's Common Stock at fiscal year end
less the exercise price.
The Company did not make any awards during the fiscal year ended June 30,
1996 to any of the executive officers named in the Summary Compensation Table
under any long-term incentive plan providing compensation intended for
performance to occur over a period longer than one fiscal year.
AGREEMENTS WITH EXECUTIVE OFFICER
As of June 30, 1996, Mr. Walther, a director of the Company and President
and Chief Executive Officer of ANADAC, was indebted to ANADAC in the amount of
$109,921 for premium payments made on his behalf for a split dollar life
insurance policy. Such indebtedness is represented by non-interest-bearing
notes, and will be paid with the proceeds from the policy or, in the event the
policy is canceled or terminated, with the policy's cash surrender value. ANADAC
will continue to make such premium payments as a loan to Mr. Walther in an
amount equal to approximately $12,500 per year. Mr. Walther is also indebted to
ANADAC in the principal amount of $44,094 for a loan made to Mr. Walther in July
1989. This loan bears interest at the rate of 7.5% per annum. Interest is
payable monthly and principal is payable upon demand.
REPORT OF THE BOARD OF DIRECTORS COMPENSATION COMMITTEE
Notwithstanding anything to the contrary set forth in any of the Company's
pervious or future filings under the Securities Act of 1933 or the Securities
Exchange Act of 1934 (the "Exchange Act") that might incorporate this Proxy
Statement or future filings with the Securities and Exchange Commission, in
whole or in part, the following report and the Performance Graph which follows
shall not be deemed to be incorporated by reference into any such filing.
The Compensation Committee is responsible for establishing and
administering the policies which govern both annual compensation and stock
ownership programs for the Chief Executive Officer and certain other executive
officers. Each year, salaries are determined and awards are made, if warranted,
under the Company's stock option plans.
The Compensation Committee annually evaluates the Company's corporate
performance, and its executive compensation and incentive programs compared with
our own industry and with a broader group of
7
<PAGE> 10
companies. In determining the Chief Executive Officer's compensation for fiscal
year 1996, the Compensation Committee considered the compensation paid by the
Company's direct competitors, a group of peer companies, and the level of
revenues for the Company for the fiscal year.
The Company's compensation programs are designed to reward executives for
long-term strategic management, to align the interests of the executive officers
with the interests of the Company's shareholders and to attract and retain
highly talented and productive executives, and are leveraged on the basis of
performance in terms of both cash compensation and incentive plans, paying more
with good performance and less when it is below standard.
During fiscal 1996, the Chief Executive Officer and the other executive
officers received a 5% salary increase and incentive stock options. Mr. Walther
received performance bonuses pursuant to an incentive bonus agreement. Mr. Maase
received a bonus during fiscal 1996 for meeting certain performance objectives.
During fiscal 1997, the Compensation Committee will continue to carefully
consider executive compensation in relation to the Company's performance
compared to that of industry performance levels.
Larry J. Wells
Patrick H. Morton
Randall Hawks, Jr.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Randall Hawks Jr., a member of the Compensation Committee of the Company's
Board of Directors during fiscal year 1996, formerly was Executive Vice
President of the Company from 1989 to November 1993 and was Vice President of
Marketing from 1985 to 1989.
8
<PAGE> 11
IDENTIX STOCK PERFORMANCE GRAPH
The following graph compares the cumulative total shareholder return on the
Common Stock of the Company from July 1, 1991 to June 30, 1996 with cumulative
total return on the Russell 2000 Index and a Peer Group (Digital Biometrics,
Inc. and National Registry Inc.) over the same period (assuming the investment
of $100 in the Company's Common Stock and in the Index and the Peer Group on
July 1, 1991, and reinvestment of all dividends).
