UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_]Confidential, for Use of the
Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
VIISAGE TECHNOLOGY, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X]No fee required
[_]Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_]Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
Notes:
[LOGO]
Viisage
technology
April 16, 2002
Dear Shareholder:
You are cordially invited to attend the 2002 Annual Meeting (the "Meeting")
of the Shareholders of Viisage Technology, Inc. ("Viisage"), to be held on
Tuesday, May 14, 2002. Your Board of Directors and management look forward to
greeting those of you who are able to attend.
Our 2001 Annual Report is enclosed. I hope you will read it carefully. I
have also enclosed our Notice of the 2002 Annual Meeting, Proxy Statement, and
proxy card.
At the Meeting, your Board of Directors will be asking you to ratify the
Board of Directors' decision to fix the number of directors at seven and the
number of Class III directors at three, to vote for three directors, and to
ratify the selection of Viisage's independent public accountants, as described
more fully in the enclosed Proxy Statement. For the reasons set forth in the
Proxy Statement, your Board of Directors recommends votes "FOR" each of the
items described above.
Whether or not you plan to attend the Meeting, it is important that your
shares be represented and voted. Accordingly, please read the enclosed material
and mark, date, sign, and return the enclosed proxy card at your earliest
convenience. If you attend the Meeting, you may revoke your proxy by requesting
the right to vote in person.
Sincerely,
/s/ Denis K. Berube
Denis K. Berube
Chairman of the Board of Directors
YOUR VOTE IS IMPORTANT.
PLEASE MARK, DATE, SIGN, AND RETURN YOUR PROXY CARD.
[LOGO]
Viisage
technology
30 Porter Road
Littleton, Massachusetts 01460
NOTICE OF THE 2002 ANNUAL MEETING OF SHAREHOLDERS
The 2002 Annual Meeting of the Shareholders of Viisage Technology, Inc.
("Viisage") will be held at 1:30 p.m. on Tuesday, May 14, 2002 in the Louisa
May Alcott Room of the Omni Parker House, 60 School Street, Boston,
Massachusetts. The Meeting is being held for the following purposes:
1. To ratify the Board of Directors' decision to fix the number of
directors at seven, and the number of Class III directors at three;
2. To elect three Class III directors for three year terms;
3. To ratify the selection of BDO Seidman, LLP as independent public
accountants for Viisage for the year ending December 31, 2002; and
4. To transact such other business as may properly come before the Meeting.
Shareholders of record at the close of business on April 1, 2002, the record
date for the Meeting, are entitled to receive notice of and to vote at the
Meeting.
The enclosed proxy card, Proxy Statement, and Viisage's 2001 Annual Report
are being sent to you along with this Notice.
By Order of the Board of Directors
/s/ Charles J. Johnson
Charles J. Johnson,
Secretary
April 16, 2002
VIISAGE TECHNOLOGY, INC.
PROXY STATEMENT
FOR THE
2002 ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 14, 2002
INFORMATION ABOUT SOLICITATION AND VOTING
General
This Proxy Statement is provided in connection with the solicitation of
proxies by the Board of Directors of Viisage Technology, Inc., a Delaware
corporation (the "Company" or "Viisage"), for the 2002 Annual Meeting of
Shareholders to be held at 1:30 p.m. on Tuesday, May 14, 2002, in the Louisa
May Alcott Room of the Omni Parker House, 60 School Street, Boston,
Massachusetts, and at any adjournment thereof (the "Meeting"). The Company's
principal executive offices are located at 30 Porter Road, Littleton,
Massachusetts 01460. This Proxy Statement and the accompanying proxy card are
expected to be mailed on or about April 16, 2002 to all shareholders entitled
to vote at the Meeting.
Viisage's Board of Directors (the "Board of Directors" or the "Board") is
soliciting proxies for the following purposes: (i) to ratify the Board's
decision to fix the number of directors at seven, and the number of Class III
directors at three; (ii) to elect three Class III directors, comprising the
class of directors to be elected for the term expiring in 2005; and (iii) to
ratify the selection of BDO Seidman, LLP as independent public accountants for
Viisage for the year ending December 31, 2002.
