<PAGE>
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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:
[_] 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 Section 240.14a-11(c) or Section 240.14a-12
Identix, Inc.
- --------------------------------------------------------------------------------
(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):
[X] No fee required.
[_] 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:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] 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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS OF
IDENTIX INCORPORATED
To Be Held On October 28, 1999
To The Stockholders:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Identix
Incorporated (the "Company") will be held on Thursday, October 28, 1999 at 2:00
p.m. at the Wyndham Garden Hotel, 1300 Chesapeake Terrace, Sunnyvale,
California 94089, for the purpose of considering and acting upon the following
proposals:
1. To elect seven directors to serve for the ensuing year and until their
successors are elected.
2. To ratify the appointment of PricewaterhouseCoopers LLP as independent
accountants of the Company for the fiscal year ending June 30, 2000.
3. 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 stockholders of record at the close of business on September 1, 1999
are entitled to notice of and to vote at the meeting. A list of the
stockholders of record will be available for inspection at the Company's
headquarters at 510 North Pastoria Drive, Sunnyvale, California during ordinary
business hours for the ten-day period prior to the Annual Meeting.
All stockholders are cordially invited to attend the meeting in person. In
order 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 stockholder attending the
meeting may vote in person even if he or she returned a Proxy.
Sincerely,
James P. Scullion
Secretary
Sunnyvale, California
September 28, 1999
<PAGE>
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
Stockholders (the "Annual Meeting") to be held on Thursday, October 28, 1999 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 Stockholders.
The Annual Meeting will be held at the Wyndham Garden Hotel, 1300 Chesapeake
Terrace, Sunnyvale, California 94089. 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 September 28,
1999 to all stockholders entitled to vote at the Annual Meeting.
Record Date and Shares Outstanding
Stockholders of record at the close of business on September 1, 1999 (the
"Record Date") are entitled to notice of and to vote at the meeting. At the
Record Date, 30,765,786 shares of the Company's common stock, $0.01 par value,
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
In order the constitute a quorum for the conduct of business, a majority of
the outstanding shares of common stock entitled to vote must be represented at
the annual meeting.
All shares represented by each properly executed, unrevoked proxy received
in time for the Annual Meeting will be voted in the manner specified in the
proxy. If the manner of voting is not specified in an executed proxy received
by the Company, the proxy will be voted for the election of the directors
listed in the proxy for election to the Board and for approval of the other
proposals described in this proxy statement.
Directors are elected by a plurality vote. The other matters submitted for
stockholder approval at this Annual Meeting will be decided by the affirmative
vote of a majority of shares present in person or represented by proxy and
entitled to vote on each matter. Abstentions with respect to any matter are
treated as shares present or represented and entitled to vote on that matter
and have the same effect as negative votes. If shares are not voted by the
institution who is the record holder of the shares, or if shares are not voted
in other circumstances in which proxy authority is effective or has been
withheld with respect to any matter, these non-voted shares are not deemed to
be present or represented for purposes of determining whether stockholder
approval of that a matter has been obtained.
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.
<PAGE>
Deadline for Receipt of Stockholder Proposals for Inclusion in the Company's
Proxy Statement for the 2000 Annual Meeting
Proposals of stockholders of the Company which are intended to be presented
by such stockholders at the Company's 2000 Annual Meeting must be received by
the Company no later than June 1, 2000 in order to be eligible for inclusion in
the proxy statement and form of proxy relating to that meeting.
2
<PAGE>
PROPOSAL 1.
ELECTION OF DIRECTORS
General
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. 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. 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 Stockholders or until his successor has been elected and qualified.
Vote Required
The seven nominees receiving the highest number of affirmative votes of the
shares entitled to be voted shall be elected as directors of the Company. Votes
withheld from any director are counted for purposes of determining the presence
or absence of a quorum but have no other legal effect under Delaware law.
Nominees
The names of the nominees and certain information about them are set forth
below:
<TABLE>
<CAPTION>
Name of Nominee Age Principal Occupation Director Since
--------------- --- -------------------- --------------
<C> <C> <S> <C>
Randall C. Fowler... 60 Chairman and Chief Executive Officer
of the Company 1982
Patrick H. Morton... 59 President of Kokusai Semiconductor
Equipment Corporation 1985
Randall Hawks, Jr... 47 Special Partner, Novus Ventures 1988
Fred U. Sutter...... 70 Retired President, Chairman and 1988
Chief Executive Officer of Ascom
Holdings, Inc.