COMPARATIVE SIX-YEAR TOTAL RETURNS
IDENTIX, PEER GROUP, RUSSELL 2000
(PERFORMANCE RESULTS THROUGH 6/30/96)
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) IDENTIX PEER GROUP RUSSELL 2000
<S> <C> <C> <C>
1991 100 100 100
1992 73.33 105.63 114.54
1993 51.67 184.00 144.27
1994 95.00 153.14 150.62
1995 168.33 114.30 180.86
1996 390.00 89.76 224.28
</TABLE>
CERTAIN TRANSACTIONS
At July 31, 1996, Ascom USA Inc. ("Ascom") owned approximately 22.3% of the
outstanding Common Stock of the Company. The Company granted Ascom registration
rights with respect to the Common Stock acquired from the Company and preemptive
rights to participate in any offering of certain securities of the Company.
Ascom's preemptive rights allow it to purchase a sufficient number of shares of
Common Stock to preserve its ownership interest in the Company at a purchase
price per share equal to the lower of (a) the weighted average price of the
shares sold in the dilutive event or (b) the average closing price of the Common
Stock for the 20 trading days immediately preceding the dilutive event. The
presence of Ascom's registration and preemptive rights may adversely affect the
terms on which the Company could obtain additional financing. On September 2,
1994, the Company entered into a Voting Trust Agreement (the "Agreement") with
Ascom whereby Ascom deposited all of its shares of the Company's Common Stock
held by Ascom totaling 5,418,224 (the "Voting Stock") into a voting trust. The
trustee of the voting trust is on the Company's Board of Directors and has
voting control of the Voting Stock. The term of the Agreement is 10 years. In
consideration for Ascom entering into the Agreement, the Company granted Ascom
certain additional registration rights with respect to the Voting Stock,
modified certain contractual transfer restrictions with respect to the Voting
Stock, and granted Ascom price protections regarding certain sales of Voting
Stock.
9
<PAGE> 12
2. APPROVAL OF AMENDMENTS TO THE IDENTIX INCORPORATED EQUITY
INCENTIVE PLAN
BACKGROUND
The Board has approved, subject to shareholder approval, two amendments to
the Identix Incorporated Equity Incentive Plan (the "Incentive Plan") as
described below.
DESCRIPTION OF THE PROPOSAL
Currently, the Incentive Plan provides that a total of 1,000,000 shares of
Common Stock may be issued thereunder. As of July 31, 1996, there were 72,967
shares that were currently unreserved and available for option grants under the
Incentive Plan. The proposed amendments to the Incentive Plan (i) increase the
number of shares available for issuance under the Incentive Plan by 250,000
shares to a total of 1,250,000 shares and (ii) allow nonemployee directors of
the Company to participate under the Incentive Plan. The Company believes that
the proposed increase in the number of shares available for grant is necessary
in order to ensure that there will be a sufficient reserve of shares to permit
the grant of further options to existing and new employees of and consultants to
the Company. The proposed inclusion of nonemployee directors is intended to
allow the Company to take advantage of the flexibility afforded by recent
amendments to the rules under Section 16 of the Securities and Exchange Act of
1934, as amended.
The following table shows the number of shares awarded to the executive
officers and the identified groups under the Incentive Plan in fiscal 1996. All
options were granted at fair market value as of the date of grant.
<TABLE>
<CAPTION>
NUMBER
NUMBER AND POSITION OF SHARES(1)
- --------------------------------------------------------------------------------- ------------
<S> <C>
Randall C. Fowler................................................................ 45,000
Chairman, President and Chief Executive Officer
Harrison N. Walther.............................................................. 20,000
President and Chief Executive Officer of ANADAC, Inc.
James P. Scullion................................................................ 45,000
Executive Vice President, Chief Financial Officer and Secretary
Daniel F. Maase.................................................................. 25,000
Vice President, Engineering
Edward S. Murrer................................................................. 75,000
Vice President, Sales and Marketing
All executive officers as a group................................................ 210,000
All directors who are not executive officers as a group.......................... -0-
All employees and consultants (other than executive officers) as a group......... 376,000
</TABLE>
- ---------------
(1) The following option grants were made in July 1996 at fair market value as
of the date of grant to the executive officers and identified groups under
the Incentive Plan: Randall C. Fowler, 50,000 shares; Harrison N. Walther,
25,000 shares; James P. Scullion, 50,000 shares; Daniel F. Maase, 25,000
shares; all executive officers as a group, 165,000 shares; all directors who
are not executive officers as a group, no shares; and all employees and
consultants (other than executive officers) as a group, 189,500 shares.