Stockholders Entitled to Vote
At the close of business on April 1, 2002, the record date for the Meeting,
there were outstanding and entitled to vote 19,848,473 shares of the Company's
common stock, $0.001 par value per share (the "Common Stock"). Only
shareholders of record at the close of business on April 1, 2002 are entitled
to vote at the Meeting. Each outstanding share of Common Stock is entitled to
one vote on each matter to be voted upon at the Meeting.
Quorum and Voting
The representation, in person or by proxy, of at least a majority of the
outstanding shares of Common Stock entitled to vote at the Meeting is necessary
to establish a quorum. All votes will be tabulated by the inspector of
elections appointed for the Meeting, who will separately tabulate affirmative
and negative votes, abstentions and broker non-votes. Broker non-votes occur
when a nominee, such as a financial institution, returns a proxy, but does not
have the authorization or voting instructions from the beneficial owner to vote
the owner's shares on a particular proposal. Abstentions and broker non-votes
will be counted for the purpose of determining if a quorum is present.
Abstentions will be counted towards the tabulations of votes cast on matters
presented at the Meeting and will have the same effect as negative votes (other
than the election of directors), whereas broker non-votes will not be counted
for purposes of determining whether a matter has been approved.
Assuming the presence of a quorum, the affirmative vote of the holders of a
majority of the outstanding shares of Common Stock entitled to vote at the
Meeting, present in person or by proxy, is required for the approval of each
matter submitted to the Meeting except the election of directors. In the
election of directors, the nominee receiving the highest number of affirmative
votes will be elected.
Shares represented by proxy will be voted in accordance with your
instructions. If your proxy card is signed and returned without specifying
choices, your shares will be voted for the nominees for director, for the other
proposals, and as the individuals named as proxy holders on the proxy card deem
advisable on all other matters that may properly come before the Meeting.
A shareholder who returns a proxy card may revoke it at any time before the
shareholder's shares are voted at the Meeting by written notice to the
Secretary of the Company received prior to the Meeting, by executing and
returning a later-dated proxy, or by voting by ballot at the Meeting.
1
PROPOSAL 1 -- RATIFICATION OF BOARD'S DECISION TO FIX THE NUMBER OF
DIRECTORS AT SEVEN, AND THE NUMBER OF CLASS III DIRECTORS AT THREE
Pursuant to the Company's Restated Certificate of Incorporation and By-Laws,
the Board has fixed the number of directors at seven. In addition, the Restated
Certificate of Incorporation also provides that directors shall be divided into
three classes of approximately the same number of directors; the Board has
fixed the number of Class III directors at three, and each of Class I and Class
II will continue to have two directors.
Shareholder ratification of the Board's decision to fix the number of
directors at seven, and the number of Class III directors at three, is not
required by the Company's By-Laws or otherwise. The Board of Directors,
however, is submitting the matter for shareholder ratification as a matter of
good corporate practice.
The Board recommends a vote "FOR" the ratification of its decision to fix
the number of directors at seven, and the number of Class III directors at
three.
PROPOSAL 2 -- ELECTION OF DIRECTORS
General
Three Class III directors are to be elected at the Meeting to serve
three-year terms expiring at the 2005 Annual Meeting of Shareholders and until
their successors have been elected and duly qualified. Unless instructed
otherwise, the proxy holders will vote the proxies received by them for the
Company's nominees: John C. Gannon, Peter Nessen and Thomas J. Reilly. In the
event that the nominees of the Company are unable or decline to serve as
directors at the time of the Meeting, the proxies will be voted for any nominee
who shall be designated by the present Board of Directors to fill the vacancy
(unless another nominee is indicated in any particular proxy). Mr. Gannon, Mr.
Nessen, and Mr. Reilly have consented to serve as directors of the Company, and
the Board of Directors has no reason to believe that they will be unavailable
for service.
The Board recommends a vote "FOR" the proposed nominees to the Board.
Composition of the Board
The Company's Restated Certificate of Incorporation provides that directors
shall be divided into three classes and that each director shall serve for a
term of three years and until his or her successor is elected and qualified or
until his or her earlier resignation, death, or removal. One class of directors
is elected at each annual meeting for a three-year term.
