Exhibit 10.01

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September 15, 2006

Mr. Bernard C. Bailey

Viisage Technology, Inc.

296 Concord Road, Third Floor

Billerica, MA 01821

 

Re: Separation Agreement and Release

Dear Bernard,

This letter (the “Letter Agreement”) summarizes our understanding regarding the
terms and conditions that shall apply to the termination of your employment with
Viisage Technology, Inc. (“Viisage” or the “Company”) in connection with the
closing of the acquisition by Viisage of Identix Incorporated (the
“Transaction”). Unless the context clearly indicates otherwise, the terms
“Viisage” and the “Company” as used herein shall include both Viisage and the
corporate entity that survives or results from the Transaction.

1. Termination of Employment and Other Capacities. Your employment by Viisage
shall terminate as of the close of the business day on September 30, 2006. You
resigned effective at the close of business on the date of the closing of the
Transaction (the “Transaction Date”) from your position as President, CEO and
Director of Viisage Technology, Inc. and all positions you held with any Viisage
affiliated or related company, whether as an officer, director, managing
director or otherwise, provided that your employment with Viisage shall continue
until the Termination Date. You agree to submit promptly any documents or
instruments reasonably requested by Viisage to evidence such resignations,
including separate written resignations from all such positions if so requested,
and to cooperate in effecting any formal action or filing required in connection
with such resignations.

2. Accrued Salary and Vacation Time. On the Termination Date you will be paid
for all base salary and unused vacation time accrued as of that date. Your
current base salary ($330,000 annually) shall not be reduced between the date of
this Letter Agreement and the Termination Date.

3. Consideration. In consideration of the promises agreed to by you and Viisage
in this Letter Agreement, contingent on the expiration of the seven day
revocation period described in Exhibit A, each of the following shall occur:

A. Viisage shall pay you one lump sum severance payment of $530,000, which is
equal to 12 months of your current base salary ($330,000 annually) less
applicable tax deductions, other withholdings required by law, and authorized
deductions, plus a target bonus of $200,000. The payment of $530,000 shall be
paid on January 1, 2007.

296 Concord Road, Billerica, Massachusetts 01821 Tel: 978.952.2200 Fax:
978.952.2225

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Bernard C. Bailey

September 15, 2006

Page 2

B. On the Termination Date, Viisage shall pay you a prorated bonus payment for
2006 of $150,000, which is based on your current target bonus of $200,000, less
applicable tax deductions, other withholdings required by law, and authorized
deductions.

C. Viisage shall pay you on the first pay period following the Transaction Date,
an integration incentive bonus of $105,000, less applicable tax deductions,
other withholdings required by law, and authorized deductions.

D. In consideration of your agreement to expand the scope of certain restrictive
covenants originally imposed on you under the Intellectual Property Agreement,
as provided in Section 8 below, Viisage shall pay you one lump sum payment of
$530,000, which payment will be paid on the Termination Date; provided that
Viisage shall obtain a valuation of such consideration by a third-party
appraiser and, if such valuation is less than $530,000, Viisage shall pay you
the amount equal to the difference between $530,000 and the value determined by
the third-party appraiser as one lump-sum severance payment less applicable tax
deductions, other withholdings required by law, and authorized deductions on the
Termination Date.

E. Provided that you elect to continue to participate in the company’s group
medical and dental insurance plans under COBRA, which entitles you to continue
your coverage under those plans for eighteen (18) months following the
Termination Date, Viisage shall, for these eighteen (18) months of your COBRA
period continue to pay 100% of your benefits, consistent with your existing
employment agreement. For an additional six (6) months beyond your COBRA period,
for a total of twenty four (24) months, Viisage shall arrange to provide you, at
no cost to you, with medical and dental benefits substantially similar to the
medical and dental benefits which you are currently receiving. Following your
Termination Date, reimbursement of your executive prerequisites (including
financial and legal advice, as well as your annual physical) to which you have
been entitled during your employment as Chief Executive officer of Viisage shall
cease.

F. Because the Transaction constitutes a “Change in Control” as defined in your
outstanding stock option agreements and restricted stock grants, all of your
stock options and restricted stock grants shall immediately become vested in
full on the Transaction Date. All other provisions of the option agreements
shall remain in full force and effect.