Larry J. Wells...... 55 General Partner of the Management 1992
Company for Sundance Venture
Partners, L.P.
Charles W. Richion.. 63 Retired Vice President, Corporate
Development, of the Company 1998
James P. Scullion... 43 President, Chief Financial Officer
and Secretary of the Company 1998
</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 is Chairman of the Board of Directors and Chief Executive
Officer of the Company, positions he has held since founding the Company in
1982. Mr. Fowler was the President of the Company from 1982 until 1998. Mr.
Fowler is a Director of Ophthalmic Imaging Systems, a position he has held
since 1998.
Patrick H. Morton has been a director of the Company since 1985. Mr. Morton
is president of Kokusai Semiconductor Equipment Corporation. In addition, 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
has been a Special Partner of Novus Ventures since January 1999. From 1996 to
1998 Mr. Hawks was 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.
3
<PAGE>
Fred U. Sutter has been a director of the Company since 1988. Until January
1996, Mr. Sutter was Chairman, Chief Executive Officer and President 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. 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. Mr. Wells currently serves on the Board of Directors of Cellegy
Pharmaceuticals, Inc., a drug development company, Isonics Corporation, an
advanced materials and technology company, and Legacy Brands, Inc., a premium
food producer and distributor.
Charles W. Richion has been a director of the Company since 1998. Mr.
Richion served as Vice President, Biometric Security Division from January 1998
until July 1998 and Vice President, Corporate Development, of the Company from
June 1997 to January 1998. Mr. Richion is a director of Buy.Com. Prior to
joining the Company, Mr. Richion worked at Hewlett-Packard Company from 1965
through 1996 serving in a variety of functions. His most recent positions
included Vice President and Director of U.S. Sales operations and building the
Global Partners program.
James P. Scullion was appointed President of Identix in April 1999. He was
previously Executive Vice President since July 1996 and Vice President, Finance
since 1990. He has been a Director of the Company since 1998. He is Chief
Financial Officer of the Company, a position he has held since 1990. From 1986
to 1990, he was Vice President, Finance and Chief Financial Officer at
DataTrak, Inc., a manufacturer of security access systems.
Compliance with Section 16(a) of the Securities Exchange Act of 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's officers, directors and persons who own more than 10% of a
registered class of the Company's equity securities, to file reports of
ownership on Form 3 and changes in ownership on Form 4 or Form 5 with the
Securities and Exchange Commission ("SEC"). Such officers, directors and 10%
stockholders are also required by SEC rules to furnish the Company with copies
of all Section 16(a) forms they file.
Based solely on a review of the copies of such forms received by it, or
representations from certain reporting persons, the Company believes that,
during the fiscal year ended June 30, 1999, all Section 16(a) filing
requirements applicable to its officers, directors and 10% stockholders were
complied with except (1) Ascom USA, Inc., a 10% stockholder, filed a Form 5
showing nine transactions which should have been reported earlier on Forms 4
and filed two late Forms 4 showing four transactions; (2) each of Mr. Fowler,
Mr. Evans and Mr. Maase, officers of the Company, and Mr. Sutter, Mr. Hawks,
Mr. Morton and Mr. Wells, directors of the Company, filed a late Form 5
reporting one exempt transaction; and (3) each of Mr. Scullion, Mr. Bulger and
Mr. Bruce-Smith, officers of the Company, filed a late Form 5 reporting two
exempt transactions.
4
<PAGE>
Board Meetings and Committees
The Board of Directors of the Company held a total of four meetings during
fiscal 1999.
The Board of Directors currently has two standing committees: the
Compensation Committee and the Audit Committee. The Compensation Committee
reviews and approves the Company's executive officer compensation policy and
administers the Company's employee stock option plans. The Compensation
Committee held one meeting during fiscal 1999. Messrs. Richion, Wells, Morton
and Hawks are currently the members of the Compensation Committee. 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 Audit Committee held six
meetings during fiscal 1999. Messrs. Wells, Morton and Hawks are currently the
members of the Audit Committee.
The Board of Directors does not have a standing Nominating Committee nor any
committee performing such function.
During fiscal 1999, 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.
Director Compensation
Each non-employee director receives $1,000 for each board meeting attended
up to $4,000 annually. The Company also reimburses non-employee directors for
certain expenses incurred by them in connection with attendance of board
meetings. Directors who are employees of the Company receive no additional or
special remuneration for serving as directors.