The Class I directors (whose term expires in 2003) are Charles E. Levine and
Denis K. Berube. The Class II directors (whose terms expire in 2004) are
Harriet Mouchly-Weiss and Paul T. Principato. There are no family relationships
between any of the directors or executive officers of the Company.
The following sets forth the names of and certain information about the
persons nominated as directors and the directors whose terms do not expire at
the Meeting. Information regarding their beneficial ownership of shares of the
Company's Common Stock is reported in the section entitled "Security Ownership."
Nominees for Class III Director
John C. Gannon, 58, is currently a consultant for the Company. Mr. Gannon
has also served as Vice Chairman of Intellibridge Corporation in Washington,
D.C. since June 2001. Mr. Gannon formerly served as Chairman of the National
Intelligence Council, and as the Assistant Director of the Central Intelligence
Agency ("CIA") for Analysis and Production from July 1997 through June 2001.
Mr. Gannon previously served as Deputy Director for Intelligence at the CIA,
and asDirector of European Analysis at the CIA.
Peter Nessen, 66, has served as a director of Viisage since its
incorporation in May 1996 and earlier served on the Advisory Board of the
Viisage Technology Division of Lau Acquisition Corp., d/b/a Lau Technologies
(hereinafter "Lau"). Mr. Nessen has been Chairman of the Board of NCN Financial
Corporation, a private
2
banking firm, since January 1995. From June 1993 through December 1994, Mr.
Nessen was a Dean at Harvard Medical School, responsible for special projects.
Mr. Nessen was Secretary of Administration and Finance for the Commonwealth of
Massachusetts from January 1991 through May 1993 and managing partner of the
consulting practice in the Boston office of BDO Seidman LLP, a public
accounting firm, from February 1990 through December 1990.
Thomas J. Reilly, 63, has served as a director of Viisage since its
incorporation in May 1996 and earlier served on the Advisory Board of the
Viisage Technology Division of Lau. Mr. Reilly has been a self-employed
financial consultant since December 1994. From June 1966 through November 1994,
Mr. Reilly was with Arthur Andersen LLP, a public accounting firm, and became a
partner in 1975.
Directors Whose Terms Expire at the 2003 Annual Meeting (Class I Directors)
Denis K. Berube, 59, has been the Chairman of the Board of Directors of
Viisage since the Company's incorporation in 1996. He chaired the Advisory
Board of the Viisage Technology Division of Lau since its formation in October
1995. Mr. Berube is Executive Vice President and Chief Operating Officer of
Lau, where he has been employed since 1990.
Charles E. Levine, 49, serves as President of Sprint PCS, and has served
Sprint PCS in various executive capacities since January 1997. Mr. Levine
served as Senior Vice President of Octel Services, a provider of voice systems
services, from October 1994 through September 1996, after which he enjoyed a
few months off before joining Sprint PCS. From October 1993 to October 1994 Mr.
Levine was President, Chief Executive Officer and Director of CFT Systems, a
company focusing on developing software for field-based utility workers. Mr.
Levine was a Vice President at AT&T from February 1987 to October 1993, with
marketing, product management, and general management responsibilities.
Directors Whose Terms Expire at the 2004 Annual Meeting (Class II Directors)
Harriet Mouchly-Weiss, 59, has served as a director of Viisage since its
incorporation in May 1996 and earlier served on the Advisory Board of the
Viisage Technology Division of Lau. Ms. Mouchly-Weiss founded Strategy XXI
Group, an international communications and consulting firm, in January 1993 and
has served as its managing partner since that time. From 1986 to December 1992,
Ms. Mouchly-Weiss was President of GCI International, an international public
relations and marketing agency. Ms. Mouchly-Weiss currently also serves as a
member of the Board of Directors of American Greeting Corp.
Paul T. Principato, 48, has served as a director of Viisage since May 2001
and as Chief Financial Officer of Lau since its incorporation in March of 1990.