G. You shall have the right to reduce the payments made to you by Viisage
pursuant to this Agreement such that no part of the total payments constitutes
an “excess parachute payment” within the meaning of Section 280G(b); provided,
however, that such reduction shall be made only to the extent that it is to your
benefit on an after-tax basis, taking into account the excise tax described in
Section 4999 of the Code.

H. Viisage shall permit you to retain at no charge your cellular telephone and
laptop computer.

4. General Release of Claims. Within seven (7) days of the Termination Date, you
shall execute a General Release of Claims in a form substantially similar to the
form attached hereto as Exhibit A. Failure to timely execute and deliver the
General Release of Claims will render this Letter Agreement null and void.

5. Non-disparagement/Non-defamation. You agree that you will not make any
disparaging, negative or adverse remarks whatsoever, whether in public or
private, concerning

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Bernard C. Bailey

September 15, 2006

Page 3

Viisage, including its employees, members of its board of directors, business,
products/services, and customers. You further agree not to provide any
non-public information with respect to Viisage to any third party for any
reason. Viisage agrees that none of its officers or directors will make any
disparaging, negative or adverse remarks whatsoever, whether in public or
private, concerning you, including your performance as an officer and employee
of Viisage and member of Viisage’s board of directors. Although Viisage cannot
control all communications by all of its employees, it will neither encourage
any of its employees to make any such disparaging, negative of adverse remark
concerning you, nor tolerate any such communication if it discovers that any of
its employees have made any such remark concerning you.

6. Indemnification. Except to the extent prohibited by applicable law, Viisage
agrees to indemnify, defend and hold you harmless from any and all pending and
future actions, suits, proceedings, demands, judgments, liabilities, losses,
costs and expenses (including, without limitation, all legal costs and
disbursements) incurred by you in connection with any action brought against you
based upon activities undertaken by you while acting as an employee or officer
of the Company, in each case, while acting in good faith in connection therewith
and in a manner you reasonably believe to be in or not opposed to the best
interests of the Viisage.

7. Return of Property. Except as set forth in Section 3H above, you acknowledge
that all documents, records, materials, software, equipment, and other physical
property, and all copies of any of the foregoing that have come into your
possession or been produced by you in connection with your employment have been
and remain the sole property of Viisage. You confirm that you will return all
such items within seven (7) days of the Termination Date, unless otherwise
agreed to by you and Viisage in connection with ongoing transition-related
duties for the Company.

8. Non-Competition; Non-Solicitation. Section 7 of the Intellectual Property,
Confidentiality, and Noncompetition Agreement between you and Viisage dated
July 30, 2002 (the “Intellectual Property Agreement”), a copy of which is
attached as Exhibit B hereto, is hereby stricken and replaced with the following
language:

(7) During the term of my employment with Viisage and for one (1) year
thereafter, I will not (unless otherwise approved in writing by the Chief
Executive Officer of Viisage), directly or indirectly, individually or as an
employee, officer, director, consultant, independent contractor, stockholder
(except as a stockholder owning less than one percent (1%) of the shares of a
publicly traded corporation), partner, member, or other owner or participant in
any business entity other than Viisage:

 

  a. carry on or participate or engage in any business that directly competes
with the business of Viisage anywhere in the United States or elsewhere in the
world where Viisage does business, provided that for purposes of this Agreement,
“business that directly competes” shall mean a person or entity whose primary
business is the development, sale, license or distribution of products and/or
services in the fields of secure credentials or biometrics;

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Bernard C. Bailey

September 15, 2006

Page 4

 

  b. solicit or endeavor to entice away or decrease his/her/its business
relations with Viisage, any customer or client of, supplier to, or other party
having material business relations with Viisage; or

 

  c. solicit or endeavor to entice away from Viisage, hire, or offer employment
or any consulting arrangement to, any person or entity who is, or was within the
one-year period immediately prior thereto, employed by Viisage, or otherwise
interfere with any such person’s relationship with Viisage. I understand that
this Agreement does not prohibit me from making any general solicitation for
employees or engaging in public advertising of employment opportunities
(including through the use of employment agencies) not specifically directed to
any of Viisage’s directors, officers or employees, nor does this Agreement
prohibit me from hiring any person who responds to any such general solicitation
or public advertising.

