UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K/A
 Amendment No. 1
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Fiscal Year Ended December 31, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Transition Period from            to             .
 Commission File Number 001-33002
 L-1 IDENTITY SOLUTIONS, INC.
 (Exact name of registrant as specified in its charter)
 Delaware
    
    02-0807887(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)177 Broad Street, 12th Floor, Stamford, CT
    
    06901(Address of principal executive offices)
    
    (Zip Code)
 Registrants telephone number, including area code: (203)-504-1100
 Securities registered pursuant to Section 12(b) of the Act: Common Stock $.001 par value NYSE
Securities registered pursuant to Section 12(g) of the Act: None
 o þ
 o þ
 þ o
 þ o
  Large accelerated filer þ
Accelerated filer o
Non-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o o þ




---



##### 



EXPLANATORY NOTE
    2




---



##### 



PART III
 Item 10. Directors and Executive Officers and Corporate Governance
 DIRECTORS
  Name and present position,if any, with the Company
    
    Age, period served as a director, other business experienceClass I DirectorsB.G. Beck
    
    74, has served as a director of the Company since February
2004. Mr. Beck was the Founder, President and Chief
Executive Officer of Trans Digital Technologies
Corporation from 1998 until its acquisition by the Company
in February 2004. Mr. Beck currently serves as a member of
the board of directors of Cardinal Financial Corporation,
a provider of comprehensive individual and corporate
banking services.Mr. Beck brings to the Board practical business experience
as the founder of a successful secure credentialing
business. Under Mr. Becks leadership, Trans Digital
Technologies became the sole source provider of high
security technology and services to the U.S. Department of
State for the production of U.S. passports. Mr. Becks
experience equips him to provide expert input to the Board
relating to our secure credentialing business specifically
and U.S. government contracting generally. In addition,
Mr. Beck serves as a member of our Marketing Committee.James M. Loy
    
    68, has served as a director of the Company since July
2006. Mr. Loy has been Senior Counselor at The Cohen Group
since 2005. From 2003 to 2005, Mr. Loy served as Deputy
Secretary of Homeland Security. From 2002 to 2003, he was
Administrator, Transportation Security Administration. He
served as Commandant of the U.S. Coast Guard from 1998 to
2002 and was Coast Guard Chief of Staff from 1996 to 1998.
From 1994 to 1996, Mr. Loy was Commander of the Coast
Guards Atlantic Area. Mr. Loy also serves on the board of
directors of Lockheed Martin Corporation.Mr. Loys senior leadership experience at Homeland
Security, the Transportation Security Administration and
as Commandant of the U.S. Coast Guard has exposed him to a
broad range of national security issues which directly
impact our business and the products we develop. In
addition, Mr. Loy serves as the Chairman of our
Compensation Committee and as a member of our Audit
Committee.
 3




---



##### 



Name and present position,if any, with the Company
    
    Age, period served as a director, other business experiencePeter Nessen
    
    75, has served as a director of the Company since its
incorporation in 1996. Since July 2003, Mr. Nessen has
served as the President of Nessen Associates Ltd., a
non-profit consulting company. From January 2003 to July
2003, Mr. Nessen served as an adviser to the Governor of
the Commonwealth of Massachusetts on education matters.
Mr. Nessen has been chairman of the board of directors of
NCN Financial, a private banking firm, since January 1995.
From June 1993 through December 1994, Mr. Nessen was Dean
for Resources and Special Projects at Harvard Medical
School. From January 1989 to February 1993, Mr. Nessen was
Secretary of Administration and Finance for the
Commonwealth of Massachusetts. Prior to that, Mr. Nessen,
who is a Certified Public Accountant, worked with Price
Waterhouse before starting his own firm, Henry J.
Bornhofft Company, which later merged with BDO Seidman.Mr. Nessens senior advisory and leadership positions with
the Commonwealth of Massachusetts give him insight into
state governmental matters, which are highly relevant to
our secure credentialing business in particular. Mr.
Nessen has a long history of leadership at our Company,
having served on the board of our predecessor Viisage
Technology, Inc., since its initial public offering in
1996. Mr. Nessen provides financial expertise to the
Board, serving as the Vice Chairman of our Audit
Committee, of which he was previously Chairman, and
qualifying as an audit committee financial expert under
the criteria established by the SEC. Mr. Nessen also
serves as a member of our Nominating and Corporate
Governance Committee, and the Special Committee of the
Board of Directors. In addition, he serves as our Lead
Director, presiding over executive sessions of the
non-management directors pursuant to the listing rules of
the NYSE.Class II DirectorsRobert V. LaPenta
Chairman, President and
Chief Executive Officer
    
    65, has served as the Chairman of the Board of Directors
of the Company since December 2005 and as President and
Chief Executive Officer of the Company since August 2006.
Mr. LaPenta is the founder and Chief Executive Officer of
L-1 Investment Partners, LLC, a private investment
management firm. From April 1997 to April 2005, Mr.
LaPenta served as President, Chief Financial Officer and a
director of L-3 Communications Holdings, Inc., which he
co-founded in April 1997. From April 1996, when Loral
Corporation was acquired by Lockheed Martin Corporation,
until April 1997, Mr. LaPenta was a Vice President of
Lockheed Martin and was Vice President and Chief Financial
Officer of Lockheed Martins Command, Control,
Communications and Intelligence and Systems Integration
Sector. Prior to the April 1996 acquisition of Loral, he
was Lorals Senior Vice President and Controller, a
position he held since 1991. He joined Loral in 1972 and
was named Vice President and Controller of its largest
division in 1974. He became Corporate Controller in 1978
and was named Vice President in 1979. Mr. LaPenta is on
the board of trustees of Iona College, the board of
directors of Core Software Technologies and the board of
directors of Leap Wireless International, Inc., a
NASDAQ-listed company in the wireless telecommunications
sector.Since becoming the Chairman of the Board in December 2005,
Mr. LaPenta has directed the Companys acquisition,
integration, financing and marketing efforts, growing the
business from $66.2 million in revenue in 2005 to $650
million in 2009. Mr. LaPentas knowledge of all aspects of
our business and its history, combined with his own
substantial investment in the Company and focus on
attaining shareholder value, position him well to serve as
our Chairman, President and Chief Executive Officer.
 4




---



##### 



Name and present position,if any, with the Company
    
    Age, period served as a director, other business experienceRobert S. Gelbard
    
    67, has served as a director of the Company since
September 2005. Ambassador Gelbard is a self-employed
international business consulting. From April 2005 until
May 2010, he was Chairman of Washington Global Partners,
LLC, a consulting firm. From March 2002 to September 2002,
he was Senior Vice President of International Affairs and
Government Relations for ICN Pharmaceuticals, Inc., a
global pharmaceuticals company. From February 1967 to
January 2002, Ambassador Gelbard held various senior level
positions in the U.S. Department of State, including
serving as Ambassador to Indonesia from 1999-2001,
President Clintons Special Representative for the Balkans
from 1997-1999, Assistant Secretary of State from
1993-1997, and Ambassador to Bolivia from 1988-1991. In
1989 Ambassador Gelbard received the Presidential
Meritorious Award, and in 2002 he received the State
Department Distinguished Service Award, its highest
decoration.Ambassador Gelbard has in-depth knowledge of the complex
international, political and security issues that affect
our business due to his experience in senior-level
positions within the U.S. federal government. The federal
government is a vitally important customer and Ambassador
Gelbard has valuable insight regarding the international
needs of this customer. In addition, Ambassador Gelbard
serves as Chairman of our Marketing Committee and is a
member of our Compensation Committee. From September 2005
until May 2010, he was Chairman of the Nominating and
Corporate Governance Committee.Harriet Mouchly-Weiss
    
    68, has served as a director of the Company since its
incorporation in 1996. Since February 2009, Ms.
Mouchly-Weiss has been Vice Chairman and Senior Partner of
Kreab Gavin Anderson Worldwide, a communications
consulting firm, with offices in 25 countries, including
New York and Washington. This is the product of a merger
with the company she founded in January 1993, Strategy XXI
Group, an international communications and consulting
firm, in which she served as Managing Partner. Ms.
Mouchly-Weiss was also Vice Chair of the Kreab Group, an
international consultancy affiliated with Strategy XXI.
Prior to founding Strategy XXI Group, Ms. Mouchly-Weiss
was President of GCI International, a division of Grey
Advertising. Ms. Mouchly-Weiss is a member of the
Committee of 200 and currently serves on the boards of The
Friends of the United Nations, the UJA-Federation of New
York, the Count-Me-In micro-lending group, the Acumen
Fund, the New Israel Fund, and is a Consultant to the
Executive Director of UNOP.As the founder and managing partner of Strategy XXI, Ms.
Mouchly-Weiss has executive level experience in marketing
and communications issues with an international focus.
This skill set brings a diversity of experience to our
board. Ms. Mouchly-Weiss also brings a depth of
understanding of our Companys history, having served on
the board of our predecessor Viisage Technology, Inc.
since its initial public offering in 1996. In addition,
Ms. Mouchly-Weiss serves as a member of our Nominating and
Corporate Governance Committee and Marketing Committee.
 5




---



##### 



Name and present position,if any, with the Company
    
    Age, period served as a director, other business experienceClass III DirectorsMilton E. Cooper
    
    72, has served as a director of the Company since August 2006 and
previously served on the board of directors of Identix
Incorporated (Identix) from 2001 through August 2006. Mr.
Cooper is a past Chairperson for the Secretary of the Armys
National Science Center Advisory Board. From 1992 until his
retirement in June 2001, Mr. Cooper served as President, Federal
Sector for Computer Sciences Corporation (CSC), one of the
largest systems integrators for federal government agencies and a
leading supplier of custom software for aerospace and defense
applications. Mr. Cooper joined Systems Group, the predecessor
organization to CSCs Federal Sector, in 1984, as Vice President,
Program Development. Prior to joining CSC, Mr. Cooper served in
various marketing and general management positions at IBM
Corporation, Telex Corporation and Raytheon Company. Mr. Cooper
currently serves as a member of the board of directors of ePlus
Inc., a NASDAQ-listed company that operates technology sales and
financing businesses.Mr. Coopers senior executive role at CSC has provided him with
expertise in federal government contracting in the technology
area. His skills in this area bring a depth of experience to the
Board that is directly applicable to a core business for the
Company. In addition, Mr. Coopers senior-level experience with
the federal government provides him with valuable insights into
the perspective of a vitally important customer. Having served on
the Board of Identix (including as Chairman of the Board) prior
to its merger with our predecessor Viisage Technology, Inc. in
2006, Mr. Cooper has nine years of leadership experience with L-1
companies. In addition, Mr. Cooper serves as a member of our
Compensation Committee, of which he was previously Chairman, and
as a member of our Marketing Committee.Malcolm J. Gudis
    
    69, has served as a director
of the Company since August
2006 and formerly served on
the board of directors of
Identix from 2001 through
August 2006. In 1993, he
retired as Senior Vice
President of Electronic Data
Systems Corporation (EDS),
where he had worked for 22
years. For six of those
years, he served as a member
of EDS Board of Directors,
and for eight of those years,
he served on EDS
eight-person Management
Board. Mr. Gudis also served
as Chief Operating Officer
with responsibility for all
of EDS international and
commercial business interests
outside of North America,
including operations in over
30 countries as well as
worldwide responsibility for
the market segments
comprising the
Communications,
Transportation and Energy &
Petrochemical industries. In
1998, Mr. Gudis was awarded
the first International
Alumni Award by The Max M.
Fisher School of Business at
Ohio State University. He
currently serves on The
Deans Advisory Council at
The Fisher School of Business
at Ohio State University, the
board of trustees of The
Episcopal School of Dallas
where he serves as
Chancellor, and numerous
charitable and business
organizations advisory
boards.Mr. Gudis executive-level
experience at EDS, including
in particular with respect to
its international operations,
provides him with a skill set
that is valuable in light of
the scope of the Companys
international business. Mr.
Gudis brings a substantial
level of financial expertise
to the Board having served as
the Chief Operating Officer
of EDS International and
Global Business interests as
well as on the Board of
Directors of EDS and each of
its independent international
entities. Mr. Gudis served on
the Board of Identix prior to
its merger with our
predecessor Viisage
Technology, Inc. In addition,
Mr. Gudis serves as a member
of our Audit Committee,
Nominating and Corporate
Governance Committee, and the
Special Committee of the
Board of Directors.
 6