DESCRIPTION OF THE INCENTIVE PLAN
The Incentive Plan is intended to strengthen the Company by providing
selected eligible key employees of, and consultants to, the Company an
opportunity to participate in the Company's future by offering them an
opportunity to acquire stock in the Company so as to retain, attract and
motivate them. Administration of the Incentive Plan may either be by the Board
or a Committee of the Board (in either case, the "Committee"). The Committee may
select key employees, including executive officers, or consultants to receive
awards under the Incentive Plan and has broad discretion to determine the amount
and type of awards and terms and conditions of the awards. However, the
Committee may not grant, in any one fiscal year, awards covering more
10
<PAGE> 13
than 200,000 shares of Common Stock to any executive officer whose compensation
is required to be disclosed under Item 402 of Regulation S-K. Individual grants
will generally be based on a person's present and potential contribution to the
Company. As currently in effect, nonemployee directors and members of the
Committee are not eligible to participate in the Incentive Plan. As of June 30,
1996, the Company had approximately 290 employees eligible to participate in the
Incentive Plan. Since the grant of awards is based upon a determination made by
the Committee after a consideration of various factors, the Company currently
cannot determine the nature and amount of any awards that will be granted in the
future to any eligible individual or group of individuals.
Awards may be granted in the form of incentive stock options ("ISOs")
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended ("the "Code"), NQOs (each ISO or NQO, an "Option," and collectively,
"Options"), restricted stock ("Restricted Stock"), stock purchase rights ("Stock
Purchase Rights") or performance shares ("Performance Shares"). Any award may be
granted either alone or in addition to other awards granted under the Incentive
Plan. The Committee may condition the grant of the award upon the attainment of
specified Company, group or division performance goals or other criteria, which
need not be the same for all participants. No award may be granted under the
Incentive Plan on or after July 5, 2005, but outstanding awards may extend
beyond that date.
Options. Options granted under the Incentive Plan may be ISOs or NQOs. The
exercise price of ISOs may not be less than the fair market value of the shares
subject to the Option on the date of grant. The exercise price of NQOs must be
at least 85 percent of the fair market value of the shares subject to the Option
on the date of grant. The term of any ISO granted under the plan may not exceed
ten years and the term of any NQO may not exceed fifteen years. Certain other
limitations are also applicable to ISOs in order to take advantage of the
favorable tax treatment that may be available for ISOs.
Restricted Stock. Restricted Stock awards consist of non-transferable
shares of Common Stock of the Company. The Committee may provide for the lapse
of the transfer restrictions over a period of not more than ten years, or may
accelerate or waive such restrictions, in whole or in part, based on service,
performance or other criteria determined by the Committee.
Stock Purchase Rights. Stock Purchase Rights consist of a grant to purchase
Common Stock at a purchase price of not less than 85 percent of the fair market
value of the Common Stock on the grant date. Stock Purchase Rights are generally
exercisable for a period of up to 30 days after the grant date.
Performance Shares. Performance Shares are shares of Common Stock issuable
upon the attainment of performance criteria. At the time of a grant, the
Committee will determine the number of shares of Common Stock to be awarded at
the end of the performance period if and to the extent that the specified
performance targets are met. The consideration payable by a participant with
respect to a Performance Share award will be determined by the Committee but may
not exceed 50 percent of the fair market value of the Common Stock on the date
of grant. The Committee will determine the performance period, the performance
objectives to be used in granting the awards and the extent to which awards have
been earned. Performance periods may overlap, and participants may be awarded
Performance Shares having different performance criteria. Performance Share
awards may be payable in cash or stock, at the discretion of the Committee, and
may bear interest or earn dividends.
