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                                                                   EXHIBIT 10.38

             AMENDMENT NO. 1 TO COMPENSATION CONTINUATION AGREEMENT

        This Amendment No. 1 to Compensation Continuation Agreement is dated as
of August 22, 2001 (the "Amendment") by and between Identix Incorporated, a
Delaware corporation ("Identix" or the "Company"), and James P. Scullion
("Employee").

        WHEREAS, Identix and Employee entered into that certain Compensation
Continuation Agreement dated as of January 5, 2000 (the "Agreement") and desire
in accordance with Section 10(i) of the Agreement to make certain amendments
thereto;

        NOW, THEREFORE, in consideration of the foregoing premises, the parties
hereto hereby agree as follows:

        1. Amended Section 1(b). Section 1(b) of the Agreement is hereby amended
to read in its entirety as follows:

               "(b) Resignation for Good Reason" means a voluntary resignation
of employment by Employee as a result of a material diminution in responsibility
from the date of this Amendment, a decrease in base salary or an involuntary
relocation; provided, however, that Employee notifies Identix on or prior to any
such resignation, giving good reason for such resignation, and Identix fails to
cure such event within 30 days thereafter."

        2. New Section 1(g). A new Section 1(g) shall be inserted into the
Agreement as follows:

               "(g) "Change in Control" shall mean the occurrence of any one of
the following: (i) any "person", as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(other than Identix, a subsidiary, an affiliate, or an Identix employee benefit
plan, including any trustee of such plan acting as a trustee) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of Identix representing fifty percent (50%) or more
of the combined voting power of Identix' then outstanding securities; (ii) the
election to a majority of the seats of the Board of Directors of Identix of
candidates who were not proposed by a majority of the Board in office prior to
the time of such election; or (iii) the dissolution or liquidation (partial or
total) of Identix or a sale of assets involving fifty percent (50%) or more of
the assets of Identix (other than the disposition of a subsidiary) or other
transaction or series of related transactions pursuant to which the holders, as
a group, of all of the shares of Identix outstanding prior to the merger,
reorganization or other transaction hold, as a group, less than fifty percent
(50%) of the shares of Identix outstanding after the merger, reorganization or
other transaction."

        3. Amended Section 5. Section 5 of the Agreement is hereby amended to
read in its entirety as follows:





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               "5. Termination Other Than For Cause or Resignation for Good
Reason. Notwithstanding anything else in this Agreement, Identix may effect a
Termination Other Than For Cause at any time after giving at least 30 days'
notice to Employee of such termination or pay in lieu of such notice. Upon the
effective date of any Termination Other Than For Cause or Resignation for Good
Reason, (a) Employee shall immediately be paid all accrued salary and all
accrued vacation pay, all to the effective date of termination, (b) as severance
compensation, Employee shall continue to be paid his then current base salary
until that date which is one calendar year from the effective date of
termination ("Severance Period"), provided, that Employee shall have the right,
exercisable in Employee's sole judgment, to be immediately paid, in one-lump sum
payment, an amount equivalent to Employee's base salary for 12 months, rather
than receiving such amount in regular payments over the term of the Severance
Period, (c) Employee shall be paid all bonuses accrued through the date of
termination, (d) during the Severance Period, Identix shall make COBRA payments
to continue Employee's medical and dental benefits (or pay Employee an amount
equivalent to such COBRA payments) and shall make payments to continue
Employee's term life insurance (or pay Employee an amount equivalent to the
premiums in effect prior to termination), and (e) all options to purchase Common
Stock granted to Employee by Identix shall fully vest immediately, and
notwithstanding any provision of any relevant stock option agreement or stock
option plan to the contrary, Employee shall have 12 months from the effective
date of termination to exercise such options, but Employee shall not be paid any
other compensation or reimbursement of any kind. If any Termination Other Than
For Cause is the result of the death of Employee, all payments payable under
this Section 5 shall be paid to Employee's heirs or legal representative."

        4. New Section 11. A new Section 11 shall be inserted into the Agreement
as follows:

               "11. Change in Control. If a Change in Control shall have
occurred during the term of this Agreement, in addition to any rights Employee
may have under applicable stock option plans and/or stock option agreements with
the Company, the following shall apply:

                                    (a) If the Change in Control occurs prior to
that date which is 12 months before the Expiration Date, then the term of this
Agreement, as indicated on Schedule A, shall not be changed.

                                    (b) If the Change in Control occurs on or
after that date which is 12 months before the Expiration Date, then the term of
this Agreement shall be extended to the first anniversary of the Change in
Control.

                                    (c)(i) If there is a Termination Other Than
For Cause or Resignation for Good Reason within one year after a Change in
Control, and if any of the payments or benefits received or to be received by
the Employee in connection with a Change in Control or Employee's termination of
employment (whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with Identix) (all such payments and benefits,
excluding the Gross-Up Payment, being hereinafter referred to as the "Total
Payments") will be subject to the excise tax (the "Excise Tax")




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imposed under Section 4999 of the Internal Revenue Code of 1986, as amended from
time to time (the "Code"), Identix shall pay, at the time specified in Section
2.6(b)(iv), to the Employee an additional amount (the "Gross-Up Payment") such
that the net amount retained by the Employee, after deduction of any Excise Tax
on the Total Payments and any Federal, state and local income and employment
taxes and Excise Tax upon the Gross-Up Payment, shall be equal to the Total
Payments.