---



##### 



Name and present position,if any, with the Company
    
    Age, period served as a director, other business experienceJohn E. Lawler
    
    61, has served as a director of the Company since August
2006 and formerly served on the board of directors of
Identix from June 2002 through August 2006. Mr. Lawler
also served as a director of Visionics Corporation from
December 1999 through June 2002. Mr. Lawler has been
President of East/West Financial Services, Inc., a
diversified financial management and business consulting
firm, since November 1987. He is also a co-founder and
current Chief Executive Officer of Sterling Wealth
Management, Inc., a registered investment advisor, and has
served on its board of directors since October 1999,
currently serving as Chairman. From March 1982 to March
1988, Mr. Lawler served in various executive positions in
Washington D.C. public relations firms, including Gray and
Company, an advertising, public relations and lobbying
firm, for which he served as Chief Financial Officer. From
January 1975 to March 1982, Mr. Lawler served as Chief of
the Office of Finance of the U.S. House of Representatives
in Washington, D.C. Mr. Lawler also serves on the board of
directors of NCI, Inc., a NASDAQ listed government
integrator company and on the Board of Trustees of two
non-profit faith-based endowment funds.Mr. Lawlers experience as Chief of the Office of Finance
of the U.S. House of Representatives, and subsequently at
Washington D.C. public relations firms, has provided him
with in-depth knowledge of federal government
appropriations and legislative procedures that are key to
our business. Mr. Lawler also provides financial expertise
to our Board. He serves as the Chairman of our Audit
Committee, of which he was previously Vice Chairman, and
qualifies as an audit committee financial expert under the
criteria established by the SEC. He also serves as a
member of our Nominating and Governance Committee, and the
Special Committee of the Board of Directors. Mr. Lawler
brings to the Board a depth of experience regarding our
businesses, having served since 1999 on the boards of
companies now affiliated with L-1, including Visionics and
Identix. Additionally, Mr. Lawler holds a top-secret
clearance, which allows additional access and discussion
with certain Company divisions requiring such clearances.
As CEO of Sterling Wealth Management, Inc, an investment
advisory firm, he brings an understanding of investor
relations, analyst reporting, and the perspective of the
investment community. As President of East West Financial
Services, Inc., he remains abreast of important governance
matters for directors of public companies, as a guest
speaker, panelist or participant in symposiums with the
PCAOB, selected major public accounting firms and the
National Association of Corporate Directors.
 7




---



##### 



Name and present position,if any, with the Company
    
    Age, period served as a director, other business experienceB. Boykin Rose
    
    61, has served as a director of the Company since August
2006. Mr. Rose formerly served on the South Carolina
Education Lottery Commission. He is also the former
Director of the South Carolina Department of Public
Safety. In this capacity, his responsibilities included
the State Highway Patrol; the State Transport Police
Division including the Size and Weight Enforcement
Division; the Criminal Justice Academy and Training
Division; the Highway Safety Office; the Division of Motor
Vehicles, which includes the Driver Licensing Division;
Vehicle Registration; Vehicle Titling; Licensing and
Vehicle Enforcement; the Bureau of Protective Services;
and the Office of Justice Programs. Prior to assuming his
Department of Public Safety assignment, Mr. Rose served as
Chairman of the South Carolina Alcoholic Beverage Control
Commission. In the late 1980s, Mr. Rose was a partner in
the Washington, D.C. law firm of Proskauer Rose Goetz and
Mendelsohn. He formerly served as Associate Deputy
Attorney General in the United States Department of
Justice, where his assigned areas of responsibilities
included the United States Attorneys; the Federal Bureau
of Investigation; the Drug Enforcement Administration;
Immigration and Naturalization Service; Bureau of Prisons;
United States Marshal Service, and other sensitive
national security programs of the Department of Justice.
Mr. Rose is a member of the Washington, DC and South
Carolina Bars.Mr. Roses senior level experience in local, state and
federal government provides him with valuable insights in
relation to our secure credentialing and law enforcement
community business, which is dependent upon maintaining
excellent relationships with state and federal agencies.
Mr. Rose provides our Board with perspective of a local,
state and federal government customer. In addition, Mr.
Rose is the Chairman of the Nominating and Corporate
Governance Committee and is a member of the Compensation
Committee and the Special Committee of the Board of
Directors.
 8




---



##### 



EXECUTIVE OFFICERS
  CORPORATE GOVERNANCE
 Corporate Governance Policy
 www.L1id.com
 Code of Business Ethics & Standards of Conduct
 Code www.L1id.com www.L1id.com
 Section 16(a) Beneficial Ownership Reporting Compliance
  Board Committees
  Audit Committee
    Nominating and Corporate Governance Committee
    9




---



##### 



Compensation Committee
    Marketing Committee
  Special Committee of the Board of Directors
  Independent Advisors
  10




---



##### 



Item 11. Executive Compensation
 COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
  REPORT OF THE COMPENSATION COMMITTEE
  Respectfully submitted by the Compensation Committee of the Board of Directors.
 
 The information contained in the foregoing report shall not be deemed to be
filed or to be soliciting material with the Securities and Exchange Commission, nor
shall such information be incorporated by reference into any future filing under the
Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent
that the Company specifically incorporates it by reference in a filing.
 EXECUTIVE OFFICERS
COMPENSATION DISCUSSION AND ANALYSIS
 CEO CFO Named
Executive Officers
 Introduction
   11




---



##### 



Summary of Our Executive Compensation Program
 Program Objectives
  Compensation-Setting and Review Process
  12




---



##### 



Summary of Compensation Actions in 2010 and 2011
 Base Salary Annual Incentive Awards Long-Term Equity
Incentive Awards
 
    
    As previously disclosed in our proxy statement for the 2010
Annual Meeting of Stockholders, in February 2010, the Named
Executive Officers received annual incentive award payouts
under the 2009 Management Incentive Plan. In view of the
Companys actual financial results during 2009, which did
not meet expectations, and taking into account the CEOs
recommendations, the Board of Directors exercised its
discretion to approve payouts in amounts that represented
20% (on average) of targeted award levels, reduced from the
50% (on average) of targeted award levels that would have
been called for by the plan formula based on actual 2009
performance.
    
    The Named Executive Officers did not receive long-term
equity incentive awards in 2010 except for Mr. DAngelo who
received a restricted stock award on February 8, 2010 of
25,000 shares, along with a long-term cash incentive award
of $100,000. Mr. DAngelo also was granted a $150,000
transaction bonus contingent on and payable upon
consummation of the Safran Merger.
    
    The Named Executive Officers did not receive adjustments to
annual base salaries in 2009, 2010 or 2011, except for Mr.
DAngelo, who received an increase in base salary from
$275,000 to $285,000 effective July 1, 2010.
    
    In May 2010, the Board approved target award performance
measures under the 2010 Management Incentive Plan, with
target award opportunities consistent with the employment
arrangements with the Named Executive Officers.
    
    In December 2010, the Board considered and took action
required under the Merger Agreement to mitigate or
eliminate the possibility of the Company incurring
obligations in respect of gross-up payments to Named
Executive Officers relating to excise taxes under section
280G of the Internal Revenue Code in connection with
certain change in control payments to be made to such
officers upon closing of the Safran Merger. In that regard,
the Board determined that it would limit the 2010 annual
incentive awards for each executive to between 25% and 50%
of the targeted amounts and accelerated the payment of 25%
of the target incentive award payments to each of
Mr. LaPenta, Mr. DePalma and Mr. Molina.
    
    In March 2011, the Compensation Committee recommended, and
the Board of Directors approved the final annual incentive
award payouts under the 2010 Management Incentive Plan to
the Named Executive Officers The approved payouts,
including amounts approved in December 2010, represented
41% (on average) of targeted award levels.
 13




---



##### 



Elements of Compensation
  
    
    base salary;
    
    annual incentive awards;
    
    long-term equity and cash incentive awards; and
    
    retirement and other benefits
  Base Salary
   Annual Incentive Awards
 Management Incentive Plan MIP
 Establishment of Target Award Levels
   PRM Competitive Market Analysis
 14




---



##### 



Target Award Performance Measures for 2010
  Management Incentive Plan Performance Components
 Other NamedExecutiveComponent
    
    LaPenta
    
    OfficersRevenue
    
    
    37.5
    %
    
    
    30
    %Adjusted EBITDA
    
    
    37.5
    %
    
    
    30
    %Individual Strategic Goals
    
    
    25
    %
    
    
    30
    %Management Discretion
    
    
    
    
    
    
    10
    %Total
    
    
    100
    %
    
    
    100
    %
  Adjusted EBITDA
  15




---



##### 



50% - 89%
    
    90% - 94%
    
    95% - 99%
    
    100% - 130%Performance Level:
    
    of Target
    
    of Target
    
    of Target
    
    of TargetRevenue
    
    None
    
    50% of Target Award
    
    75% of Target Award
    
    100% - 130% of
Target AwardAdjusted EBITDA
    
    None
    
    50% of Target Award
    
    75% of Target Award
    
    100% - 130% of
Target AwardIndividual Strategic Goals
    
    Discretionary up to
50%
    
    0-50% of Target
Award
    
    0 - 75% of Target Award
    
    100% - 130% of
Target Award
   
    
    Mr. LaPenta  set an appropriate tone at the top for the
Company by building and executing a world-class global
sales and marketing organization, manage strong
relationships with the Board of Directors, maintain a
world-class senior management team and establish a
succession plan for top management.
    
    Mr. DePalma  assist in the assessment of strategic
alternatives, restructure / amend debt facility as market
conditions dictate and strengthen divisional financial
organizations.
    
    Dr. Atick  develop the Middle East and India as a strategic zone. Develop the eGate campaign in Europe.
    
    Mr. Molina  ensure timely and effective legal support throughout the Company, lead strategy and
tactics on the Companys litigation portfolio, effectively manage legal budget, lead legal efforts on
strategic alternative transactions.
    
    Mr. DAngelo  lead preparation and ensure timely filings with SEC, lead financial due diligence
efforts related to strategic alternatives, monitor and support accounting resources throughout the
Company. .
  Award Payouts
   16




---



##### 



2010 Annual Incentive Awards Paid
 Cash
    
    Stock Units
    
    OptionsName
    
    Total Paid
    
    ($)
    
    (#)
    
    (#)Robert V. LaPenta
    
    $
    206,062
    
    
    $
    206,062
    
    
    
    0
    
    
    
    0James A. DePalma
    
    $
    106,650
    
    
    $
    106,650
    
    
    
    0
    
    
    
    0Joseph Atick
    
    $
    108,000
    
    
    $
    108,000
    
    
    
    0
    
    
    
    0Mark S. Molina
    
    $
    93,150
    
    
    $
    93,150
    
    
    
    0
    
    
    
    0Vincent A. DAngelo
    
    $
    63,000
    
    
    $
    63,000
    
    
    
    0
    
    
    
    0
 Long-Term Equity Incentive Awards
    17




---



##### 



Competitive Market Analysis
 Peer Group
 
    
    Ansys, Inc.
    
    Bruker Corporation
    
    Checkpoint Systems, Inc.
    
    Citrix Systems, Inc.
    
    Coherent, Inc.
    
    Daktronics, Inc.
    
    Flir Systems, Inc.
    
    Lawson Software, Inc.
    
    National Instruments Corporation
    
    NCI, Inc.
    
    Nuance Communications, Inc.
    
    OSI Systems, Inc.
    
    Parametric Technology Corporation
    
    Quest Software, Inc.
    
    Rofin Sinar Technologies, Inc.
    