The consideration payable for, upon exercise of, or for tax payable in
connection with, an award may be paid in cash, by promissory note of the
participant, or by delivery of other property, including securities of the
Company, as authorized by the Committee. The Company generally will not receive
any consideration upon the grant of any awards, although the Incentive Plan
provides that consideration may be payable with respect to the grant of
Performance Shares. Awards generally may be exercised at any time within three
months after a participant's employment by, or consulting relationship with, the
Company terminates (but, only to the extent exercisable or payable at the time
of termination). If termination is due to the participant's death, retirement or
disability, the award may be exercised for two years thereafter. Shares issued
under an award may be subject to a right of repurchase by the Company. No award
shall be assignable or otherwise transferable by a participant other than by
will or by the laws of descent and distribution.
11
<PAGE> 14
The Committee may adjust the performance goals and measurements applicable
to awards. The Committee also may waive in whole or in part any or all
restrictions, conditions, vesting or forfeiture with respect to any award
granted under the Incentive Plan.
The Board may amend, alter or discontinue the Incentive Plan or any award
at any time, except that the consent of a participant is required if the
participant's rights under an outstanding award would be impaired. In addition,
to the extent required for the Incentive Plan to satisfy the conditions of Rule
16b-3 under the Exchange Act or, with respect to provisions solely as they
relate to ISOs, to the extent required for the Incentive Plan to comply with
Section 422 of the Code, the shareholders of the Company must approve any
amendment, alteration or discontinuance of the Incentive Plan that would (i)
increase the total number of shares reserved under the Incentive Plan, (ii)
change the minimum price terms for Option exercise, (iii) change the class of
employees and consultants eligible to participate in the Incentive Plan, (iv)
extend the maximum option exercise period, or (v) materially increase the
benefits accruing to participants under the Incentive Plan.
The Incentive Plan constitutes an unfunded plan for incentive and deferred
compensation. The Committee may authorize the creation of trusts or arrangements
to meet the obligations under the Incentive Plan to deliver stock or make
payments.
In the event of a "change in control" of the Company, as defined in the
Incentive Plan, the Board may, subject to certain limitations, accelerate the
vesting provisions of awards or may cash out the awards. A "change in control"
is defined to include the acquisition of 20 percent or more of the voting power
of the Company's outstanding stock, a proxy solicitation for one or more
directors without support of the then current Board, a dissolution or
liquidation of the Company and certain asset sales, mergers or reorganizations
or other changes in ownership of the Company's assets or stock.
FEDERAL INCOME TAX CONSEQUENCES
For a discussion of the federal income tax consequences of awards issued
pursuant to the Incentive Plan, see "Certain Federal Income Tax Consequences"
below.
PROPOSAL
Shareholders are being asked to approve the amendments to the Incentive
Plan. The affirmative vote of the holders of a majority of the outstanding
shares of the Common Stock of the Company represented and voting at the Annual
Meeting is required to adopt the amendments to the Incentive Plan.
BOARD RECOMMENDATION
The Board recommends a vote "FOR" approval of the proposal.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
THE FOLLOWING SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES IS BASED UPON
EXISTING STATUTES, REGULATIONS AND INTERPRETATIONS THEREOF. THE APPLICABLE RULES
ARE COMPLEX, AND INCOME TAX CONSEQUENCES MAY VARY DEPENDING UPON THE PARTICULAR
CIRCUMSTANCES OF EACH PLAN PARTICIPANT. THIS PROXY STATEMENT DESCRIBES FEDERAL
INCOME TAX CONSEQUENCES OF GENERAL APPLICABILITY, BUT DOES NOT PURPORT TO
DESCRIBE PARTICULAR CONSEQUENCES TO EACH INDIVIDUAL PLAN PARTICIPANT OR FOREIGN,
STATE OR LOCAL INCOME TAX CONSEQUENCES, WHICH MAY DIFFER FROM THE UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES.