                                    (ii) For purposes of determining whether any
of the Total Payments will be subject to the Excise Tax and the amount of such
Excise Tax, (A) all of the Total Payments shall be treated as "parachute
payments" (within the meaning of Section 280G(b)(2) of the Code) unless, in the
opinion of tax counsel ("Tax Counsel") reasonably acceptable to the Employee and
selected by the accounting firm which was, immediately prior to the Change in
Control, Identix' independent auditor (the "Auditor"), such payments or benefits
(in whole or in part) should not be treated by the courts as constituting
parachute payments, including by reason of Section 280G(b)(4)(A) of the Code,
(B) all "excess parachute payments" within the meaning of Section 280G(b)(l) of
the Code shall be treated as subject to the Excise Tax unless, in the opinion of
Tax Counsel, such excess parachute payments (in whole or in part) should be
treated by the courts as representing reasonable compensation for services
actually rendered (within the meaning of Section 280G(b)(4)(B) of the Code), or
are otherwise not subject to the Excise Tax, and (C) the value of any noncash
benefits or any deferred payment or benefit shall be determined by the Auditor
in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.
All fees and expenses of the Tax Counsel and the Auditor shall be borne solely
by Identix.

                                    (iii) For purposes of determining the amount
of the Gross-Up Payment, the Employee shall be deemed to pay Federal income tax
at the highest marginal rate of Federal income taxation in the calendar year in
which the Gross-Up Payment is to be made and state and local income taxes at the
highest marginal rate of taxation in the state and locality of the Employee's
residence in the calendar year in which the Gross-Up Payment is to be made, net
of the maximum reduction in Federal income taxes which could be obtained from
deduction of such state and local taxes, taking into account the reduction in
itemized deduction under Section 68 of the Code.

                                    (iv) The Gross-Up Payment shall be made upon
the payment to the Employee of the Total Payments, unless it is initially
determined by Identix or the Tax Counsel that the Total Payments are not subject
to the Excise Tax but after payment of the Total Payments, it is finally
determined following the proceedings set forth in Section 2.6(b)(v) and (vi)
that the Total Payments are subject to the Excise Tax, in which case it shall be
made upon the imposition upon the Employee of the Excise Tax.

                                    (v) The Employee shall notify Identix in
writing of any claim by the Internal Revenue Service that, if successful, would
require the payment by Identix of a Gross-Up Payment. Such notification shall be
given as soon as practicable but no later than ten (10) business days after the
Employee is informed in writing of such claim and shall apprise Identix of the
nature of such claim and the date on which such claim is requested to be paid.
The Employee shall not pay such claim prior to




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the expiration of the thirty (30) day period following the date on which the
Employee gives such notice to Identix (or such shorter period ending on the date
that any payment of taxes with respect to such claim is due). If Identix
notifies the Employee in writing prior to the expiration of such period that it
desires to contest such claim, the Employee shall:

                      A) give Identix any information reasonably requested by
Identix relating to such claim;

                      B) take such action in connection with contesting such
claim as Identix shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect to
such claim by an attorney reasonably selected by Identix and reasonably
satisfactory to the Employee;

                      C) cooperate with Identix in good faith in order to
effectively contest such claim; and

                      D) permit Identix to control any proceedings relating to
such claim as provided below;

provided, however, that Identix shall bear and pay directly all costs and
expenses (including, but not limited to, additional interest and penalties and
related legal, consulting or other similar fees) incurred in connection with
such contest and shall indemnify and hold the Employee harmless, on an after-tax
basis, for any Excise Tax or other tax (including interest and penalties with
respect thereto) imposed as a result of such representation and payment of costs
and expenses.

                                    (vi) Identix shall control all proceedings
taken in connection with such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings, hearings and conferences
with the taxing authority in respect of such claim and may, at its sole option,
either direct the Employee to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and the Employee agrees to
prosecute such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts, as Identix
shall determine; provided, however, that if Identix directs the Employee to pay
such claim and sue for a refund, Identix shall advance the amount of such
payment to the Employee on an interest-free basis, and shall indemnify and hold
the Employee harmless, on an after-tax basis, from any Excise Tax or other tax
(including interest or penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and provided, further, that if the Employee is required to extend the statute of
limitations to enable Identix to contest such claim, the Employee may limit this
extension solely to such claim. Identix' control of the contest shall be limited
to issues with respect to which a Gross-Up Payment would be payable hereunder
and the Employee shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority. In addition, no position may be taken nor any final resolution be
agreed to by Identix without the Employee's consent if such position or
resolution could reasonably be expected to adversely affect the Employee
(including any other tax position of the Employee unrelated to the matters
covered hereby).




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                                    (vii) In the event that the Employee
receives a refund of the Excise Tax previously paid, the Employee shall repay to
Identix, within five (5) business days following the receipt of such refund of
the Excise Tax previously paid, the amount of such refund plus any interest
received by the Employee from the Internal Revenue Service on the refund, and an
amount equal to the reduction in the Employee's Federal, state and local income
tax assuming that the repayment is deductible, using the assumptions set forth
in Section 2.6(b)(iii). If, after the receipt by the Employee of an amount
advanced by Identix in connection with an Excise Tax claim, a determination is
made that Employee shall not be entitled to any refund with respect to such
claim and Identix does not notify the Employee in writing of its intent to
contest the denial of such refund prior to the expiration of thirty (30) days
after such determination, such advance shall be forgiven and shall not be
required to be repaid."

        5. Effect. Except as expressly provided herein, the Agreement has not
been amended or modified and, as amended hereby, shall remain in full force and
effect.

        6. Counterparts. This Amendment may be executed in duplicate
counterparts, each of which shall be deemed to be an original.

        IN WITNESS WHEREOF, the parties have executed this Amendment as of the
day and year first above written.

IDENTIX INCORPORATED                EMPLOYEE



By /s/ Robert McCashin              By /s/ James P. Scullion
   ---------------------------         ----------------------------
  Name:                               Name:
  Title:


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