9. Confidentiality of Viisage Information. You reaffirm the existence and
validity of, and acknowledge that you are bound by the terms of the Intellectual
Property Agreement (as modified by Section 8 of this Agreement) which, among
other things, requires you to maintain the confidentiality of Viisage
information and not to compete with Viisage for a specified period of time.
Notwithstanding the foregoing, the non-competition restriction set forth in
section 7 of the Intellectual Property Agreement shall not include any
employment or other relationship with an IT and/or physical security services
company. You further agree that you shall abide by any and all common-law and
statutory obligations relating to protection and non-disclosure of Viisage trade
secrets and confidential and proprietary documents and information.

10. Settlement of Obligations. You will settle any outstanding personal
obligations that you may have with Viisage and ensure that all pending expense
reports are reconciled no later than two weeks from your Termination Date. To
the extent allowed by law, your outstanding obligations and unreconciled
expenses remaining after the date that is two weeks from your Termination Date
will be deducted from any payments owed to you by Viisage.

11. Settlement of Amounts Due. You agree that the payments and benefits
mentioned in this Letter Agreement are the only payments and benefits you will
receive in connection with the termination of your employment following the
closing of the Transaction.

12. Complete Binding Agreement; Construction; Governing Law; Modification. This
Agreement, including the Intellectual Property Agreement, as amended herein, is
intended by the parties as a final written expression of their agreement with
respect to the terms and conditions that shall apply to you in connection with
the termination of your employment and the closing of the Transaction. This
Letter Agreement shall be binding upon and inure to the benefit of all the
parties hereto and their respective heirs, successors and assigns. In the event
of any dispute, this Letter Agreement will be construed as a whole, will be
interpreted in accordance with its fair meaning, and will not be construed
strictly for or against either you or Viisage. This Letter Agreement will be
governed by Massachusetts law, without giving effect to the principles of
conflict of law. This Letter Agreement may be modified only by a written
agreement signed by you and an authorized representative of Viisage.

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Bernard C. Bailey

September 15, 2006

Page 5

13. Severability. You and Viisage hereby agree that each provision herein shall
be treated as a separate and independent clause, and the unenforceability of any
one clause shall in no way impair the enforceability of the other clauses
herein. If any term or provision of this Agreement shall, to any extent, be
found invalid or unenforceable by a court of competent jurisdiction, the
remainder of this Agreement shall not be affected, and shall be valid and
enforceable to the fullest extent permitted by law.

14. Successors. In addition to any obligations imposed by law upon any successor
to Viisage, Viisage will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of Viisage to expressly assume and agree to perform this
Letter Agreement in the same manner and to the same extent that Viisage would be
required to perform it if no such succession had taken place.

15. Beneficiaries. This Letter Agreement shall inure to the benefit of and be
enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If you
shall die while any amount would still be payable to you hereunder if you had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Letter Agreement to the executors,
personal representatives or administrators of your estate.

16. Post Termination Assistance. During the twelve months following the
termination date of your employment, you agree to make yourself reasonably
available to respond to telephone inquiries or otherwise assist the Company as
to Company matters of which you may have knowledge. To the extent that such
assistance requires more than two hours in any month, the Company agrees to
compensate you at a rate of $250/hour. In no event shall this obligation
interfere with your employment, consulting or other business obligations at the
time.

[Signature Page Follows.]

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VIISAGE TECHNOLOGY, INC.     

/s/ Robert V. LaPenta

     September 15, 2006 By:   Robert V. LaPenta      Date   Chairman of the
Board, President and Chief Executive Officer      EMPLOYEE     

/s/ Bernard C. Bailey

     September 15, 2006 Bernard C. Bailey      Date

[SIGNATURE PAGE TO SEPARATION AGREEMENT]

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EXHIBIT A

GENERAL RELEASE AND WAIVER OF ALL CLAIMS

(INCLUDING AGE DISCRIMINATION IN EMPLOYMENT ACT CLAIMS)