    Tibco Software, Inc.
 18




---



##### 




    
    Human Resource Association of the National Capital Area and
Professional Services Council, Government Contractors Compensation
Survey Report
    
    Mercer, US Benchmark Database  Executive
    
    Radford, Executive Survey Compensation Report
    
    Washington Technical Professional Forum, Compensation Survey Report
    
    Watson Wyatt, Survey Report on Top Management Compensation
 Advisors
  Equity Award Grant Practices
     Retirement and Other Benefits
  19




---



##### 



Employment Arrangements with Our Named Executive Officers
     Rule 10b5-1 Trading Plans
  Tax Policies
  20




---



##### 



Compensation Tables and Narratives
 Summary Compensation Table for 2010
  Non-EquityName and
    
    
    
    
    
    
    
    
    
    
    
    
    
    Stock
    
    Option
    
    Incentive PlanPrincipal
    
    
    
    
    
    Salary
    
    Bonus
    
    Awards
    
    Awards
    
    Compensation
    
    All OtherPositions
    
    Year
    
    ($) (1)
    
    ($) (2)
    
    ($) (3)
    
    ($) (4)
    
    ($) (5)
    
    Comp (6)
    
    TotalRobert V. LaPenta
    
    
    2010
    
    
    $
    785,000
    
    
    
    
    
    
    $
    
    
    
    $
    
    
    
    $
    206,062
    
    
    $
    32,200
    
    
    $
    1,023,262Chairman, CEO & President
    
    
    2009
    
    
    
    785,000
    
    
    
    
    
    
    
    2,320,600
    
    
    
    1,395,453
    
    
    
    100,000
    
    
    
    11,384
    
    
    
    4,612,4372008
    
    
    
    750,000
    
    
    
    
    
    
    
    35,000
    
    
    
    
    
    
    
    200,000
    
    
    
    9,740
    
    
    
    994,740James A. DePalma
    
    
    2010
    
    
    
    395,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    106,650
    
    
    
    15,557
    
    
    
    517,207EVP, CFO &Treasurer
    
    
    2009
    
    
    
    395,000
    
    
    
    
    
    
    
    1,341,050
    
    
    
    807,117
    
    
    
    55,000
    
    
    
    10,832
    
    
    
    2,608,9992008
    
    
    
    381,872
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    110,000
    
    
    
    9,740
    
    
    
    501,612Joseph Atick
    
    
    2010
    
    
    
    400,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    108,000
    
    
    
    10,160
    
    
    
    518,160EVP, Chief Strategic Officer
    
    
    2009
    
    
    
    400,000
    
    
    
    
    
    
    
    1,304,400
    
    
    
    785,577
    
    
    
    50,000
    
    
    
    10,160
    
    
    
    2,550,1372008
    
    
    
    400,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,000
    
    
    
    9,416
    
    
    
    509,416Mark S. Molina
    
    
    2010
    
    
    
    345,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    93,150
    
    
    
    10,352
    
    
    
    448,502EVP, Chief Legal Officer
    
    
    2009
    
    
    
    345,000
    
    
    
    
    
    
    
    906,250
    
    
    
    545,258
    
    
    
    45,000
    
    
    
    10,352
    
    
    
    1,851,860& Secretary
    
    
    2008
    
    
    
    331,872
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    82,500
    
    
    
    9,740
    
    
    
    424,112Vincent A. DAngelo
    
    
    2010
    
    
    
    280,000
    
    
    
    
    
    
    
    183,500
    
    
    
    
    
    
    
    63,000
    
    
    
    12,848
    
    
    
    539,348SVP of Finance, Chief
Accounting Officer
 
 (1)
    
    In 2009 Mr. LaPenta received $750,000 of his base salary in cash
and the payment of the remaining $35,000 was satisfied by the
issuance of 4,749 shares of the Companys common stock on February
9, 2010. In 2008 and 2010 Mr. LaPenta received all of his base
salary in cash.(2)
    
    The Company paid no discretionary bonuses to the Named Executive
Officers for 2010, 2009 or 2008. Payouts under the Companys
Management Incentive Plan for 2010, 2009 and 2008 are reported in
the Non-Equity Incentive Plan Compensation column.(3)
    
    The amount reported in the Stock Awards column (a) for 2009 and
2010 represents the aggregate grant date fair value of the
Restricted Stock Awards granted in 2009 to the Named Executive
Officers, as part of the Long Term Incentive Plan with respect to
their 2008 performance and in connection with the July 2009
employment agreement renewals; and (b) for 2008 represents the
aggregate grant date fair value of a fully vested stock award that
Mr. LaPenta received in lieu of cash, in connection with his 2008
annual base salary increase. The number of shares is computed
using the closing sale price per share of Company common stock as
reported on the NYSE on the date of the approval by the Board of
Directors of the respective award.(4)
    
    The amounts reported in the Option Awards column represent the
aggregate grant date fair value of the stock options granted to
the Named Executive Officers. Pursuant to SEC rules, the amounts
reported exclude the impact of estimated forfeitures related to
service-based vesting conditions. The assumptions made in calculating the
aggregate grant date fair value amounts for the options granted in
2009 are described in note 7 to the Companys consolidated
financial statements as contained in Item 8 of this Annual Report
on Form 10-K filed with the SEC on March 1, 2011.(5)
    
    The amounts reported in the Non-Equity Incentive Plan Compensation
column represent the amounts earned by the Named Executive
Officers for 2010, 2009 and 2008 under the Companys annual
Management Incentive Plan. With respect to Mr. LaPenta, the
indicated amount reported for 2010 was paid in cash and the
indicated amounts 2009 and 2008 represent 13,569 and 27,285 stock
units, respectively, the settlement of which Mr. LaPenta has
deferred on the terms set forth in his employment arrangement.
With respect to Mr. DePalma, the indicated amount reported for
2010 was paid in cash and the indicated amounts for 2009 and 2008
represent 7,463 and 15,007 stock units, respectively, the
settlement of which Mr. DePalma has deferred on the terms set
forth in his employment agreement. Each stock unit settles into
one share of Company common stock upon meeting specified
conditions set forth in the deferral election. The Company
determined the number of shares to be issued to satisfy the awards
as described above based on, the closing sales price per share of
the Companys common stock as reported on the NYSE on the date the
Board of Directors approved such award. With respect to Messrs.
Atick, Molina and DAngelo, the amounts reported for 2010, 2009
and 2008 were paid in cash. The amounts reported are determined in
the year following the year during which the amounts were earned,
except for 2010 for Messrs. LaPenta, DePalma and Molina, for whom
$147,188, $59,250 and $51,750, respectively, of such amounts were
determined in December 2010. For a description of this plan, see
Annual Incentive Awards on page 14 in Item 11.(6)
    
    The amounts reported in the All Other Compensation column
represent (i) the aggregate annual Company contributions to the
accounts of the Named Executive Officers under the Companys
Section 401(k) Retirement Savings Plan, a tax-qualified defined
contribution plan, and (ii) additional premiums paid for executive
life and AD&D insurance. Beginning in April 2008, Company matching
contributions to the Section 401(k) retirement accounts were made
in the form of shares of the Companys common stock for all
participating employees. 21




---



##### 



Grants of Plan-Based Awards Table for 2010
  Estimated
    
    
    
    
    
    All OtherPossible Payouts
    
    
    
    
    
    OptionUnder
    
    All Other
    
    Awards:
    
    ExerciseNon-Equity
    
    Stock Awards
    
    Number of
    
    or Base
    
    Grant DateIncentive
    
    Number of
    
    Securities
    
    Price of
    
    Fair Value ofPlan Awards (1)
    
    Shares of Stock
    
    Underlying
    
    Option
    
    Stock andGrant
    
    Target
    
    Maximum
    
    or Units
    
    Options
    
    Awards
    
    Option AwardsName
    
    Date
    
    ($)
    
    ($)
    
    (#)
    
    (#)
    
    ($/Sh)
    
    ($)Robert V.
LaPenta
    
    
    
    
    
    
    588,750
    
    
    
    765,375James A. DePalma
    
    
    
    
    
    
    237,000
    
    
    
    308,100Joseph Atick
    
    
    
    
    
    
    240,000
    
    
    
    312,000Mark S. Molina
    
    
    
    
    
    
    207,000
    
    
    
    269,100Vincent A. DAngelo
    
    
    
    
    
    
    390,000
    
    
    
    432,000
    
    
    
    25,000
    
    
    
    
    
    
    
    
    
    
    
    183,500
 
 (1)
    
    This column shows the target and maximum annual incentive award
opportunity for each of the Named Executive Officers under the
2010 Management Incentive Plan. The amounts for Mr. DAngelo also
include a long-term cash incentive award of $100,000 granted in
February 2010, which vests annually over a three year period, and
a transaction bonus of $150,000, contingent upon and payable on
the consummation of the Safran Merger. The 2010 Management
Incentive Plan does not provide a minimum guaranteed payment. The
target award was 75% of base salary earned for the year as
provided by Mr. LaPentas employment agreement, 60% of base salary
earned for the year as provided by each of Messrs. DePalmas,
Aticks and Molinas employment agreement and 50% as provided by
Mr. DAngelos offer letter. The actual amounts paid to the Named
Executive Officers under the 2010 Management Incentive Plan are as
follows: Mr. LaPenta  $206,062, Mr. DePalma  $106,650,
Dr. Atick  $108,000, Mr. Molina  $93,150, and Mr. DAngelo 
$63,000. Also, Mr. DAngelo was paid $33,333 in February 2011
representing one-third of the long-term cash incentive award that
vested. Narrative to Summary Compensation Table and Grants of Plan-Based Awards Table
  1.
    
    Term. For three years ending on August 29, 2012, with
automatic one-year extensions unless either party gives 90 days
advance written notice of non-renewal. Mr. DAngelos offer
letter does not have a fixed term.2.
    
    Compensation and Benefits. During the term of the agreement,
the respective Named Executive Officers are eligible to receive
the following compensation:
 a.
    
    Base Salary. An initial base salary of $785,000 for
Mr. LaPenta, $395,000 for Mr. DePalma, $400,000 for
Mr. Atick, $345,000 for Mr. Molina and $225,000 for
Mr. DAngelo that was subsequently increased to
$285,000 on July 1, 2010. Such base salaries may be
adjusted by the Board of Directors in its discretion.
Each annual review will occur after the Companys
year-end results have become available, with any
increases in base salary being retroactive to
January 1. Each of the Named Executive Officers will
receive a lump sum payment in respect of any
retroactive adjustments. At the time of the July 2009
employment agreement amendments the
 22




---



##### 



Compensation
Committee considered the recommendations of our CEO
with respect to base salary increases for the Named
Executive Officers, but elected to postpone taking
action on such recommendations until February 2010,
except for Mr. DAngelo whose salary was adjusted in
2010. No adjustments have taken place since August
2008.
 b.
    
    Non-Equity Incentive Plan Compensation. An annual
bonus with a target payout equal to 75% of base salary
for Mr. LaPenta, 60% of base salary for Messrs.
DePalma, Atick and Molina and 50% for Mr. DAngelo,
with the actual payout (which can be more or less than
target) determined by the Board of Directors in its
discretion, based on the achievement of corporate and
individual objectives determined by the Board of
Directors. Any annual bonus payable to Messrs. LaPenta
and DePalma may be paid in stock units at the election
of such executive. If paid in stock units, each of
Mr. LaPenta and Mr. DePalma have elected to defer the
settlement of such units as permitted in his
respective employment agreement. Each stock unit
settles into one share of the Companys common stock.
The 2010 bonus for Messrs. LaPenta and DePalma was
paid in cash.c.
    
    Additional Benefits. Participation in the Companys
health, welfare, and fringe benefit programs for
management employees, and reimbursement of all
reasonable expenses incurred by the Named Executive
Officer in his performance of services on behalf of
the Company.d.
    
    Equity Compensation. Awards of equity-based
compensation during the term are at the discretion of
the Board of Directors.
 3.
    
    Termination. Under specified circumstances, the Named
Executive Officer or the Company may terminate his employment
prior to the end of the term of the agreement. These
circumstances, and any payments and benefits triggered by the
termination, are described under Potential Payments Upon
Termination or Change in Control on pages 27-36 in Item 11.4.
    