12
<PAGE> 15
INCENTIVE STOCK OPTIONS
Awards; Exercise. ISOs are intended to constitute "incentive stock options"
within the meaning of Section 422 of the Code. ISOs may be granted only to
employees of the Company (including directors who are also employees). The
recipient of an Option (the "Optionee") does not recognize taxable income upon
either the grant or exercise of an ISO. However, the excess of the fair market
value of the shares purchased upon exercise over the Option exercise price (the
"Option Spread") is includable in the Optionee's "alternative minimum taxable
income" ("AMTI") for purposes of the alternative minimum tax ("AMT"). The Option
Spread is generally measured on the date of exercise and is includable in AMTI
in the year of exercise. Special rules regarding the time of AMTI inclusion may
apply for shares subject to a repurchase right or other "substantial risk of
forfeiture" (including, in the case of each person subject to the reporting
requirements of Section 16 of the Exchange Act, any limitations on resale of
shares imposed under Section 16(b) of the Exchange Act). In addition, when stock
is acquired subject to a "substantial risk of forfeiture", an Optionee's holding
period for purposes of determining whether any capital gain or loss on sale is
long-term will generally not begin until the restriction lapses or the Optionee
files an election under Section 83(b) of the Code (a "Section 83(b) Election").
Sale of Option Shares. If an Optionee holds the shares purchased under an
ISO for at least two years from the date the ISO was granted and for at least
one year from the date the ISO was exercised, any gain from a sale of the shares
other than to the Company should be taxable as capital gain. Under these
circumstances, the Company would not be entitled to a tax deduction at the time
the ISO was exercised or at the time the stock was sold. If an Optionee were to
dispose of stock acquired pursuant to an ISO before the end of the required
holding periods (a "Disqualifying Disposition"), the amount by which the market
value of the stock at the time the ISO was exercised exceeded the exercise price
(or, if less, the amount of gain realized on the sale) would be taxable as
ordinary income, and the Company would be entitled to a corresponding tax
deduction. Such income is subject to information reporting requirements and may
become subject to withholding. Gain from a Disqualifying Disposition in excess
of the amount required to be recognized as ordinary income is capital gain.
Optionees are required to notify the Company immediately prior to making a
Disqualifying Disposition. If stock is sold to the Company rather than to a
third party, the sale may not produce capital gain or loss. A sale of shares to
the Company will constitute a redemption of such shares, which could be taxable
as a dividend unless the redemption is "not essentially equivalent to a
dividend" within the meaning of the Code.
Exercise With Stock. If an Optionee pays for ISO shares with shares of the
Company acquired under an ISO or a qualified employee stock purchase plan
("statutory option stock"), the tender of shares is a Disqualifying Disposition
of the statutory option stock if the above described (or other applicable)
holding periods respecting those shares have not been satisfied. If the holding
periods with respect to the statutory option stock are satisfied, or the shares
were not acquired under a statutory stock option of the Company, then any
appreciation in value of the surrendered shares is not taxable upon surrender.
Special basis and holding period rules apply where previously-owned stock is
used to exercise an ISO.
NONQUALIFIED STOCK OPTIONS
Award; Exercise. An Optionee is not taxable upon the award of a NQO.
Federal income tax consequences upon exercise will depend upon whether the
shares thereby acquired are subject to a "substantial risk of forfeiture." If
the shares are not subject to a substantial risk of forfeiture, or if they are
so restricted and the Optionee files a Section 83(b) Election with respect to
the shares, the Optionee will have ordinary income at the time of exercise
measured by the Option Spread on the exercise date. The Optionee's tax basis in
the shares will be their fair market value on the date of exercise, and the
holding period for purposes of determining whether capital gain or loss upon
sale is long- or short-term also will begin on that date. If the shares are
subject to a substantial risk of forfeiture and no Section 83(b) Election is
filed, the Optionee will not be taxable upon exercise, but instead will have
ordinary income, on the date the restrictions lapse, in an amount equal to the
difference between the amount paid for the shares under the Option and their
fair market value as of the date of lapse; in addition, the Optionee's holding
period will begin on the date of lapse.