Currently, Lau is the largest holder of Viisage Common Stock, directly owning
approximately 32% of its issued and outstanding Common Stock. Prior to 1990,
Mr. Principato served as Controller at Barry Wright Corp.
Meetings of the Board of Directors and Committees
The Company's Board of Directors held 10 meetings during 2001, and each
director, except for Mr. Levine, attended at least 75% of all meetings of the
Board and any committee on which he or she served. Mr. Levine attended
approximately 70% of all Board meetings.
The Board has established a Compensation Committee, Audit Committee, and
Marketing Committee, all of the members of which are independent directors. The
Compensation Committee, comprised of Mr. Reilly (chair), Ms. Mouchly-Weiss, and
Mr. Nessen, reviews senior management performance, recommends executive
compensation, and administers the Amended and Restated 1996 Directors Stock
Option Plan, the Amended and Restated 1996 Management Stock Option Plan, and
the 1997 Employee Stock Purchase Plan. The Audit
3
Committee, comprised of Messrs. Nessen (chair) and Reilly, and Ms.
Mouchly-Weiss, meets at least quarterly to review the Company's quarterly
financial releases. The Audit Committee also reviews the scope of the Company's
internal controls, receives reports on compliance with laws, regulations and
internal procedures, recommends the selection of the Company's independent
public accountants, reviews the scope of the audit with the independent public
accountants and reviews the results of the audit. The Marketing Committee,
comprised of Ms. Mouchly-Weiss (chair), Mr. Nessen, and Mr. Levine, reviews and
makes recommendations regarding the Company's marketing strategy and plans.
During 2001, the Compensation Committee met three times, the Audit Committee
met four times, and the Marketing Committee met four times. The Company does
not have a nominating committee of the Board of Directors, and the Board of
Directors undertakes all nominating functions.
Compensation of Directors
Pursuant to the Company's 2001 "Stock in Lieu of Cash Compensation for
Directors Plan," each director received an aggregate $45,000 worth of Common
Stock (except Mr. Principato, who having joined the Board more recently,
received an aggregate $27,000 worth of Common Stock) for their service as
director in 2001, but no additional cash or fees for attending Board or
committee meetings. This amount of directors' stock compensation has been
increased for Fiscal 2002 service to an aggregate of $60,000, up to $20,000 of
which each director may choose to receive in either cash or stock, and the
remainder to be paid in stock. In addition, the Company reimburses directors
for their out-of-pocket expenses incurred in connection with any Board or
committee meetings.
Directors also receive grants of nonqualified options under the Company's
1996 Director Stock Option Plan, as amended (the "Director Plan"). In Fiscal
2001, options to purchase an aggregate of 25,002 shares were issued which
enabled each director to purchase 4,167 shares of the Company's Common Stock,
which vested immediately upon grant. As of April 1, 2002, options to purchase
an aggregate of 60,000 shares have been issued which enable each director to
purchase 10,000 shares of Common Stock. The options vest pursuant to the terms
of each individual option. Vesting occurs only if the option holder is serving
on the Board on the vesting date.
Compensation Committee Interlocks and Insider Participation
The Compensation Committee consists of Mr. Reilly (chair), Ms.
Mouchly-Weiss, and Mr. Nessen, none of whom are officers or employees of the
Company. No interlocking relationship exists between our board or compensation
committee and the board of directors or compensation committee of any other
company, nor has any such interlocking relationship existed in the past.
PROPOSAL 3 -- RATIFICATION OF SELECTION
OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has selected the accounting firm of BDO Seidman, LLP
as the Company's independent public accountants for the year ending December
31, 2002.
Shareholder ratification of the selection of BDO Seidman is not required by
the Company's By-laws or otherwise. The Board of Directors, however, is
submitting the selection of BDO Seidman to the shareholders as a matter of good
corporate practice. If the shareholders fail to ratify the selection, the Audit
Committee and the Board of Directors will reconsider whether or not to retain
such firm. Even if the selection is ratified, the Audit Committee and the
Board, in their discretion, may direct the appointment of a different
independent public accounting firm at any time during the year if they
determine that such a change would be in the best interest of the Company and
its shareholders.