    Additional Provisions. Messrs. LaPenta and DePalma are
permitted to continue to oversee the Aston Capital Partners L.P.
investment fund and, with respect to each of Mr. LaPenta and
Mr. DePalma, their respective investments in Core Software
Technology Corporation.
 23




---



##### 



Outstanding Equity Awards at Fiscal Year-End Table for 2010
  Option Awards
    
    Restricted Stock AwardsNumber of
    
    Number of
    
    
    
    
    
    
    
    
    
    Number of
    
    Market ValueSecurities
    
    Securities
    
    
    
    
    
    
    
    
    
    Shares or
    
    of Shares orUnderlying
    
    Underlying
    
    
    
    
    
    
    
    
    
    Units of
    
    Units ofUnexercised
    
    Unexercised
    
    Option
    
    Option
    
    Stock That
    
    Stock ThatOptions (#)
    
    Options (#)
    
    Exercise
    
    Expiration
    
    Have Not
    
    Have NotName
    
    Exercisable
    
    Unexercisable
    
    Price ($)
    
    Date
    
    Vested (#)
    
    Vested ($) (6)Robert V. LaPenta7/21/06
    
    
    2,500
    
    
    
    
    
    
    
    16.14
    
    
    
    7/21/168/29/06
    
    
    315,000
    
    
    
    
    
    
    
    14.55
    
    
    
    8/29/164/3/07
    
    
    15,132
    (2)
    
    
    
    
    
    
    16.85
    
    
    
    4/3/125/9/07
    
    
    50,000
    
    
    
    25,000
    (1)
    
    
    20.01
    
    
    
    5/9/1710/30/07
    
    
    85,000
    
    
    
    42,500
    (1)
    
    
    18.00
    
    
    
    10/30/1711/2/07
    
    
    15,000
    
    
    
    7,500
    (1)
    
    
    18.46
    
    
    
    11/2/172/10/09
    
    
    17,500
    
    
    
    52,500
    (1)
    
    
    7.33
    
    
    
    2/10/19
    
    
    
    40,500
    (5)
    
    
    482,3559/8/09
    
    
    62,500
    
    
    
    187,500
    (1)
    
    
    7.23
    
    
    
    9/8/19
    
    
    
    187,500
    (5)
    
    
    2,233,125James A. DePalma8/29/06
    
    
    180,000
    
    
    
    
    
    
    
    14.55
    
    
    
    8/29/164/3/07
    
    
    8,930
    (2)
    
    
    
    
    
    
    16.85
    
    
    
    4/3/125/9/07
    
    
    45,000
    
    
    
    15,000
    (1)
    
    
    20.01
    
    
    
    5/9/1710/30/07
    
    
    45,000
    
    
    
    15,000
    (1)
    
    
    18.00
    
    
    
    10/30/1711/2/07
    
    
    11,250
    
    
    
    3,750
    (1)
    
    
    18.46
    
    
    
    11/2/172/10/09
    
    
    8,750
    
    
    
    26,250
    (1)
    
    
    7.33
    
    
    
    2/10/19
    
    
    
    21,250
    (5)
    
    
    253,0889/8/09
    
    
    37,500
    
    
    
    112,500
    (1)
    
    
    7.23
    
    
    
    9/8/19
    
    
    
    112,500
    (5)
    
    
    1,339,875Joseph Atick(3)6/25/02
    
    
    212,850
    
    
    
    
    
    
    
    13.09
    
    
    
    6/25/124/23/03
    
    
    42,570
    
    
    
    
    
    
    
    10.02
    
    
    
    4/23/134/28/04
    
    
    7,007
    
    
    
    
    
    
    
    14.27
    
    
    
    4/28/144/28/04
    
    
    30,832
    
    
    
    
    
    
    
    14.27
    
    
    
    4/28/141/26/05
    
    
    8,183
    
    
    
    
    
    
    
    12.22
    
    
    
    1/26/151/26/05
    
    
    58,036
    
    
    
    
    
    
    
    12.22
    
    
    
    1/26/158/29/06
    
    
    26,808
    
    
    
    
    
    
    
    14.55
    
    
    
    8/29/168/29/06
    
    
    173,192
    
    
    
    
    
    
    
    14.55
    
    
    
    8/29/164/3/07
    
    
    8,269
    (2)
    
    
    
    
    
    
    16.85
    
    
    
    4/3/175/9/07
    
    
    37,500
    
    
    
    12,500
    (1)
    
    
    20.01
    
    
    
    5/9/1710/30/07
    
    
    15,000
    
    
    
    5,000
    (1)
    
    
    18.00
    
    
    
    10/30/172/12/08
    
    
    12,082
    (4)
    
    
    
    
    
    
    13.25
    
    
    
    2/12/182/10/09
    
    
    7,500
    
    
    
    22,500
    (1)
    
    
    7.33
    
    
    
    2/10/19
    
    
    
    22,500
    (5)
    
    
    267,9759/8/09
    
    
    37,500
    
    
    
    112,500
    (1)
    
    
    7.23
    
    
    
    9/8/19
    
    
    
    112,500
    (5)
    
    
    1,339,875
 24




---



##### 



Option Awards
    
    Restricted Stock AwardsNumber of
    
    Number of
    
    
    
    
    
    
    
    
    
    Number of
    
    Market ValueSecurities
    
    Securities
    
    
    
    
    
    
    
    
    
    Shares or
    
    of Shares orUnderlying
    
    Underlying
    
    
    
    
    
    
    
    
    
    Units of
    
    Units ofUnexercised
    
    Unexercised
    
    Option
    
    Option
    
    Stock That
    
    Stock ThatOptions (#)
    
    Options (#)
    
    Exercise
    
    Expiration
    
    Have Not
    
    Have NotName
    
    Exercisable
    
    Unexercisable
    
    Price ($)
    
    Date
    
    Vested (#)
    
    Vested ($) (6)Mark S. Molina(3)7/26/01
    
    
    5,912
    
    
    
    
    
    
    
    10.04
    
    
    
    7/26/117/26/01
    
    
    17,737
    
    
    
    
    
    
    
    10.04
    
    
    
    7/26/116/25/02
    
    
    33,110
    
    
    
    
    
    
    
    13.09
    
    
    
    6/25/124/23/03
    
    
    14,190
    
    
    
    
    
    
    
    10.02
    
    
    
    4/23/132/4/04
    
    
    28,380
    
    
    
    
    
    
    
    11.14
    
    
    
    2/4/145/13/04
    
    
    3,049
    
    
    
    
    
    
    
    13.32
    
    
    
    5/13/145/13/04
    
    
    53,710
    
    
    
    
    
    
    
    13.32
    
    
    
    5/13/141/26/05
    
    
    2,365
    
    
    
    
    
    
    
    12.22
    
    
    
    1/26/151/26/05
    
    
    7,095
    
    
    
    
    
    
    
    12.22
    
    
    
    1/26/158/29/06
    
    
    26,808
    
    
    
    
    
    
    
    14.55
    
    
    
    8/29/168/29/06
    
    
    123,192
    
    
    
    
    
    
    
    14.55
    
    
    
    8/29/164/3/07
    
    
    4,135
    (2)
    
    
    
    
    
    
    16.85
    
    
    
    4/3/125/9/07
    
    
    22,500
    
    
    
    7,500
    (1)
    
    
    20.01
    
    
    
    5/9/1710/30/07
    
    
    37,500
    
    
    
    12,500
    (1)
    
    
    18.00
    
    
    
    10/30/172/12/08
    
    
    6,041
    (4)
    
    
    
    
    
    
    13.25
    
    
    
    2/12/182/10/09
    
    
    6,250
    
    
    
    18,750
    (1)
    
    
    7.33
    
    
    
    2/10/19
    
    
    
    18,750
    (5)
    
    
    223,3139/8/09
    
    
    25,000
    
    
    
    75,000
    (1)
    
    
    7.23
    
    
    
    9/8/19
    
    
    
    75,000
    (5)
    
    
    893,250Vincent A. DAngelo12/8/06
    
    
    70,000
    
    
    
    
    
    
    
    16.43
    
    
    
    12/8/164/3/07
    
    
    4,135
    (2)
    
    
    
    
    
    
    16.85
    
    
    
    4/3/125/9/07
    
    
    22,500
    
    
    
    7,500
    (1)
    
    
    20.01
    
    
    
    5/9/1710/30/07
    
    
    11,250
    
    
    
    3,750
    (1)
    
    
    18.00
    
    
    
    10/30/1711/2/07
    
    
    7,500
    
    
    
    2,500
    (1)
    
    
    18.46
    
    
    
    11/2/172/12/08
    
    
    6,041
    (4)
    
    
    
    
    
    
    13.25
    
    
    
    2/12/182/10/09
    
    
    5,000
    
    
    
    15,000
    (1)
    
    
    7.33
    
    
    
    2/10/19
    
    
    
    15,000
    (5)
    
    
    178,6502/9/10
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,000
    (5)
    
    
    297,750
 
 (1)
    
    These options vest (become exercisable) in four equal annual installments, beginning on the first anniversary of the date of grant.(2)
    
    These options were granted in connection with the satisfaction of award payouts under the 2006 Management Incentive Plan.(3)
    
    Grant dates prior to August 29, 2006 for Dr. Atick and Mr. Molina represent option awards attributable to such executives service
with Identix prior to the merger of Viisage and Identix. These option awards are fully exercisable as a result of accelerated
vesting triggered by the merger. The Company assumed these options in the merger.(4)
    
    These options were granted in connection with the satisfaction of award payouts under the 2007 Management Incentive Plan.(5)
    
    Restricted stock awards vest (become transferable) in four equal annual installments, beginning on the first anniversary of the
date of award. Each employment arrangement, other than as applicable to Mr. DAngelo, provides for an additional payment
to compensate the executive officer for any excise tax incurred by such executive officer under Section 4999 of the Code. In the
Merger Agreement, Safran and the Company agreed to cooperate, and the Company agreed to take all actions reasonably requested by
Safran, on or prior to December 31, 2010, as are necessary to reduce and/or avoid the application of Section 280G of the Code to
the payments to be made to such executive officers. Pursuant to such obligations, our board of directors took action prior to the
end of 2010 to accelerate the vesting of 12,000 and 5,000 restricted shares held by Mr. LaPenta and Mr. DePalma, respectively,
which restricted shares would have in the ordinary course become vested in February 2011.(6)
    
    Market value is based on the closing sales price of the Companys common stock on the NYSE on December 31, 2010 (the last trading
date of the fiscal year) which was $11.91 per share. 25




---



##### 



Option Exercise and Restricted Stock Vested for 2010
  Option Awards
    
    Restricted Stock AwardsNumber of
    
    
    
    
    
    Number ofShares
    
    Value
    
    Shares
    
    ValueReceived on
    
    Realized on
    
    Received on
    
    Assigned onName
    
    Exercise (#)
    
    Exercise ($)
    
    Vesting (#)
    
    Vesting ($)Robert V. LaPenta2/10/10
    
    
    
    
    
    
    
    
    
    
    17,500
    
    
    
    136,3259/8/10
    
    
    
    
    
    
    
    
    
    
    62,500
    
    
    
    563,75012/30/10
    
    
    
    
    
    
    
    
    
    
    12,000
    
    
    
    142,860James A. DePalma2/10/10
    
    
    
    
    
    
    
    
    
    
    8,750
    
    
    
    68.1639/8/10
    
    
    
    
    
    
    
    
    
    
    37,500
    
    
    
    338,25012/30/10
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    59,525Joseph Atick2/10/10
    
    
    
    
    
    
    
    
    
    
    7,500
    
    
    
    58,4259/8/10
    
    
    
    
    
    
    
    
    
    
    37,500
    
    
    
    338,250Mark S. Molina2/10/10
    
    
    
    
    
    
    
    
    
    
    6,250
    
    
    
    48,6889/8/10
    
    
    
    
    
    
    
    
    
    
    25,000
    
    
    
    225,500Vincent A. DAngelo2/10/10
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    38,950
 Pension Benefits Table for 2010
  Nonqualified Deferred Compensation Table for 2010
   Executive
    
    Companys
    
    Aggregate
    
    AggregateName
    
    Plan
    
    Contributions (1)
    
    Contributions
    
    Earnings (Loss) (2)
    
    Balance (3)Robert V. LaPenta
    
    Election to Defer  Annual Incentive  Award
    
    $
    
    
    
    $
    
    
    
    $
    197,939
    
    
    $
    798,429James A. DePalma
    
    Election to Defer Annual Incentive Award
    
    $
    
    
    
    $
    
    
    
    $
    109,413
    
    
    $
    440,610
 
 (1)
    
