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Exhibit 10.1

 

January 24, 2006

 

Mark J. Lustig

[Address]

 

Dear Mark:

 

We are pleased to offer you the position of Chief Financial Officer for
ActivIdentity, Inc. (“ActivIdentity” or the “Company”) with an effective start
date of February 6, 2006. In this position, you will report to Ben Barnes, Chief
Executive Officer.

 

Annual Salary: Your initial annual base salary will be $250,000, less deductions
required by law, payable in accordance with ActivIdentity’s normal payroll
procedures.

 

Incentive Bonus: You will be eligible for an annual bonus (“Target Bonus”) of up
to $125,000. You will be eligible for a full year “Target Bonus” if your start
date is February 6, 2006 or sooner. The Target Bonus will be based on the
achievement of overall Company fiscal performance and your successful completion
of mutually agreed upon performance objectives to be paid after the fiscal year
ending September 30, 2006.

 

Stock Options: At the Board of Directors meeting following your date of hire,
the Company’s management will recommend to the Board of Directors that it issues
you 250,000 shares (Normal Vesting) of ActivIdentity Common Stock, and 50,000
shares of Restricted Stock (Normal Vesting.) The exercise price of the options
shall be set and approved by the Board of Directors at that meeting. Options
will be issued pursuant to the terms of the Company’s U.S. Stock Option Program.
The vesting period begins on the date your grant is approved by the Board of
Directors. 25% of the options vest one year after the grant date then the
remaining options vest monthly thereafter for three years. If there is a “change
of control” vesting shall accelerate to 100% of these initial restricted shares
and options.

 

Benefits: As of your date of hire, you are eligible to participate in
Company-sponsored benefits in accordance with the applicable plans and policies.
These consist at present of the following, but may be modified or terminated
from time to time:

 

  •   Medical (Blue Shield of California HMO, PPO, or Kaiser);

 

  •   Dental (Humana Dental);

 

  •   Vision (VSP);

 

  •   Group Life, AD&D, LTD and STD Insurance (The Standard);

 

  •   401K;

 

  •   Three weeks of accrued vacation time per year;

 

  •   Ten paid holidays per year;

 

  •   One floating personal day per quarter;

 

  •   Ten days of accrued sick time per year.

 

Terms of Employment: Your employment with the Company will be “at will” and
either you or ActivIdentity may terminate the employment relationship at any
time and for any reason, with or without cause. In addition, the Company may
change your compensation, duties, assignments,

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responsibilities or location of your position at any time. These provisions
expressly supersede any previous representations, oral or written. Your at-will
employment status cannot be modified unless in writing and signed by both you
and the President of the Company. Other than your at-will status, neither this
letter, nor your acceptance thereof, constitutes a contract of employment.

 

As an employee of the Company, you will be expected to devote all of your
business time, skill, attention, and best efforts to ActivIdentity’s business
and to fulfill your responsibilities to the best of your abilities. This
position is a full time job with the understanding that during your employment
you will not engage in outside consulting activities, whether compensated or
not, which materially interfere with the performance of your job duties with the
Company or create a conflict of interest, nor will you establish a competing
business during your employment with the Company. Accordingly, you are required
to seek approval from the Company before engaging in any employment or
consulting services outside the Company while employed by ActivIdentity so that
the Company may determine if any conflict exists. You also confirm that you are
not bound by any other agreement with any prior or current employer, person or
entity which would prevent you from fully performing your duties with
ActivIdentity.

 

Because the Company’s proprietary information is extremely important, this offer
of employment is expressly subject to your executing an Employee Confidential
Information Agreement in the form enclosed with this letter as well as your
agreement to follow all other rules and policies that the Company may announce
from time to time. Further, your employment with ActivIdentity is contingent
upon your providing appropriate legal proof of eligibility to be employed in the
United States within three days of your start date.

 

Please indicate your acceptance of the terms of this offer by returning a signed
copy of this letter to Human Resources. This offer is valid through the close of
business January 30, 2006.

 

Mark, we are excited about having you as a member of the ActivIdentity team, and
all of us look forward to working with you.

 

Sincerely,

 

Jerry Farnsworth

Vice President, Human Resources

ActivIdentity, Inc.

 

Enclosures:    Duplicate Letter      Employee Confidential Information Agreement
     Employee Benefits Summary

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Acceptance and Acknowledgment

 

I have read, understand, and accept the foregoing terms of employment.

 

Signed: 

        Mark Lustig

 

Date: 

         

 

My employment with ActivIdentity, Inc. will commence on                     ,
2006.