4
BDO Seidman representatives are expected to be present at the Annual Meeting
and available to respond to appropriate questions. They will have an
opportunity to make a statement if they desire to do so.
Audit Fees. The aggregate fees billed for professional services rendered
by BDO Seidman for the audit of Viisage's annual financial statements for the
year ended December 31, 2001, and the reviews of Viisage's financial statements
included in the Company's Form 10-Q during the year ended December 31, 2001,
totaled $141,750.
Financial Information Systems Design and Implementation Fees. There were
no fees billed for professional services rendered by BDO Seidman for design and
implementation of financial information systems for the year ended December 31,
2001.
All Other Fees. The aggregate fees billed for professional services
rendered by BDO Seidman for services other than its audit and review of
Viisage's financial statements during the year ended December 31, 2001, totaled
$78,800. A substantial portion of the fees in this category related to services
traditionally provided by auditors, including work performed in connection with
registration statements, acquisitions and income tax services.
The Audit Committee has determined that BDO Seidman's provision of services
other than for its audit and review of Viisage's financial statements is
compatible with maintaining the independence of BDO Seidman.
The Board recommends a vote "FOR" the ratification of BDO Seidman, LLP as
the Company's independent public accountants for the year ending December 31,
2002.
5
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
DIRECTORS AND MANAGEMENT
The following table sets forth, as of April 1, 2002, the beneficial
ownership of Common Stock by (i) each person who is known to the Company to own
5% or more of the Company's Common Stock, (ii) each director and director
nominee, (iii) each executive officer of Viisage for whom information is given
in the Summary Compensation Table in this Proxy Statement, and (iv) all
directors and executive officers of the Company as a group. With respect to
persons owning 5% or more of the Company's Common Stock, the Company has relied
on documents filed with the Securities and Exchange Commission indicating
holdings which are current through approximately February 15, 2002.
Shares
Beneficially
Name (and Address of Owner of More than 5%)(1) Owned(2) Percentage
- ---------------------------------------------- ------------ ----------
Joanna T. Lau(3)............................................... 6,450,348 32.4%
Denis K. Berube(4)............................................. 6,450,348 32.4%
Lau Technologies............................................... 6,291,367 31.7%
Essex Investment Management Company............................ 1,887,730 9.5%
125 High Street
Boston, MA 02110
Thomas J. Colatosti(5)......................................... 447,662 2.2%
Harriet Mouchly-Weiss(6)....................................... 135,346 *
Charles E. Levine(7)........................................... 120,374 *
Thomas J. Reilly(8)............................................ 75,236 *
Iftikhar Ahmad(9).............................................. 72,871 *
Peter Nessen(10)............................................... 39,740 *
Paul T. Principato(11)......................................... 38,818 *
Michael Mazzu(12).............................................. 23,218 *
Stanley Duci(13)............................................... 22,700 *
Sean F. Mack(14)............................................... 20,618 *
All directors, nominees and named executive officers as a group
(13 persons)(15).............................................. 7,506,991 36.2%
- --------
* Indicates holdings of less than one percent of the 19,848,473 shares issued
and outstanding as of April 1, 2002.
(1) The address of Ms. Lau and Lau Technologies is in care of Lau Technologies,
30 Porter Road, Littleton, Massachusetts 01460.
(2) Unless otherwise noted, each person identified possesses sole voting and
investment power over the shares owned.
(3) Consists of 6,291,367 shares held by Lau, of which Ms. Lau owns
approximately 56% of the outstanding capital stock, 1,000 shares owned
directly by Ms. Lau, 65,496 shares issuable to Denis K. Berube, the spouse
of Ms. Lau, pursuant to stock options, and 92,485 shares owned by Mr.
Berube directly. Ms. Lau disclaims beneficial ownership of the 65,496
issuable shares and the 92,485 shares owned by Mr. Berube.
(4) Consists of 6,291,367 shares held by Lau, of which Mr. Berube's spouse,
Joanna Lau, owns approximately 56% of the outstanding capital stock, 1,000
shares owned directly by Ms. Lau, 65,496 shares issuable to Mr. Berube
pursuant to stock options, and 92,485 shares owned by Mr. Berube directly.