13
<PAGE> 16
Whether or not the shares are subject to a substantial risk of forfeiture,
the amount of ordinary income taxable to an Optionee who was an employee at the
time of grant constitutes "supplemental wages" subject to withholding of income
and employment taxes by the Company, and the Company receives a corresponding
income tax deduction.
Sale of Option Shares. Upon sale, other than to the Company, of shares
acquired under a NQO, an Optionee generally will recognize capital gain or loss
to the extent of the difference between the sale price and the Optionee's tax
basis in the shares, which will be long-term gain or loss if the employee's
holding period in the shares is more than one year. If stock is sold to the
Company rather than to a third party, the sale may not produce capital gain or
loss. A sale of shares to the Company will constitute a redemption of such
shares, which could be taxable as a dividend unless the redemption is "not
essentially equivalent to a dividend" within the meaning of the Code.
Exercise with Stock. If an Optionee tenders Common Stock (other than
statutory option stock -- see above) to pay all or part of the exercise price of
a NQO, the Optionee will not have a taxable gain or deductible loss on the
surrendered shares. Instead, shares acquired upon exercise that are equal in
value to the fair market value of the shares surrendered in payment are treated
as if they had been substituted for the surrendered shares, taking as their
basis and holding period the basis and holding period that the Optionee had in
the surrendered shares. The additional shares are treated as newly acquired with
a zero basis.
If the surrendered shares are statutory option stock as described above
under "Incentive Stock Options", with respect to which the applicable holding
period requirements for favorable income tax treatment have not expired, then
the newly acquired shares substituted for the statutory option shares should
remain subject to the federal income tax rules governing the surrendered shares,
but the surrender should not constitute a "disqualifying disposition" of the
surrendered stock.
RESTRICTED STOCK
Upon receipt of Restricted Stock, a recipient generally has taxable income
in the amount of the excess of the then fair market value of the Common Stock
over any consideration paid for the Common Stock (the "spread"). However, if the
Common Stock is subject to a "substantial risk of forfeiture" (described under
"Incentive Stock Options," above) and the recipient does not make a Section
83(b) Election, the recipient will have taxable income upon lapse of the risk of
forfeiture, rather than at receipt, in an amount equal to the spread on the date
of lapse. The taxable income constitutes supplemental wages subject to income
and employment tax withholding, and the Company receives a corresponding income
tax deduction. Supplemental wages are subject to federal income tax withholding
at a rate of 28 percent. The consequences upon sale or disposition of Restricted
Stock generally are the same as for Common Stock acquired under a NQO (see
above).
PERFORMANCE SHARES
Depending on the exact terms of an award of Performance Shares, the Award
could be treated for tax purposes in the same manner as a Restricted Stock
Award, i.e., as receipt of property, subject to restrictions.
STOCK PURCHASE RIGHTS
The tax treatment of Stock Purchase Rights is identical to that of NQOs, as
described above.
SPECIAL FEDERAL INCOME TAX CONSIDERATION DUE TO SHORT SWING PROFIT RULE
The potential liability of a person subject to Section 16 of the Exchange
Act to repay short-swing profits from the resale of shares acquired under a
Company plan constitutes a "substantial risk of forfeiture" within the meaning
of the above-described rules, which is treated as lapsing at such time as the
potential liability under Section 16 lapses. Persons subject to Section 16 who
would be required by Section 16 to repay profits from the immediate resale of
stock acquired under a Company plan should consider whether to file a Section
14
<PAGE> 17
83(b) Election at the time they acquire stock under a Company plan in order to
avoid deferral of the date that they are deemed to acquire shares for federal
income tax purposes.
3. APPROVAL OF AMENDMENT TO THE COMPANY'S ARTICLES OF INCORPORATION
The Board unanimously adopted, subject to shareholder approval, an
amendment to the Company's Articles of Incorporation (the "Amendment")
increasing the number of authorized shares of Common Stock from 30,000,000 to
50,000,000. The Board is requesting shareholder approval of the Amendment, a
copy of which is attached as Exhibit I to this proxy statement.