    No bonus was deferred in 2011 with respect to 2010 annual incentive awards.(2)
    
    The amounts reported in this column reflect the increase (or decrease)
during 2010 in the market value of the shares of the Companys common
stock underlying the deferred stock units that were determined in 2008
(with respect to 2007 annual incentive awards), in 2009 (with respect to
2008 annual incentive awards) and in 2010 (with respect to 2009 annual
incentive awards).(3)
    
    The amounts reported in this column reflect the market value, as of
December 31, 2010, of the shares of the Companys common stock underlying
the deferred amounts that were determined in 2008 (with respect to 2007
annual incentive awards), in 2009 (with respect to 2008 annual incentive
awards) and in 2010 (with respect to 2009 annual incentive awards). For
Mr. LaPenta, the deferral amounts with respect to the incentive award plan
year were: $91,500 (2006), $275,000 (2007), $200,000 (2008) and $100,000
(2009). For Mr. DePalma, the deferral amounts with respect to the
incentive award plan year were: $54,000 (2006), $150,000 (2007), $110,000
(2008) and $55,000 (2009). The number of deferred stock units is 26




---



##### 



calculated using the closing per share price of Company common stock on
the NYSE on the day the Board of Directors approves each respective annual
incentive award. Potential Payments Following Termination or Change in Control
    Messrs. LaPenta and DePalma:
 Termination of Employment.
 
    
    by a majority vote of the independent members of the Companys Board of
Directors with Cause (as defined) or without Cause;
    
    in the event of the death or disability of the executive; or
    
    by the executives resignation for Good Reason (as defined) or for no reason.
 Termination with Cause or Resignation without Good Reason.
 
    
    payments of base salary, any awarded but unpaid annual
incentive award for any prior completed fiscal year, and
expense reimbursement that had accrued but had not been
paid prior to the date of termination;
    
    payments for any accrued but unused vacation time; and
    
    any benefits due through the date of termination as
provided under the Companys compensation or benefit
plans.
  27




---



##### 




    
    a material change in the executives duties, a material
diminution in the executives position, authority, title, or
responsibilities or any change in reporting relationship, or a
relocation of his principal base of operations to more than
25 miles from Stamford, Connecticut;
    
    a reduction in his base salary or target annual incentive award;
    
    the Companys failure to maintain a material compensation or
benefit plan in which he participates (unless a substitute or
alternative plan is made available), continue the executives
participation in these plans on a basis that is materially
equal to his current participation, obtain comparable
compensation and benefits and termination arrangements from a
successor to the Company, to pay compensation and benefit
amounts within seven days of the date such compensation or
benefits are due;
    
    the Companys failure to obtain the agreement from any
successor to the Company to continue to provide the
compensation and termination benefits provided for in the
agreement; or
    
    any other material breach of the employment agreement.
 Termination without Cause or Resignation for Good Reason.
 
    
    the payments and benefits described in the section concerning termination with Cause or Resignation without
Good Reason;
    
    an amount equal to 24 months of the executives base salary at the rate in effect at the date of termination;
    
    an amount equal to the bonus awarded to the executive for the most recent completed calendar year for which
a bonus was determined by the Board of Directors and, if the executive was terminated following the end of a
completed calendar year but prior to the determination of the bonus, a bonus in an amount equal to the
target level bonus for that calendar year;
    
    accelerated vesting of all outstanding but unvested stock options, which will remain exercisable for a
period of 36 months after termination, subject to the maximum original term of such options, and the lapse
of all restrictions on stock based awards (such as restricted stock awards); and
    
    for a 12-month period, COBRA payments or an amount equivalent to COBRA payments required to continue his
medical, dental and vision benefits, unless earlier provided by a successor employer, and premium payments
or an amount equivalent to the then existing premiums on the executives term life insurance.
  Death or Disability.
 Non-Renewal .
 Change in Control.
  
    
    an acquisition of 50% or more of (i) the then-outstanding common stock or (ii) the combined
voting power of the then-outstanding securities entitled to vote for directors by any person
(but not including a restructuring or recapitalization by the Company or an acquisition by a
Company-sponsored employee benefit plan);
 28




---



##### 




    
    a time when the continuing directors (that is, the directors who were serving when the
employment agreement was executed or their duly recommended or endorsed successors) do not
constitute a majority of the Board of Directors;
    
    a business combination (such as a merger, consolidation, reorganization, or sale of all or
substantially all of the Companys assets), unless, following the business combination, the
beneficial owners of the Companys securities continue to beneficially own a majority of the
outstanding securities of the resulting entity and this ownership is substantially in the same
proportion as their ownership before the transaction; or
    
    approval by the Companys stockholders of a complete liquidation or dissolution of the Company.
 Tax Reimbursement Arrangements.
 Conditions to Payment.
 Executive Covenants.
  Dr. Atick
 Termination of Employment.
 
    
    by the Company for Cause (as defined) or without Cause;
    
    in the event of his death or disability; or
    
    upon his resignation for Good Reason (as defined) or for no reason (defined as a Voluntary Termination).
 Termination for Cause or Voluntary Termination.
 
    
    all accrued but unpaid base salary to the effective date of termination; and
    
    any benefits due through the date of termination as required by law or to
the extent required under the Companys benefit plans and any reimbursement
of expenses incurred as of the effective date of termination in accordance
with Company policy.
  Termination Other Than For Cause; Resignation for Good Reason or Failure
to Renew Employment Agreement.
 29




---



##### 




    
    all earned but unpaid base salary, all awarded but unpaid bonus and all accrued but unpaid vacation pay
to the effective date of termination;
    
    an amount equal to 24 months of Dr. Aticks base salary at the rate in effect at the date of termination;
    
    an amount equal to the bonus awarded to Dr. Atick for the most recent completed calendar year for which
a bonus was determined by the Board of Directors and, if Dr. Atick was terminated following the end of a
completed calendar year but prior to the determination of the bonus for that calendar year, an amount
equal to the target level bonus for that calendar year;
    
    accelerated vesting of all outstanding but unvested stock options, which will remain exercisable for a
period of 36 months after the termination, subject to the maximum original term of such options, and the
lapse of all restrictions on stock-based awards (such as restricted stock awards); and
    
    for a 12-month period, COBRA payments or an amount equivalent to COBRA payments to continue his medical,
dental and vision benefits, subject to a shorter period if provided by a successor employer, and premium
payments or an amount equivalent to then-existing premiums on Dr. Aticks term life insurance.
  Change in Control.
  
    
    if any person is or becomes the beneficial owner, directly
or indirectly, of securities of the Company representing
50% or more of the combined voting power of the Companys
then outstanding securities;
    
    the election to a majority of the seats of the Board of
Directors of the Company of candidates who were not
proposed by a majority of the Board of Directors in office
prior to the time of such election; or
    
    the dissolution or liquidation (partial or total) of the
Company or a sale of assets involving fifty percent (50%)
or more of the assets of the Company and its subsidiaries
taken as a whole (other than the disposition of a
subsidiary), or a merger, reorganization or other
transaction or series of related transactions pursuant to
which the holders, as a group, of all of the shares of the
Company outstanding after the merger, reorganization or
other transaction hold, as a group, less than fifty
percent (50%) of the shares of the Company outstanding
after the merger, reorganization or other transaction.
 Death or Disability.
 Mr. Molina
 Termination of Employment.
 
    
    by the Company for Cause (as defined) or without Cause;
    
    in the event of his death or disability; or
    
    upon his resignation for Good Reason (as defined) or for no reason (defined as a Voluntary Termination).
 30




---



##### 



Termination for Cause and Voluntary Termination.
 
    
    all accrued but unpaid base salary, and all accrued but
unpaid vacation pay to the effective date of termination;
and
    
    any benefits due through the date of termination to the
extent required under the Companys benefit plans or any
reimbursement of expenses incurred as of the effective
date of termination in accordance with Company policy.
  Termination Other Than For Cause; Resignation for Good Reason or Failure
to Renew Employment Agreement.
 
    
    all earned but unpaid base salary, all awarded but unpaid bonus and all accrued but unpaid
vacation pay to the effective date of termination;
    
    an amount equal to 24 months of Mr. Molinas base salary in effect at the date of termination;
    
    an amount equal to the bonus awarded to Mr. Molina for the most recent completed calendar
year for which a bonus was determined by the Board of Directors and, if Mr. Molina was
terminated following the end of a completed calendar year but prior to the determination of
the bonus for that calendar year, an amount equal to the target level bonus for that calendar
year;
    
    accelerated vesting of all outstanding but unvested stock options, which will remain
exercisable for a period of 36 months after the termination, subject to the maximum original
term of such options, and the lapse of all restrictions on stock-based awards (such as
restricted stock awards); and
    
    for a 12-month period, COBRA payments or an amount equivalent to COBRA payments to continue
his medical, dental and vision benefits, subject to a shorter period if provided by a
successor employer, and premium payments or an amount equivalent to then-existing premiums on
Mr. Molinas term life insurance.
  Change in Control.
  
    
    if any person is or becomes the beneficial owner, directly
or indirectly, of securities of the Company representing
50% or more of the combined voting power of the Companys
then outstanding securities;
    
    the election to a majority of the seats of the Board of
Directors of the Company of candidates who were not
proposed by a majority of the Board of Directors in office
prior to the time of such election; or
    
    the dissolution or liquidation (partial or total) of the
Company or a sale of assets involving fifty percent (50%)
or more of the assets of the Company and its subsidiaries
taken as a whole (other than the disposition of a
subsidiary), or a merger, reorganization or other
transaction or series of related transactions pursuant to
which the holders, as a group, of all of the shares of the
Company outstanding after the merger, reorganization or
other transaction hold, as
 31




---



##### 



a group, less than fifty
percent (50%) of the shares of the Company outstanding
after the merger, reorganization or other transaction.
 Death or Disability.
 Mr. DAngelo
 Termination of Employment.
 
    
    by the Company for Cause (as defined) or without Cause;
    
    in the event of his death or disability; or
    
    upon his resignation for Good Reason (as defined) or for no reason (defined as a Voluntary Termination).
 Termination for Cause and Voluntary Termination.
 
    
    all accrued but unpaid base salary, and all accrued but
unpaid vacation pay to the effective date of termination;
and
    
    any benefits due through the date of termination to the
extent required under the Companys benefit plans or any
reimbursement of expenses incurred as of the effective
date of termination in accordance with Company policy.
  Termination Other Than For Cause; Resignation for Good Reason .
 
    
    all earned but unpaid base salary, all awarded but unpaid bonus and all accrued but unpaid
vacation pay to the effective date of termination;
    
    an amount equal to 12 months of Mr. DAngelos base salary in effect at the date of termination;
    
    for a 12-month period, COBRA payments or an amount equivalent to COBRA payments to continue his
medical, dental and vision benefits, subject to a shorter period if provided by a successor
employer, and premium payments or an amount equivalent to then-existing premiums on
Mr. DAngelos term life insurance.
  Change in Control.
  
    
    if any person is or becomes the beneficial
owner of securities of the Company
representing 50% or more of the combined
voting power of the Companys then
outstanding securities;
    
    Individuals representing the incumbent board, or
individuals approved by a majority of the incumbent board, cease for any reason to constitute at least a majority
of the board of directors of the Company;
    
    Approval by the stockholders of a merger or
consolidation of the Company (i) other than a merger or
consolidation that would result in voting securities
outstanding immediately prior thereto continuing to
represent more than 50% of the combined voting securities
of the Company or such surviving entity immediately prior
to such merger or consolidation or (ii)a merger or
consolidation effected to implement a recapitalization of
the Company in which no person acquires more than 50% of
the companys outstanding voting securities, and
    
    Approval by stockholders of the Company of
(i) a complete or substantial liquidation
or dissolution of the Company or (ii) the
sale or disposition of all or
substantially all of the assets of the
Company.
 32




---



##### 



Potential Payments and Benefits Upon a Termination of Employment
or a Change in Control of the Company for Mr. LaPenta
 Termination without
    
    
    
    
    
    
    In connection withCause or
    
    
    
    
    
    
    aResignation
    
    
    Death or
    
    
    Change in ControlExecutive Payments and Benefits (1)
    
    for Good Reason (2)
    
    
    Disability
    
    
    of the Company (2)Accelerated vesting:Stock options (3)
    