Under the Company's Non-employee Directors Stock Option Plan as currently in
effect ("Directors Plan"), each non-employee director of the Company, upon such
director's first election to the Board, is entitled to receive an automatic
nondiscretionary grant of (1) a nonqualified stock option ("NQO") to purchase
20,000 shares of common stock if less than six months have elapsed since the
last annual meeting of stockholders or (2) an NQO to purchase 10,000 shares of
common stock if more than six months have elapsed since the last annual meeting
of stockholders (in either case, "Initial Grant"). In addition, on the date of
the first meeting of the Board following the annual meeting of the stockholders
of the Company, each eligible director is entitled to receive an NQO to
purchase 20,000 shares of common stock ("Annual Grant").
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.
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, 1999 by (1) each person
who is known by the Company to own beneficially more than 5% of the outstanding
shares of common stock, (2) by each of the Company's directors, (3) each of the
Company's executive officers identified in the Summary Compensation Table and
(4) by all directors and officers as a group. Percentage of ownership is based
on 30,446,272 shares of common stock outstanding as of July 31, 1999. Shares of
common stock subject to outstanding options or warrants currently exercisable
or exercisable within 60 days after July 31, 1999 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. 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.
5
<PAGE>
<TABLE>
<CAPTION>
Number Subject to
Options and
Directors, Officers and Number of Shares Warrants Exercisable Percentage
5% Stockholders Notes Beneficially Owned Within 60 Days Beneficially Owned
- ----------------------- ----- ------------------ -------------------- ------------------
<S> <C> <C> <C> <C>
Ascom USA Inc........... (1) 4,715,024 -- 15.49%
9 East Ninth Stet, #1
New York, NY 10003
Capital Ventures
International.......... (2) 2,053,140 845,411 6.73%
c/o Heights Capital
Management, Inc
425 California Street,
Suite 1100
San Francisco, CA 94104
Yuri Khidekel........... (3) 1,573,277 154,396 5.14%
11501 Dublin Boulevard
# 101
Dublin, CA 94568
Yury Shapiro............ (3) 1,535,543 116,662 5.02%
11501 Dublin Boulevard
# 101
Dublin, CA 94568
Randall C. Fowler....... 1,319,040 353,958 4.28%
Larry J. Wells.......... (4) 4,770,024 55,000 15.64%
James P. Scullion....... 234,730 232,975 *
Randall Hawks, Jr....... 15,000 15,000 *
Patrick H. Morton....... 103,320 55,000 *
Charles W. Richion...... 85,000 85,000 *
Fred U. Sutter.......... 65,000 55,000 *
Daniel F. Maase......... 110,035 110,035 *
Paul J. Bulger.......... 58,512 46,657 *
Gary Cauble............. 55,833 55,833 *
All directors and
officers as a group (4) 7,537,684 2,348,337 22.98%
(15 persons)
</TABLE>
- --------
* Less than one percent.
(1) This information was obtained from the 13D/A filed with the Securities and
Exchange Commission by Ascom USA Inc., on August 12, 1999. All of the Ascom
USA Inc. beneficially owned shares are held in a voting trust for which Mr.
Larry Wells, a member of the Board of Directors of the Company, is serving
as the trustee. The trustee of the voting trust votes all the shares held
in the voting trust.
(2) This information was obtained from the 13G filed with the Securities and
Exchange Commission by Capital Ventures International on July 13, 1999.
(3) Includes 1,358,881 shares held by International Technology Concepts, Inc.
Mr. Khidekel and Mr. Shapiro are each an officer, director and principal
shareholder of International Technology Concepts, Inc.. and as such have
the ability to influence the voting and deposition of the shares. Mr.
Khidekel and Mr. Shapiro are each employees of the Company.
(4) Includes 4,715,024 shares held by Ascom USA Inc. in a voting trust for
which Mr. Wells is currently serving as voting trustee.