In consideration of the payment, benefits and other agreements set forth in the
Letter Agreement dated September 15, 2006 between Viisage Technologies, Inc.
(“Viisage”) and Bernard C. Bailey (the “Executive”) to which this General
Release and Waiver Of All Claims is attached (the “Letter Agreement”), the
Executive, for himself and for his heirs, executors, estates, agents,
representatives, attorneys, insurers, successors and assigns (collectively, the
“Releasors”), hereby voluntarily releases and forever discharges Viisage and its
subsidiaries (direct and indirect), affiliates, related companies, divisions,
and predecessor and successor companies (Viisage and such subsidiaries,
affiliates, related companies, divisions and predecessor and successor companies
being collectively referred to as the “Company”), and each of its and their
present, former and future shareholders, officers, directors, employees, agents,
representatives, attorneys, insurers, heirs, successors and assigns in their
capacities as such (Viisage, its subsidiaries, affiliates, related companies,
divisions and predecessor and successor companies and its and their present,
former and future shareholders, officers, directors, employees, agents,
representatives, attorneys, insurers, heirs, successors and assigns in their
capacities as such being collectively referred to as the “Releases”) from all
actions, causes of action, suits, debts, sums of money, accounts, covenants,
contracts, agreements, promises, damages, judgments, demands and claims which
the Releasors ever had, or now have, or hereafter can, shall or may have, for,
upon or by reason of any matter or cause whatsoever arising from the beginning
of the world to the date of the execution of this Release and Waiver, whether
known or unknown, in law or equity, whether statutory or common law, whether
federal, state, local or otherwise, including but not limited to claims arising
out of or in any way related to the Executive’s employment by the Company
(including his hiring), or the termination of that employment, whether as a
contractor or employee, or any related matters (including but not limited to
claims, if any, arising under the Age Discrimination in Employment Act of 1967,
as amended, the Civil Rights Act of 1866, Title VII of the Civil Rights Act of
1964, as amended, the Civil Rights Act of 1991, as amended, the Americans With
Disabilities Act of 1990, as amended, the Family and Medical Leave Act of 1993,
the Immigration Reform and Control Act of 1986, the Massachusetts Law Against
Discrimination (Mass. Gen. Laws ch. 151B§1 et seq.), the Massachusetts Payment
of Wages Act, the Massachusetts Civil and Equal Rights Acts, and federal or
Massachusetts laws, statutes and regulations, including common or constitutional
law).

The Executive represents and warrants that the Executive knowingly and
voluntarily waives all rights or claims arising prior to the Executive’s
execution of this Release and Waiver that the Executive may have against the
Releasees, or any of them, to receive any payment, benefit or remedial relief as
a consequence of an action brought on the Executive’s behalf in any state or
federal agency and/or as a consequence of any litigation concerning any facts
alleged in any such action.

The Executive further represents that:

(a) The Company has advised the Executive to consult with an attorney of the
Executive’s choosing concerning the rights waived in this Release and Waiver.
The Executive has carefully read and fully understands this Release and Waiver,
and is voluntarily entering into this Release and Waiver.

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(b) The Executive understands that the Executive has 21 days to review this
Release and Waiver prior to its execution. If at any time prior to the end of
the 21 day period, the Executive executes this Release and Waiver, the Executive
acknowledges that such early execution is a knowing and voluntary waiver of the
Executive’s right to consider this Release and Waiver for at least 21 days and
is due to the Executive’s belief that the Executive has had ample time in which
to consider and understand this Release and Waiver and in which to review this
Release and Waiver with an attorney.

(c) The Executive understands that, for a period of seven days after the
Executive has executed this Release and Waiver, the Executive may revoke this
Release and Waiver by giving notice in writing of such revocation to the
Company. If at any time after the end of the seven-day period the Executive
accepts any of the payments or benefits provided described in Section 3 of the
Letter Agreement, such acceptance will constitute an admission by the Executive
that the Executive did not revoke this Release and Waiver during the revocation
period and will further constitute an admission by the Executive that this
Release and Waiver has become effective and enforceable.

(d) The Executive understands the effect of this Release and Waiver and that the
Executive gives up any rights the Executive may have, in particular but without
limitation, under the Federal Age Discrimination in Employment Act and the
Massachusetts Law Against Discrimination (Mass. Gen. Laws ch. 151B§1 et seq.).

(e) The Executive understands that the Executive is receiving benefits pursuant
to the Letter Agreement that the Executive would not otherwise be entitled to if
the Executive did not enter into this Release and Waiver.

(f) The Executive acknowledges that the severance pay and associated benefits
specified in the Agreement represent all payments and benefits owed to the
Executive and that upon receipt of said payments and benefits, the Executive
shall have received all payments and benefits owed to the Executive in
connection with the Executive’s employment with the Company and that no
additional payments or benefits are due.

Signed and sealed this 15th day of September 2006.

Please note that you may revoke this Release and Waiver within 7 days of
signing, in which case this Release and Waiver shall be void.

 

/s/ Bernard C. Bailey

Bernard C. Bailey

[SIGNATURE PAGE TO RELEASE AND WAIVER]