    $
    1,117,950
    
    
    $
    1,117,950
    
    
    $
    1,117,950Restricted stock(3)
    
    $
    2,715,480
    
    
    $
    2,715,480
    
    
    $
    2,715,480Severance payment (4)
    
    $
    1,670,000
    
    
    $
    1,670,000
    
    
    $
    1,670,000Continued medical and dental coverage
    
    $
    14,616
    
    
    $
    14,616
    
    
    $
    14,616Tax liability amount (5)
    
    
    
    
    
    
    
    
    
    
    TOTAL: (5)
    
    $
    5,518,046
    
    
    $
    5,518,046
    
    
    $
    5,518,046
 
 (1)
    
    For purposes of this analysis, we have assumed the executives
compensation is as follows: current base salary equal to $785,000,
a targeted annual incentive award opportunity equal to 75% of his
base salary, and outstanding stock option awards as reflected in
the Outstanding Equity Awards at Fiscal Year-End Table for 2010,
on page 24 of this Item 11.(2)
    
    Assumes the executives date of termination of employment was
December 31, 2010. The market price of the Companys common stock
on December 31, 2010 (the last trading date of the fiscal year)
was $11.91 per share. To the extent the market price of the
Companys common stock exceeds, or is less than, $11.91 per share
upon an applicable termination of employment, the value of any
acceleration of vesting of stock options and restricted stock
awards will be correspondingly greater or less, as the case may
be. The same benefits and amounts will be payable upon a failure
to renew the agreement prior to the expiration of the term of the
agreement.(3)
    
    Represents the excess of $11.91 over the exercise price of in the
money options. For the purposes of this analysis we have assumed
the immediate acceleration of all outstanding unvested stock
options and the lapse of restrictions on all restricted stock
awards upon a change-in-control. All outstanding stock options
will remain exercisable for a period of three years from the date
of termination of employment, subject to the maximum original term
of such options. This extension of the post-termination exercise
period has not been separately valued for purposes of this
disclosure.(4)
    
    The amount shown for Severance represents 24 months base salary,
plus an amount equal to the bonus paid to Mr. LaPenta for 2009
performance (the last completed fiscal year as of December 31,
2010). However if the Merger is consummated in 2011 the actual
payment will be based on the 2010 incentive award of $206,062
rather than the 2009 incentive award of $100,000. Fifty percent of
this payment is to be made five business days after the
termination date, with the remainder to be paid on the next
business day following the six month anniversary of the
termination date.(5)
    
    Assumes a termination of employment without Cause or for Good
Reason (each as defined in the employment agreement). Upon an
actual termination of employment, tax liability amounts would
change to reflect base salary and bonus amounts then applicable,
and would reflect the then-applicable value of the accelerated
vesting of stock-based awards. The calculation of the potential
tax liability amount is based on the value of the accelerated
vesting of stock-based awards at a price per share of Company
common stock of $11.91. In addition, for purposes of calculating
the potential tax liability we have considered Mr. LaPentas
taxable income for the years 2006 to 2010 as reflected in his W-2,
which reflects the impact of the actions taken by the Board at its
December 30, 2010 meeting to eliminate the potential tax
liability. Had the potential tax liability amount been determined
based on Mr. LaPentas taxable income for the years 2005 to 2009
the hypothetical tax liability amount would have been $933,813 and
the total payments would have been $6,451,869. Potential Payments and Benefits Upon a Termination of Employment
or a Change in Control of the Company for Mr. DePalma
 Termination without
    
    
    
    
    
    
    In connection withCause or
    
    
    
    
    
    
    a Change inResignation
    
    
    Death or
    
    
    ControlExecutive Payments and Benefits (1)
    
    for Good Reason (2)
    
    
    Disability
    
    
    of the Company (2)Accelerated vesting:Stock options (3)
    
    $
    646,725
    
    
    $
    646,725
    
    
    $
    646,725Restricted stock(3)
    
    $
    1,592,963
    
    
    $
    1,592,963
    
    
    $
    1,592,963Severance payment (4)
    
    $
    845,000
    
    
    $
    845,000
    
    
    $
    845,000Continued medical and dental coverage
    
    $
    14,616
    
    
    $
    14,616
    
    
    $
    14,616Tax liability amount (5)
    
    
    
    
    
    
    
    
    
    
    TOTAL:(5)
    
    $
    3,099,304
    
    
    $
    3,099,304
    
    
    $
    3,099,304
 33




---



##### 



(1)
    
    For purposes of this analysis, we have assumed the executives
compensation is as follows: current base salary equal to $395,000,
a targeted annual incentive award opportunity equal to 60% of his
base salary, and outstanding stock option awards as reflected in
the Outstanding Equity Awards at Fiscal Year-End Table for 2010,
on page 24 of this Item 11.(2)
    
    Assumes the executives date of termination of employment was
December 31, 2010. The market price of the Companys common stock
on December 31, 2010 (the last trading date of the fiscal year)
was $11.91 per share. To the extent the market price of the
Companys common stock exceeds, or is less than, $11.91 per share
upon an applicable termination of employment, the value of any
acceleration of vesting of stock options and restricted stock
awards will be correspondingly greater or less, as the case may
be. The same benefits and amounts will be payable upon a failure
to renew the agreement prior to the expiration of the term of the
agreement.(3)
    
    Represents the excess of $11.91 over the exercise price of in the
money options. For the purposes of this analysis we have assumed
the immediate acceleration of all outstanding unvested stock
options and the lapse of all restrictions on restricted stock
awards upon a change-in-control. All outstanding stock options
will remain exercisable for a period of three years from the date
of termination of employment, subject to the maximum original term
of such options. This extension of the post-termination exercise
period has not been separately valued for purposes of this
disclosure.(4)
    
    The amount shown for Severance represents 24 months base salary,
plus an amount equal to the bonus paid to Mr. DePalma for 2009
performance (the last completed fiscal year as of December 31,
2010). However if Merger is consummated in 2011 the actual payment
will be based on the 2010 incentive award of $106,500 rather than
the 2009 incentive award of $55,000. Fifty percent of this payment
is to be made five business days after the termination date, with
the remainder to be paid on the next business day following the
six month anniversary of the termination date.(5)
    
    Assumes a termination of employment without Cause or for Good
Reason (each as defined in the employment agreement). Upon an
actual termination of employment, tax liability amounts would
change to reflect base salary and bonus amounts then applicable,
and would reflect the then-applicable value of the accelerated
vesting of stock-based awards. The calculation of the potential
tax liability amount is based on the value of the accelerated
vesting of stock-based awards at a price per share of Company
common stock of $11.91. In addition, for purposes of calculating
the potential tax liability amount we have considered Mr.
DePalmas taxable income for the years 2006 to 2010 as reflected
in his W-2, which reflects the impact of actions taken by the
Board at the December 2010 meeting. Had the potential tax
liability been determined based on Mr. DePalmas taxable income
for the years 2005 to 2009 the hypothetical tax liability amount
would have been $500,966 and the total payments would have been
$3,600,270. Potential Payments and Benefits Upon a Termination of Employment
or a Change in Control of the Company for Dr. Atick
 Termination without
    
    
    
    
    
    
    In connection withCause or
    
    
    
    
    
    
    a Change inResignation
    
    
    Death or
    
    
    ControlExecutive Payments and Benefits (1)
    
    for Good Reason (2)
    
    
    Disability
    
    
    of the Company (2)Accelerated vesting:Stock options (3)
    
    $
    629,550
    
    
    $
    629,550
    
    
    $
    629,550Restricted stock (3)
    
    $
    1,607,850
    
    
    $
    1,607,850
    
    
    $
    1,607,850Severance payment (4)
    
    $
    850,000
    
    
    $
    850,000
    
    
    $
    850,000Continued medical and dental coverage
    
    $
    6,828
    
    
    $
    6,828
    
    
    $
    6,828Tax liability amounts (5)
    
    
    
    
    
    
    
    
    
    
    TOTAL:
    
    $
    3,094,228
    
    
    $
    3,094,228
    
    
    $
    3,094,228
 
 (1)
    
    For purposes of this analysis, we have assumed the
executives compensation is as follows: current base
salary equal to $400,000, a targeted annual incentive
award opportunity equal to 60% of his base salary,
and outstanding stock option awards as reflected in
the Outstanding Equity Awards at Fiscal Year-End
Table for 2010 on page 24 of this Item 11.(2)
    
    Assumes the executives date of termination of
employment was December 31, 2010. The market price of
the Companys common stock on December 31, 2010 (the
last trading date of the fiscal year) was $11.91 per
share. To the extent the market price of the
Companys common stock exceeds, or is less than,
$11.91 per share upon an applicable termination of
employment, the value of any acceleration of vesting
of stock options and restricted stock awards will be
correspondingly greater or less, as the case may be.
The same benefits and amounts will be payable upon a
failure to renew the agreement prior to the
expiration of the term of the agreement.(3)
    
    Represents the excess of $11.91 over the exercise
price of in the money options. For the purposes of
this analysis we have assumed the immediate
acceleration of all outstanding unvested stock
options and the lapse of all restrictions on
restricted stock awards upon a change-in-control. All
outstanding stock options will remain exercisable for
a period of three years from the date of termination
of employment, subject to the maximum original term
of such options. This extension of the
post-termination exercise period has not been
separately valued for purposes of this disclosure.(4)
    
    The amount shown for Severance represents 24 months
base salary, plus an amount equal to the bonus paid
to Dr. Atick for 2009 performance (the last completed
fiscal year as of December 31, 2010). However if the
Merger is consummated in 2011 the actual payment will
be based on the 2010 incentive award of $108,000
rather than the 2009 incentive award of $50,000.
Fifty percent of this payment is to be made five
business days after the termination date, with the
remainder to be paid on the next business day
following the six month anniversary of the
termination date. 34




---



##### 



(5)
    
    Assumes a voluntary termination of employment
within 18 months of the Change in Control or a
termination without Cause or for Good Reason (each as
defined in the employment agreement). Upon an actual
termination of employment, tax liability amounts
would change to reflect base salary and bonus amounts
then applicable, and would reflect the
then-applicable value of the accelerated vesting of
stock-based awards. The calculation of the potential
tax liability amount is based on the value of the
accelerated vesting of stock-based awards at a price
per share of Company common stock of $11.91. In
addition, for purposes of calculating the potential
tax liability we considered Mr. Aticks taxable
income for the years 2006 to 2010 as reflected in his
W-2.There would have been no change in the potential
tax liability amount had Mr. Aticks taxable income
been based on the years 2005 to 2009. Potential Payments and Benefits Upon a Termination of Employment
or a Change in Control of the Company for Mr. Molina
 Termination without
    
    
    
    
    
    
    In connection withCause or
    
    
    
    
    
    
    a Change in ControlResignation
    
    
    Death or
    
    
    of the CompanyExecutive Payments and Benefits (1)
    
    for Good Reason (2)
    
    
    Disability
    
    
    (2)(6)Accelerated vesting:Stock options (3)
    
    $
    436,875
    
    
    $
    436,875
    
    
    $
    436,875Restricted stock (3)
    
    $
    1,116,563
    
    
    $
    1,116,563
    
    
    $
    1,116,563Severance payment (4)
    
    $
    735,000
    
    
    $
    735,000
    
    
    $
    960,000Continued medical and dental coverage
    
    $
    18,828
    
    
    $
    18,828
    
    
    $
    18,828Tax liability amounts (5)
    
    
    
    
    
    
    
    
    
    
    TOTAL:(5)
    
    $
    2,307,266
    
    
    $
    2,307,266
    
    
    $
    2,532,266
 
 (1)
    
    For purposes of this analysis, we have
assumed the executives compensation is as
follows: current base salary equal to
$345,000, a targeted annual incentive
award opportunity equal to 60% of his base
salary, and outstanding stock option
awards as reflected in the Outstanding
Equity Awards at Fiscal Year-End Table for
2010 on page 25 of this Item 11.(2)
    