6
<PAGE>
EXECUTIVE COMPENSATION
The table set forth below provides certain summary information concerning
compensation paid to or accrued for the Company's Chief Executive Officer, each
of the four other most highly compensated executive officers of the Company who
served as executive officers at June 30, 1999 for fiscal years ended June 30,
1999, 1998 and 1997, and one former officer of the Company.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Annual Compensation
------------------------- --- ---
Long Term
Name and Principal Salary Bonus Compensation Other
Position Year ($) ($) Options(#)(1)(2) Compensation($)
------------------ ---- -------- -------- ---------------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C>
Randall Fowler......... 1999 $300,000 $ 16,173 50,000 $10,000
Chairman and Chief
Executive Officer 1998 225,000 16,700 95,000 10,000
1997 200,000 2,933 50,000 9,600
James P. Scullion...... 1999 $250,000 $ 7,966 75,000 $ 8,000
President, Chief
Financial Officer 1998 190,000 11,400 95,000 8,000
and Secretary 1997 165,000 -- 50,000 6,000
Paul J. Bulger......... 1999 $132,602 $130,792 36,250 --
President and Chief
Executive Officer 1998 94,438 122,093 58,700 --
of ANADAC 1997 121,726 60,763 10,000 --
Alan Schallop (3)...... 1999 $160,988 $ 14,211 10,000 --
Vice President
Worldwide Sales, 1998 115,384(4) -- 50,000 --
Marketing and Customer
Support 1997 -- -- -- --
Gary Cauble............ 1999 $151,516 $ 5,308 10,000 --
Vice President
Information Systems 1998 125,000 10,300 60,000 --
1997 101,248 10,287 15,000 --
Daniel F. Maase........ 1999 $135,000 $ 41,511 25,000 --
Vice President
Biometric Imaging 1998 130,000 18,800 50,000 --
Division 1997 126,000 15,000 25,000 --
</TABLE>
- --------
(1) All figures in this column reflect options to purchase the Company's common
stock.
(2) The Company repriced stock options, which had an exercise price greater
than the market value, on April 28, 1998, which constituted a cancellation
of the old option and the grant of a new option. If a stock option was
granted earlier in fiscal 1998 and then cancelled and reissued in
connection with the repricing on April 28, 1998, the stock option is only
counted once in the table under 1998.
(3) Mr. Schallop's employment with the Company terminated on April 23, 1999.
(4) Mr. Schallop's joined the Company on October 8, 1997 and this amount
represents his compensation from the date of hire.
7
<PAGE>
1999 Option Grants Table
The following table sets forth stock options granted to the executive
officers identified in the Summary Compensation Table during the fiscal 1999
under the Company's 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
Assumed Annual
Individual Grants Rates of Stock
% of Total Price
Options Granted Exercise Appreciation
to Employees Price for Options (3)
Options in Fiscal Year Per Expiration ---------------
Name Granted (1) 1999 Share (2) Date 5% 10%
- ---- ---------- ----------------- -------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Randall C. Fowler....... 50,000 4% $ 6.7500 10/29/08 212,252 537,888
James P. Scullion....... 50,000 4% $ 6.7500 10/29/08 212,252 537,888
25,000 2% $ 7.6250 1/28/09 119,883 303,807
Paul J. Bulger.......... 25,000(4) 2% $ 7.8125 7/30/08 122,831 311,278
3,750 0% $ 6.7500 10/29/08 15,919 40,342
3,750 0% $ 7.6250 1/28/09 17,982 45,571
3,750 0% $10.0625 4/27/09 23,731 60,139
Alan Schallop........... 10,000 1% $ 6.7500 10/29/08 42,450 107,578
Daniel F. Maase......... 25,000 2% $ 6.7500 10/29/08 106,126 268,944
Gary Cauble............. 10,000 1% $ 6.7500 10/29/08 42,450 107,578
</TABLE>
- --------
(1) Unless otherwise noted, options vest ratably over twenty-four months from
the date of grant.
(2) Exercise price is the fair market value on the date of grant.
(3) 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 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.
(4) Options vest over a period of five years.
1999 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 1999, and
the number and value of all unexercised options at June 30, 1999. 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, 1999.
8
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
Number of Value of
Unexercised Unexercised
Options at In-the-Money
Fiscal Year Options at
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........... -- $ -- 342,917/47,083 $1,817,609/135,103
James P.
Scullion......... 2,500(2) 18,525(2) 218,809/66,875 880,356,179,635
Paul J. Bulger.... -- -- 38,322/58,761 95,643/122,415
Alan Schallop..... -- -- 19,500/0 46,062/0
Daniel F. Maase... -- -- 102,951/30,417 449,536/86,302
Gary Cauble....... -- -- 51,666/18,334 119,165/47,085
</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) Mr. Scullion gifted these shares to individuals not affiliated with the
Company on May 28, 1999.
The Company did not make any awards during the fiscal year ended June 30,
1999 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.