DESCRIPTION OF THE PROPOSAL
The Company's Articles of Incorporation currently authorize the issuance of
32,000,000 shares, of which 30,000,000 are authorized for issuance as Common
Stock and 2,000,000 are authorized for issuance as Preferred Stock. As of the
Record Date, the Company had 24,323,937 shares of Common Stock outstanding and
no shares of Preferred Stock outstanding. In addition, as of that date, the
Company had approximately (i) 2,056,000 shares of Common Stock reserved for
issuance under the Incentive Plan, the Company's 1995 Nonemployee Directors
Stock Option Plan, 1992 Employee Stock Option Plan, 1983 Incentive Stock Option
Plan and ANADAC's 1984 Incentive Stock Option Plan, and (ii) 171,000 shares of
Common Stock issuable upon exercise of outstanding warrants. If the Amendment is
approved, the Board intends to cause a certificate of amendment to the Articles
of Incorporation to be filed as soon as practicable after the date of the Annual
Meeting. Upon effectiveness of the Amendment, the Company will have
approximately 23,451,000 shares of Common Stock authorized but unreserved.
The Company has issued shares of Common Stock in connection with recent
acquisitions of related businesses and anticipates that it will continue to seek
to acquire assets and businesses which the Company believes will complement its
existing business and enhance its position as a leading provider of biometric
identification products and services. The Company also expects to sell
additional shares, as necessary, to finance operations and growth of the
Company. The Board considers it advisable to have additional authorized but
unissued shares of Common Stock available to allow the Company to act promptly
with respect to possible future acquisitions, as well as possible financings,
issuances under the Company's employee benefit plans and for other corporate
purposes approved by the Board. Having additional authorized shares of Common
Stock available for issuance in the future would give the Company greater
flexibility and allow shares of Common Stock to be issued without the expense or
delay of a shareholders' meeting, except as may be required by applicable laws
or regulations. The Company has no specific plans for issuance of additional
shares of Common Stock, other than shares currently reserved under option plans
and for exercise of outstanding warrants.
The Board is authorized to approve the issuance of additional Common Stock
at any time. Although the increase in the authorized number of shares is not
proposed for the purpose of any anti-takeover effect and the Company has no
present intention of issuing additional shares of Common Stock for that purpose,
the issuance of such shares may have an anti-takeover effect, depending upon the
identity of the purchasers, the number of shares issued and the then current
ownership of outstanding shares of the Company. The Listing Standards, Policies
and Requirements of the American Stock Exchange, Inc. generally require the
Company nevertheless to obtain the approval of the shareholders holding a
majority of the shares of the Company voting for the issuance of Common Stock
(or securities convertible or exercisable for Common Stock) pursuant to any
stock option or purchase plan in which officers or directors may participate,
resulting in a change in control of the Company, in connection with certain
acquisitions of the stock or assets of another corporation, or in private
placements for a price less than the greater of the book value or market value
involving 20% or more of the Common Stock outstanding before the issuance. In
addition, the issuance of additional shares of Common Stock would dilute
existing shareholders' equity interest in the Company. Except for Ascom USA
Inc., shareholders of the Company do not have rights to participate in offerings
of additional shares by the Company.
15
<PAGE> 18
PROPOSAL
Shareholders are being asked to approve the Amendment. The affirmative vote
of the holders of a majority of the outstanding shares of Common Stock entitled
to vote is required to approve the Amendment. Properly executed, unrevoked
proxies will be voted "FOR" the proposal unless a vote against the proposal or
abstention is specifically indicated in the proxy.
BOARD RECOMMENDATION
The Board recommends a vote "FOR" approval of the Amendment.
4. RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed Price Waterhouse LLP, independent
accountants, to audit the consolidated financial statements of the Company for
the fiscal year ending June 30, 1997, and recommends that shareholders vote
"FOR" ratification of such appointment. It is anticipated that a representative
of Price Waterhouse LLP will be present at the Annual Meeting with the
opportunity to make a statement and to respond to appropriate questions.