    Assumes the executives date of
termination of employment was December 31,
2010. The market price of the Companys
common stock on December 31, 2010 (the
last trading date of the fiscal year) was
$11.91 per share. To the extent the market
price of the Companys common stock
exceeds, or is less than, $11.91 per share
upon an applicable termination of
employment, the value of any acceleration
of vesting of stock options and restricted
stock awards will be correspondingly
greater or less, as the case may be. The
same benefits and amounts will be payable
upon a failure to renew the agreement
prior to the expiration of the term of the
agreement.(3)
    
    Represents the excess of $11.91 over the
exercise price of in the money options.
For the purposes of this analysis we have
assumed the immediate acceleration of all
outstanding unvested stock options and the
lapse of all restrictions on restricted
stock awards upon a change-in-control. All
outstanding stock options will remain
exercisable for a period of three years
from the date of termination of
employment, subject to the maximum
original term of such options. This
extension of the post-termination exercise
period has not been separately valued for
purposes of this disclosure.(4)
    
    The amount shown for Severance represents
24 months base salary, plus an amount
equal to the bonus paid to Mr. Molina for
2009 performance (the last completed
fiscal year as of December 31, 2010).
However if the Merger is consummated in
2011 the actual payment will be based on
the 2010 incentive award of $93,150 rather
than the 2009 incentive award of $45,000.
Fifty percent of this payment is to be
made five business days after the
termination date, with the remainder to be
paid on the next business day following
the six month anniversary of the
termination date. The severance payments
identified above also include a payment of
$225,000 in lieu of certain relocation
benefits Mr. Molina would otherwise be
entitled to receive upon any separation of
employment following the Merger, as
further described below.(5)
    
    Assumes a termination of employment
without Cause or for Good Reason (each as
defined in the employment agreement). Upon
an actual termination of employment, tax
liability amounts would change to reflect
base salary and bonus amounts then
applicable, and would reflect the
then-applicable value of the accelerated
vesting of stock-based awards. The
calculation of the potential tax liability
amount is based on the value of
accelerated vesting of stock-based awards
at a price per share of Company common
stock of $11.91.In addition, for purposes
of calculating the potential tax liability
we considered taxable income for the years
2006 to 2010 as reported in his W-2, which
reflects the impact of the actions taken
by the Board at its December 2010 meeting.
Had the potential tax liability been
calculated based on Mr. Molinas taxable
income for the years 2005 to 2009 the
hypothetical tax liability would have been
$459,783 and the total payments would have
been $2,992,049.(6)
    
    In the event of any separation of employment with the
Company or its successor following a Change in Control,
the Company or its successor will also pay all costs and
expenses arising out of or related to the relocation of
Mr. Molina and his family to any location in the mainland
United States (or if elected by Mr. Molina, the lump sum
cash value thereof). Mr. Molina has elected to receive
$225,000 in lieu of relocation benefits in connection with
the Merger. 35




---



##### 



Potential Payments and Benefits Upon a Termination of Employment
or a Change in Control of the Company for Mr. DAngelo
 In connection withTermination without
    
    
    a Change inCause or
    
    
    ControlResignation
    
    
    of the CompanyExecutive Payments and Benefits (1)
    
    for Good Reason (2)
    
    
    (2)(5)Accelerated vesting:Stock options (3)
    
    
    
    
    
    $
    68,700Restricted stock (3)
    
    
    
    
    
    $
    476,400Severance payment (4)
    
    $
    285,000
    
    
    $
    285,000Long term cash award (6)
    
    
    
    
    
    $
    100,000Continued medical and dental coverage
    
    $
    948
    
    
    $
    948Cash transaction bonus (7)
    
    
    
    
    
    $
    150,000TOTAL:
    
    $
    285,948
    
    
    $
    1,081,048
 
 (1)
    
    For purposes of this analysis, we have assumed the executives compensation is as follows:
current base salary equal to $285,000, a targeted annual incentive award opportunity equal to 50%
of his base salary, and outstanding stock option awards as reflected in the Outstanding Equity
Awards at Fiscal Year-End Table for 2010 on page 25 of this Item 11.(2)
    
    Assumes the executives date of termination of employment was December 31, 2010. The
market price of the Companys common stock on December 31, 2010 (the last trading date of the
fiscal year) was $11.91 per share. To the extent the market price of the Companys common stock
exceeds, or is less than, $11.91 per share upon an applicable termination of employment, the value
of any acceleration of vesting of stock options and restricted stock awards will be
correspondingly greater or less, as the case may be.(3)
    
    Represents the excess of $11.91over the exercise price of in the money options. For the
purposes of this analysis we have assumed the immediate acceleration of all outstanding unvested
stock options and the lapse of restrictions on all restricted stock awards upon a
change-in-control. All outstanding stock options will remain exercisable for a period of one year
from the date of termination of employment, subject to the maximum original term of such options.
This extension of the post-termination exercise period has not been separately valued for purposes
of this disclosure.(4)
    
    The amount shown for severance represents 12 months base salary.(5)
    
    Assumes termination other than for cause or resignation for good reason in accordance with the
terms of Mr. DAngelos offer letter.(6)
    
    Represents long term cash award that accelerates upon change in control. Approximately
$33,333 of such award vested and was paid in February 2011.(7)
    
    Represents transaction bonus that is contingent on and payable upon consummation of the Merger. 36




---



##### 



BOARD OF DIRECTORS COMPENSATION
 TDC
      37




---



##### 



Directors Compensation Table for 2010
 Fees Earnedor Paid in
    
    Stock
    
    Option
    
    All OtherCash
    
    Awards
    
    Awards
    
    Compensation
    
    TotalName (1)
    
    ($) (2)
    
    ($) (3)
    
    ($) (4)
    
    ($) (5)
    
    ($)B.G. Beck
    
    $
    135,333
    
    
    $
    100,000
    
    
    $
    
    
    
    $
    
    
    
    $
    235,333Milton E. Cooper
    
    
    140,333
    
    
    
    100,000
    
    
    
    
    
    
    
    
    
    
    
    240,333Robert S. Gelbard
    
    
    151,000
    
    
    
    100,000
    
    
    
    
    
    
    
    
    
    
    
    251,000Malcolm J. Gudis
    
    
    275,333
    
    
    
    100,000
    
    
    
    
    
    
    
    7,500
    
    
    
    382,833John E. Lawler
    
    
    276,729
    
    
    
    100,000
    
    
    
    
    
    
    
    7,500
    
    
    
    384,229James M. Loy
    
    
    149,875
    
    
    
    100,000
    
    
    
    
    
    
    
    
    
    
    
    249,875Harriet Mouchly-Weiss
    
    
    155,333
    
    
    
    100,000
    
    
    
    
    
    
    
    
    
    
    
    255,333Peter Nessen
    
    
    291,854
    
    
    
    100,000
    
    
    
    
    
    
    
    7,500
    
    
    
    399,354B. Boykin Rose
    
    
    273,667
    
    
    
    100,000
    
    
    
    
    
    
    
    7,500
    
    
    
    381,167
 
 (1)
    
    Mr. LaPenta, the current Chairman of the Board of Directors, is not included in this table
because, as an employee of the Company, he does not receive any fees for service as a director.(2)
    
    The standard fee arrangement for non employee directors for 2010 is described above. The
following table sets forth the break-down of the fees paid in cash to our non-employee directors
during 2010: Name
    
    Retainer Fees
    
    Chair Fees
    
    Meeting Fees
    
    TotalB.G. Beck
    
    $
    91,333
    
    
    $
    
    
    
    $
    44,000
    
    
    $
    135,333Milton E. Cooper
    
    
    91,333
    
    
    
    
    
    
    
    49,000
    
    
    
    140,333Robert S. Gelbard
    
    
    91,333
    
    
    
    6,667
    
    
    
    53,000
    
    
    
    151,000Malcolm J. Gudis
    
    
    91,333
    
    
    
    
    
    
    
    184,000
    
    
    
    275,333John E. Lawler
    
    
    91,333
    
    
    
    7,396
    
    
    
    178,000
    
    
    
    276,729James M. Loy
    
    
    91,333
    
    
    
    8,542
    
    
    
    50,000
    
    
    
    149,875Harriet Mouchly-Weiss
    
    
    91,333
    
    
    
    
    
    
    
    64,000
    
    
    
    155,333Peter Nessen
    
    
    91,333
    
    
    
    20,521
    
    
    
    180,000
    
    
    
    291,854B. Boykin Rose
    
    
    91,333
    
    
    
    3,334
    
    
    
    179,000
    
    
    
    273,667
  LessComp-
    
    
    
    
    
    Nominating & Corp.
    
    Special
    
    QuarterlyName
    
    Board
    
    Audit
    
    ensation
    
    Marketing
    
    Governance
    
    Committee
    
    Allotment
    
    TotalB.G. Beck
    
    $
    44,000
    
    
    $
    
    
    
    $
    
    
    
    $
    2,000
    
    
    $
    
    
    
    $
    
    
    
    $
    (2,000
    )
    
    $
    44,000Milton E. Cooper
    
    
    44,000
    
    
    
    
    
    
    
    7,000
    
    
    
    2,000
    
    
    
    4,000
    
    
    
    
    
    
    
    (8,000
    )
    
    
    49,000Robert S. Gelbard
    
    
    46,000
    
    
    
    
    
    
    
    8,000
    
    
    
    2,000
    
    
    
    5,000
    
    
    
    
    
    
    
    (8,000
    )
    
    
    53,000Malcolm J. Gudis
    
    
    46,000
    
    
    
    9,000
    
    
    
    4,000
    
    
    
    
    
    
    
    25,000
    
    
    
    108,000
    
    
    
    (8,000
    )
    
    
    184,000John E. Lawler
    
    
    46,000
    
    
    
    9,000
    
    
    
    
    
    
    
    
    
    
    
    25,000
    
    
    
    106,000
    
    
    
    (8,000
    )
    
    
    178,000James M. Loy
    
    
    42,000
    
    
    
    7,000
    
    
    
    8,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,000
    )
    
    
    50,000Harriet
Mouchly-Weiss
    
    
    42,000
    
    
    
    
    
    
    
    4,000
    
    
    
    2,000
    
    
    
    24,000
    
    
    
    
    
    
    
    (8,000
    )
    
    
    64,000Peter Nessen
    
    
    46,000
    
    
    
    9,000
    
    
    
    
    
    
    
    
    
    
    
    25,000
    
    
    
    108,000
    
    
    
    (8,000
    )
    
    
    180,000B. Boykin Rose
    
    
    46,000
    
    
    
    
    
    
    
    8,000
    
    
    
    
    
    
    
    25,000
    
    
    
    108,000
    
    
    
    (8,000
    )
    
    
    179,000
 (3)
    
    Pursuant to the Companys standard non-employee director compensation arrangements in
effect for the period January 1, 2010 through February 2, 2010, each non-employee director
received an annual stock award of 3,000 shares of the Companys common stock that is payable
annually on the first business day of each calendar year. Effective February 3, 2010, the annual
base-level TDC for each non-employee member of the Board of Directors includes $100,000 in shares
of Company common stock. The shares of stock included in the TDC is intended to be granted on the
first business day of each calendar year and the per share value of each share of Company common
stock will be based on the closing price per share of the Company common stock on the NYSE on the
date of grant. In recognition that each non employee member of the Board of Directors received a
grant of 3,000 fully vested shares of Company common stock on January 6, 2010, the dollar value of
shares granted on January 6, 2010 was deducted from the $100,000 of shares of Company common stock
granted each non-employee director on February 3, 2010, resulting in a grant of 10,417 restricted
shares to each non-employee director. The 10,417 restricted shares granted to each non-employee
member of the Board will vest over four years at the rate of 25% annually, so that in the ordinary
course, such shares become fully vested after four years from the date of the grant. The vesting
of all unvested shares of Company common stock granted under this annual compensation program, in
the event of a change of control as defined in Mr. LaPentas employment agreement, as amended
and in effect on the grant date, shall be accelerated to the date of the change of control;
furthermore, the vesting of shares shall also accelerate on the date a director terminates service
with the Company for any reason other than the directors willful engagement in illegal conduct or
gross misconduct which is materially injurious to the Company or the directors willful 38