REPORT OF THE BOARD OF DIRECTORS COMPENSATION COMMITTEE
Notwithstanding anything to the contrary set forth in any of the Company's
previous 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 the industry and with a broader group of similar size companies. In
determining the Chief Executive Officer's compensation for fiscal 1999, the
Compensation Committee considered the compensation paid by the Company's direct
competitors, a group of similar size companies and the corporate performance
for the Company for the prior 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 stockholders 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.
The principal components of executive compensation are base salary,
performance bonuses and stock options.
9
<PAGE>
Base salary is based on competitive factors and the historic salary
structure for various levels of responsibility within the Company. The
Compensation Committee annually evaluates the Company's corporate performance
and conducts surveys of companies in the industry and of a broader group of
similar size companies in order to determine whether the Company's executive
base salaries are in a competitive range.
Performance bonuses are linked directly to the revenue and profitability of
the Company and specific performance objectives. These bonuses in particular
emphasize the Compensation Committee's belief that, when the Company is
successful, the executives should be highly compensated to reflect the
Company's success, but that, conversely, if the Company is not successful and
is not profitable, no bonuses should be paid absent extraordinary
circumstances. With respect to certain officers, a cash bonus is based on a
formula using Company revenue and profitability levels.
The principal equity component of executive compensation is the stock option
program. Stock options are generally granted when an executive joins the
Company and on an annual basis thereafter. Options are occasionally granted for
promotions or other special achievements. The initial option granted to the
executive vests over a period of five years. The purpose of the annual option
grant is to ensure that the executive always has options that vest in
increments in the future. This provides a method of retention and motivation
for the senior level executives of the Company and also aligns senior
management's objectives with the stockholders.
During fiscal 1999, the Chief Executive Officer and the other executive
officers received salary increases equivalent to the amount required to align
them with comparable executives in similar industries, as well as, incentive
stock options. Mr. Bulger received performance bonuses pursuant to an incentive
bonus agreement. Mr. Scullion was promoted to President and received one
additional stock option grant during fiscal 1999.
During fiscal 2000, the Compensation Committee will continue to carefully
consider executive compensation in relation to the Company's performance
compared to that of industry performance levels.
COMPENSATION COMMITTEE
Larry J. Wells
Patrick H. Morton
Randall Hawks, Jr.
Charles W. Richion
Compensation Committee Interlocks and Insider Participation
Randall Hawks Jr., a member of the Compensation Committee of the Company's
Board of Directors during fiscal 1999, was formerly Executive Vice President of
the Company from 1989 to November 1993 and was Vice President of Marketing from
1985 to 1989.
Charles W. Richion, named a member of the Compensation Committee of the
Company's Board of Directors for fiscal 2000, was formerly Division Manager for
the Biometric Security Division for the Company from January 1998 to July 1998
and was Vice President of Corporate Development from June 1997 to January 1998.
10
<PAGE>
Stock Performance Graph
The following graph compares the cumulative total stockholder return on the
common stock of the Company from July 1, 1994 to June 30, 1999 with cumulative
total return on the Russell 2000 Index and a Peer Group (Printrak International
Inc., Digital Biometrics, Inc. and National Registry Inc.) over the same
period.
[PERFORMANCE GRAPH APPEARS HERE]
Identix Inc (IDX)
<TABLE>
<CAPTION>
Cumulative Total Return
---------------------------------------------
6/94 6/95 6/96 6/97 6/98 6/99
<S> <C> <C> <C> <C> <C> <C>
IDENTIX INCORPORATED 100 177 411 312 179 277
PEER GROUP 100 98 70 36 20 26
RUSSELL 2000 100 120 149 173 206 206
</TABLE>
11
<PAGE>
CERTAIN TRANSACTIONS
At July 31, 1999, Ascom USA Inc. ("Ascom") owned approximately 15% 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 (at July 31, 1999, 4,715,024) (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
Voting Trust Agreement expires in 2004. 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. In May 1999, the Company
filed a registration statement covering the resale of 1,700,000 shares of
common stock by Ascom.
Patrick H. Morton is a member of the Company's Board of Directors and
presently owns 38% of Integrated Manufacturing Solutions, Inc. ("IMS"), a
manufacturer of integrated circuit boards that provides manufacturing services
to the Company. IMS billed the Company approximately $2,798,000, $2,437,000 and
$427,000 in fiscal 1999, 1998 and 1997, respectively. Amounts outstanding to
IMS at June 30, 1999 were approximately $249,000.