5. OTHER MATTERS
Management knows of no other matters to be submitted to the meeting. If any
other matters properly come before the meeting, it is the intention of the
Company that the persons named in the enclosed form of proxy vote the shares
they represent as Management may recommend.
Dated October 1, 1996
THE BOARD OF DIRECTORS
16
<PAGE> 19
EXHIBIT I
CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
IDENTIX INCORPORATED
Randall C. Fowler and James P. Scullion certify that:
1. They are the President and the Secretary, respectively, of Identix
Incorporated, a California corporation.
2. Article III of the Amended and Restated Articles of Incorporation of this
corporation is amended to read in its entirety as follows:
"This corporation is authorized to issue two classes of stock to be
designated, respectively, "Common Stock" and "Preferred Stock." The
number of shares of Common Stock this corporation is authorized to issue
is 50,000,000 and the total number of shares of Preferred Stock this
corporation is authorized to issue is 2,000,000. The Preferred Stock may
be issued from time to time in one or more series. The Board of
Directors is authorized to fix the number of shares of any series of
Preferred Stock and to determine or alter the rights, preferences,
privileges and restrictions granted to or imposed upon any wholly
unissued series of Preferred Stock and, within the limits and
restrictions stated in any resolution or resolutions of the Board of
Directors originally fixing the number of shares constituting any
series, to increase or decrease (but not below the number of shares of
any such series then outstanding) the number of shares of any such
series subsequent to the issue of shares of that series."
3. The foregoing amendment of the Amended and Restated Articles of Incorporation
has been duly approved by the Board of Directors of the corporation.
4. The foregoing amendment of Restated Articles of Incorporation has been duly
approved by the required vote of shareholders in accordance with Section 902
of the Corporations Code. The total number of outstanding shares of the
corporation on September 2, 1996, the record date for voting on the
amendment, was 24,323,937 shares of Common Stock. The number of shares voting
in favor of the amendment equalled or exceeded the vote required. The
percentage vote required was more than 50% of the outstanding shares of
Common Stock. There were no shares of Preferred Stock outstanding on the
record date.
We further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this certificate are true and correct
of our own knowledge.
Executed at Sunnyvale, California on October , 1996.
--------------------------------------
Randall C. Fowler, President
--------------------------------------
James P. Scullion, Secretary
<PAGE> 20
SIDE 1
- -------------------------------------------------------------------------------
PROXY FOR THE SHARES OF IDENTIX INCORPORATED,
A California Corporation
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Common Stock of Identix
Incorporated (the "Company") hereby revokes all previous proxies,
acknowledges receipt of the notice of the shareholders' meeting to
be held on October 30, 1996, and appoints Randall C. Fowler and
James P. Scullion, and each of them, as proxy of the undersigned
with power of substitution and revocation, to vote and otherwise
represent all the shares of the undersigned at said meeting and any
adjournment or postponement thereof with the same effect as if the
undersigned were present and voting the shares. The shares
represented by this proxy shall be voted as specified on the
reverse side. If no choice is indicated, the shares will be voted
FOR all proposals.
(Continued on other side)
SIDE 2
1. To elect directors:
Randall C. Fowler, Patrick H. Morton, Randall Hawks, Jr.,
Fred U. Sutter, Larry J. Wells, Harrison N. Walther,
Ed Zschau;
2. To approve certain amendments to the Identix Incorporated
Equity Incentive Plan described in the Company's Proxy
Statement;
3. To approve an amendment to the Company's Articles of
Incorporation to increase the authorized number of shares of
Common Stock from 30,000,000 to 50,000,000;
4. To ratify the appointment of Price Waterhouse LLP as
independent accountants of the Company for the fiscal year
ending June 30, 1997; and
5. To transact such other business as may properly come before the
meeting or any adjournment thereof.
Date and sign exactly as name(s) appear(s) on this proxy. If signing for
estates, trusts, corporations, or other entities, title or capacity should be
stated. If shares are held jointly, each holder should sign.
_______________________________ ________________________________
Signature Date
_______________________________ ________________________________
Signature Date