---



##### 



engagement in a violation of any federal or state securities laws; additionally, on the date a director
terminates service with the Company, all previously granted stock options shall continue to be
exercisable until the earlier of (A) that date which is five years from the date of departure from
the Board, or (B) for any particular stock option, the original expiration date of such stock
option grant. The amounts reported in the Stock Awards column represent the aggregate grant date
fair value of the fully-vested stock-based award made to the non-employee directors on January 6,
2010 and February 3, 2010 based on the closing sales price per share of the Companys common stock
on the NYSE on such date.(4)
    
    The Company did not grant any stock option awards to non-employee directors in 2010. For a
description of our equity award grant practices for directors, see Long-Term Incentive Awards in
the Compensation Discussion and Analysis on page 17 in Item 11.The aggregate number of shares
underlying option awards outstanding as of December 31, 2010 for each of the non-employee
directors was as follows: Number of SharesUnderlying
    
    Number of SharesName
    
    Outstanding Options
    
    UnvestedB.G. Beck
    
    
    13,000
    
    
    
    Milton E. Cooper
    
    
    85,140
    
    
    
    Robert S. Gelbard
    
    
    15,000
    
    
    
    Malcolm J. Gudis
    
    
    56,760
    
    
    
    John E. Lawler
    
    
    49,665
    
    
    
    James M. Loy
    
    
    25,000
    
    
    
    Harriet Mouchly-Weiss
    
    
    32,667
    
    
    
    Peter Nessen
    
    
    38,500
    
    
    
    B. Boykin Rose
    
    
    25,000
    
    
    
    
 (5)
    
    Per diem compensation for attending, telephonically or in person, briefings or
de-briefings by retained counsel pursuant to the Companys director and officer litigation
reimbursement policy adopted July 27, 2010 and related implementing instructions.(6)
    
    During the first quarter of 2011 Directors earned fees for participation
in the following meetings: Board of Directors-4 meetings, Audit Committee -2
meetings, Compensation Committee-3 meetings, Nominating and Corporate Governance
Committee-1 meeting and Special Committee-8 meetings. In addition, Mr. Nessen
participated in two litigation related meetings to which he earned $5,000 in
accordance with the litigation reimbursement policy. 39




---



##### 



Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
 BENEFICIAL OWNERSHIP OF OUR COMMON STOCK
  Securities Beneficially Owned (1)Shares
    
    PercentageName and Address of Beneficial Owner
    
    Beneficially Owned
    
    of Shares Outstanding (2)Principal Securityholders:Aston Capital Partners L.P. (3)
    
    
    7,619,047
    
    
    
    8.44
    %L-1 Investment Partners, LLC (4)
    
    
    7,619,047
    
    
    
    8.44
    %Dimensional Fund Advisors LP (5)
    
    
    5,864,476
    
    
    
    6.49
    %MHR Institutional Partners III LP (6)
    
    
    6,813,984
    
    
    
    7.54
    %Directors:B.G. Beck (7)
    
    
    1,128,420
    
    
    
    1.25
    %Milton E. Cooper (8)
    
    
    132,287
    
    
    
    *Robert S. Gelbard (9)
    
    
    54,932
    
    
    
    *Malcolm J. Gudis (10)
    
    
    103,907
    
    
    
    *John E. Lawler (11)
    
    
    108,082
    
    
    
    *James M. Loy (12)
    
    
    48,417
    
    
    
    *Harriet Mouchly-Weiss (13)
    
    
    76,925
    
    
    
    *Peter Nessen (14)
    
    
    80,096
    
    
    
    *B. Boykin Rose (15)
    
    
    48,417
    
    
    
    *Named Executive Officers:Robert V. LaPenta (16)
    
    
    13,738,985
    
    
    
    15.11
    %Chairman, President, and Chief Executive OfficerJames DePalma (17)
    
    
    8,161,495
    
    
    
    9.00
    %Executive Vice President, Chief Financial Officer and
TreasurerJoseph Atick (18)
    
    
    1,447,869
    
    
    
    1.59
    %Executive Vice President, Chief Strategy OfficerMark S. Molina (19)
    
    
    552,223
    
    
    
    *Executive Vice President, Chief Legal Officer and SecretaryVincent A. DAngelo (20)
    
    
    193,166
    
    
    
    *Senior Vice President of Finance, Chief Accounting OfficerExecutive Officer:Joseph Paresi (21)
    
    
    7,963,815
    
    
    
    8.80
    %Executive Vice President, Chief Marketing OfficerAll Directors and Executive Officers as a Group(22)
    
    
    18,943,486
    
    
    
    20.31
    %16 persons
 
 *
    
    Less than 1%.(1)
    
    The holdings reported in this table for directors and executive officers are based upon information supplied by these individuals to the Company.(2)
    
    Applicable percentages are based on 90,322,355 shares outstanding as of February 28, 2011.(3)
    
    The ultimate controlling persons of Aston Capital Partners L.P. (Aston) are Robert V. LaPenta, James A. DePalma, Doni L. Fordyce and Joseph Paresi,
each of whom is an executive officer of the Company, a managing member of L-1 Investment Partners LLC (L-1 Partners), the investment manager of
Aston, and a managing member of Aston Capital Partners GP LLC, the general partner of Aston. 40




---



##### 



(4)
    
    Includes 7,619,047 shares of common stock held by Aston, of which L-1 Partners is the investment manager.(5)
    
    Based solely on the Schedule 13G/A filed by Dimensional Fund Advisors LP
(Dimensional) on February 11, 2011. In its role as investment advisor
sub-advisor or investment manager, neither Dimensional nor its
subsidiaries possess voting and/or investment power over shares of
common stock owned by Dimensional, its subsidiaries, trusts and
accounts. Dimensional disclaims beneficial ownership of such shares.(6)
    
    Based solely on the Schedule 13G filed by MHR Institutional Partners III
LP (MHR) on February 14, 2011. MHR Institutional Advisors III LLC
(MHR GP) is a Delaware limited liability company that is the general
partner of MHR and, in such capacity, may be deemed to beneficially own
the shares of common stock held for the account of MHR. MHR Fund
Management LLC (MHR Fund) is a Delaware limited liability company that
is an affiliate of and has an investment management agreement with MHR,
and other affiliated entities, pursuant to which it has the power to
vote or direct the vote and to dispose or to direct the disposition of
the shares of common stock of held for the account of MHR and,
accordingly, it may be deemed to beneficially own the shares of common
stock held for the account of MHR. Dr. Mark H. Rachesky is the managing
member of MHR GP and MHR Fund and, in such capacity, may be deemed to
beneficially own the shares of common stock held for the account of MHR.(7)
    
    Includes 13,000 shares of common stock issuable pursuant to stock
options which were exercisable as of February 28, 2011, or which become
exercisable within 60 days of such date.(8)
    
    Includes 85,140 shares of common stock issuable pursuant to stock
options which were exercisable as of February 28, 2011, or which become
exercisable within 60 days of such date.(9)
    
    Includes 15,000 shares of common stock issuable pursuant to stock
options which were exercisable as of February 28, 2011, or which become
exercisable within 60 days of such date.(10)
    
    Includes 56,760 shares of common stock issuable pursuant to stock
options which were exercisable as of February 28, 2011, or which become
exercisable within 60 days of such date.(11)
    
    Includes 49,665 shares of common stock issuable pursuant to stock
options which were exercisable as of February 28, 2011, or which become
exercisable within 60 days of such date.(12)
    
    Includes 25,000 shares of common stock issuable pursuant to stock
options which were exercisable as of February 28, 2011, or which become
exercisable within 60 days of such date(13)
    
    Includes 32,667 shares of common stock issuable pursuant to stock
options which were exercisable as of February 28, 2011 or which become
exercisable within 60 days of such date.(14)
    
    Includes 38,500 shares of common stock issuable pursuant to stock
options which were exercisable as of February 28, 2011, or which become
exercisable within 60 days of such date.(15)
    
    Includes 25,000 shares of common stock issuable pursuant to stock
options which were exercisable as of February 28, 2011, or which become
exercisable within 60 days of such date.(16)
    
    Includes 580,132 shares of common stock issuable pursuant to stock
options which were exercisable as of February28, 2011, or which become
exercisable within 60 days of such date and units in the L-1 Identity
Solutions, Inc. 401(k) Plan representing 3,063 shares of common stock.
Also includes 7,619,047 shares of common stock held by Aston, as Mr.
LaPenta is a managing member of L-1 Partners. Mr. LaPenta disclaims
beneficial ownership of the shares held by Aston.(17)
    
    Includes 345,180 shares of common stock issuable pursuant to stock
options which were exercisable as of February 28, 2011, or which become
exercisable within 60 days of such date and units in the L-1 Identity
Solutions, Inc. 401(k) Plan representing 3,284 shares of common stock.
Also includes 7,619,047 shares of common stock held by Aston. Mr.
DePalma is a managing member of L-1 Partners. Mr. DePalma disclaims
beneficial ownership of the shares held by Aston.(18)
    
    Includes 684,829 shares of common stock issuable pursuant to stock
options which were exercisable as of February 28, 2011, or which become
exercisable within 60 days of such date and units in the L-1 Identity
Solutions, Inc. 401(k) Plan representing 3,474 shares of common stock.(19)
    
    Includes 423,224 shares of common stock issuable pursuant to stock
options which were exercisable as of February 28, 2011, or which become
exercisable within 60 days of such date and units in the L-1 Identity
Solutions, Inc. 401(k) Plan representing 5,572 shares of common stock.(20)
    
    Includes 131,426 shares of common stock issuable pursuant to stock
options which were exercisable as of February 28, 2011, or which become
exercisable within 60 days of such date and units in the L-1 Identity
Solutions, Inc. 401(k) Plan representing 3,411 shares of common stock.(21)
    
    Includes 207,107 shares of common stock issuable pursuant to stock
options which were exercisable as of February 28, 2011 or which become
exercisable within 60 days of such date. Also includes 7,619,047 shares
of common stock held by Aston. Mr. Paresi is a managing member of L-1
Partners. Mr. Paresi disclaims beneficial ownership of the shares held
by Aston.(22)
    
    Consists of 2,934,711 shares of common stock issuable pursuant to stock
options which were exercisable as of February 28, 2011, or which become
exercisable within 60 days of such date, and 16,008,775 shares of common
stock held by the executive officers and directors as a group and deemed
to be beneficially held by the directors and executive officers as a
group, including 7,619,047 shares of common stock held by Aston. 41




---



##### 



Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
 Certain Relationships and Related Transactions
 Relationship with L-1 Investment Partners, LLC and Aston Capital Partners, L.P.
 Investment in the Company.
 Sublease.
 Non-competition Agreement.
 Retention of Stone Key Partners LLC
   42




---



##### 



Interests of Certain Persons in the Merger with Safran
  Relationship with Robert LaPenta, Jr.
  Procedures for Approval of Related Party Transactions
  Board Independence Standards for Directors
 NYSE
   43




---



##### 



Item 14.
    
    Principal Accountant Fees and Services
 PRINCIPAL ACCOUNTING FEES AND SERVICES
  2009
    
    
    2010Audit Fees (a)
    
    $
    2,172
    
    
    $
    2,121Audit-Related Fees (b)
    
    
    59
    
    
    
    15Tax Fees (c)
    
    
    9
    
    
    
    Total:
    
    $
    2,240
    
    
    $
    2,136
 
 (a)
    
    Audit Fees represent fees billed for professional services rendered for the integrated audit of our annual consolidated
financial statements and our internal control over financial reporting, including reviews of our quarterly financial
statements, as well as services provided in connection with other SEC Filings. The amounts for 2010 include fees for
professional services rendered for an audit of the Companys Intelligence Businesses.(b)
    
    Represents assurance and other services not directly related to the audit of the consolidated financial statements(c)
    
    Tax Fees represent fees for professional services related to tax reporting, compliance and transaction services assistance. 44




---



##### 



SIGNATURES
  L-1 IDENTITY SOLUTIONS, INC./s/ James A. DePalmaJames A. DePalmaExecutive Vice President, Chief Financial Officer and Treasurer
(Principal Financial Officer) 45




---



##### 



EXHIBIT INDEX
 Exhibit Number
    
    Description31.1
    
    Certification pursuant to Exchange Act Rules 13a-14(a) and 15d-14 of the Chief Executive Officer.31.2
    
    Certification pursuant to Exchange Act Rules 13a-14(a) and 15d-14 of the Chief Financial Officer.
 46