The Company purchases certain complete biometric security I.T. products,
engineering and administrative services from International Technology Concepts,
Inc. ("IT Concepts"). Mr. Yury Shapiro, Vice President--Hardware of Identicator
Technology and Mr. Yuri Khidekel, Vice President--Software of Identicator
Technology, are each an officer, director and principal shareholder of IT
Concepts, Inc. Each of Mr. Shapiro and Mr. Khidekel beneficially own
approximately 5% of the Company's common stock. IT Concepts billed the Company
approximately $360,000 in the last quarter of fiscal 1999. The Company did not
purchase goods or services from IT Concepts prior to fiscal 1999. Amounts
outstanding to IT Concepts at June 30, 1999 were approximately $86,000.
PROPOSAL 2.
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed PricewaterhouseCoopers LLP, independent
accountants, to audit the consolidated financial statements of the Company for
the fiscal year ending June 30, 2000, and recommends that stockholders vote
"FOR" ratification of such appointment. It is anticipated that a representative
of PricewaterhouseCoopers LLP will be present at the Annual Meeting with the
opportunity to make a statement and to respond to appropriate questions.
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: September 28, 1999
THE BOARD OF DIRECTORS
12
<PAGE>
PROXY
For The Shares Of
IDENTIX INCORPORATED
A Delaware Corporation
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned holder of Common Stock of Identix Incorporated (the
"Company") thereby revokes all previous proxies, acknowledges receipt of the
notice of the stockholders' meeting to be held on October 28, 1999, 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.)
- --------------------------------------------------------------------------------
FOLD AND DETACH HERE
<PAGE>
<TABLE>
Please mark
your votes ----------
as indicated in X
this example ----------
<S> <C> <C> <C>
FOR WITHHOLD
all nominees listed AUTHORITY
(except as noted to to vote for the
the contrary nominees thereof
1. TO ELECT DIRECTORS ---------- ----------- 2. To ratify the appointment of
Nominees: PricewaterhouseCoopers LLP as indepen-
01-Randall C. Fowler 05-James P. Scullion ---------- ----------- dent accountants of the Company for the
02-Randall Hawks, Jr. 06-Fred U. Sutter fiscal year ending June 30, 2000.
03-Patrick H. Morton 07-Larry J. Wells
04-Charles W. Richion
FOR AGAINST ABSTAIN
------------ ------------ ------------
------------ ------------ ------------
(INSTRUCTION: To withhold authority to vote 3. To transact such other business as may
for any nominee, write the nominee's name properly come before the meeting or any
in the space provided below.) adjournment thereof.
FOR AGAINST ABSTAIN
------------ ------------ ------------
------------ ------------ ------------
-------------------------------------------------
WHETHER OR NOT YOU PLAN TO ATTEND THE
ANNUAL MEETING, YOU ARE URGED TO MARK, SIGN,
DATE, AND PROMPTLY RETURN THIS PROXY, USING
THE ENCLOSED ENVELOPE.
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 _________________________
- -----------------------------------------------------------------------------------------------------------------------------------
FOLD AND DETACH HERE
VOTE BY TELEPHONE
[LOGO] [LOGO]
QUICK * * * EASY * * * IMMEDIATE
YOUR VOTE IS IMPORTANT! - YOU CAN VOTE IN ONE OF TWO WAYS:
1. TO VOTE BY PHONE: Call toll-free 1-800-840-1208 on a touch tone telephone 24 hours a day-7 days a week.
There is NO CHARGE to you for this call. - Have your proxy card in hand.
You will be asked to enter a Control Number which is located in the box in the lower right hand corner of this form.
- -----------------------------------------------------------------------------------------------------------------------------------
OPTION
- -----------------------------------------------------------------------------------------------------------------------------------
When asked, please confirm by Pressing 1.
- -----------------------------------------------------------------------------------------------------------------------------------
OPTION
- -----------------------------------------------------------------------------------------------------------------------------------
Proposal 1 - To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL Nominees, press 9.
To withhold FOR AN INDIVIDUAL nominee, press 0 and listen to the Instruction
Proposal 2 - To vote FOR, press 1; AGAINST, press 9, ABSTAIN, press 0.
When asked, please confirm by pressing 1.
The instructions are the same for all remaining proposals.
or
--
2. TO VOTE BY PROXY: Mark, sign and date your proxy card and return promptly in the enclosed envelope.
NOTE: If you vote by telephone, THERE IS NO NEED TO MAIL BACK your Proxy card.
THANK YOU FOR VOTING.
</TABLE>