Mr. Berube disclaims beneficial ownership of the shares of Common Stock
held by Lau and the 1,000 shares held by Ms. Lau.
(5) Includes 447,262 shares issuable to Mr. Colatosti pursuant to stock options
and 400 shares held by Mr. Colatosti's children. Mr. Colatosti disclaims
beneficial ownership of his children's shares.
(6) Consists of 65,496 shares issuable pursuant to stock options and 69,850
shares owned directly by Ms. Mouchly-Weiss.
(7) Consists of 54,136 shares issuable pursuant to stock options and 66,238
shares owned directly by Mr. Levine.
(8) Consists of 65,496 shares issuable pursuant to stock options and 9,740
shares owned directly by Mr. Reilly.
(9) Consists of 69,095 shares issuable pursuant to stock options and 3,776
shares owned directly by Mr. Ahmad.
(10) Consists of 30,000 shares issuable pursuant to stock options and 9,740
shares owned directly by Mr. Nessen.
(11) Consists of 16,967 shares issuable pursuant to stock options and 21,851
shares owned directly by Mr. Principato.
(12) Consists of 23,218 shares issuable to Mr. Mazzu pursuant to stock options.
(13) Consists of 22,500 shares issuable pursuant to stock options and 200
shares owned directly by Mr. Duci.
(14) Consists of 15,000 shares issuable pursuant to stock options and 5,618
shares owned directly by Mr. Mack.
(15) Represents shares described in Notes 4 and 5-14, in addition to the
following: 7,635 shares issuable to Gretchen Lewis pursuant to stock
options, and 32,685 shares owned by Ms. Lewis directly; 10,000 shares
issuable to Mr. Gannon pursuant to stock options, and 9,740 shares owned
by Mr. Gannon directly pursuant to a grant. Mr. Gannon is currently a
consultant for the Company, and is also a nominee for director. Should Mr.
Gannon be elected to the position of director at the 2002 annual meeting,
his consulting relationship with the Company will terminate and he will
not be entitled to any additional compensation for his service as director
in 2002.
6
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation paid
by the Company to the named executive officers for services rendered to the
Company for the last three fiscal years.
Long Term
Compensation
Annual Compensation Awards(3)
------------------- ------------
Year Securities
Name and Principal Ended Underlying All Other
Position 12/31 Salary Incentive(2) Options(#) Compensation
------------------ ----- -------- ------------ ------------ ------------
Thomas J. Colatosti,..................... 2001 $225,000 $100,000 650,000 $16,800
President and Chief Executive Officer 2000 $224,039 $100,000 50,000 $13,650
1999 $200,162 -- -- $14,200
Iftikhar A. Ahmad,....................... 2001 $165,000 $ 75,000 50,000 $ 3,600
Vice President of Engineering 2000 $164,423 $ 25,000 50,000 $ 2,466
1999 $141,606 -- 35,000 $ 2,124
Sean F. Mack,............................ 2001 $119,308 $ 37,500 15,000 $ 4,704
Vice President, Controller and Treasurer 2000 $100,000 $ 10,000 20,000 $ 3,300
Stanley Duci,............................ 2001 $100,000 $ 37,500 20,000 $ 4,125
Vice President of Customer Service 2000 $100,000 $ 25,000 25,000 $ 3,000
1999 $ 96,517 10,000 $ 2,896
Michael Mazzu............................ 2001 $117,481 $ 25,000 30,000 $ 4,274
Vice President of Biometrics
- --------
(1) Mr. Colatosti, who joined the Company on December 30, 1996 and served as
Chief Operating Officer immediately prior to his promotion, became
President and Chief Executive Officer on November 3, 1998. Mr. Ahmad, who
joined the Company in November of 1996 and served as the Director of
Engineering prior to his promotion, became Vice President of Engineering in
March of 1999. Mr. Mack, who joined the Company in July of 1999 and served
as the Corporate Controller prior to his promotion, became Vice President,
Controller and Treasurer in January of 2000. Mr. Duci, who joined the
Company in October of 1996 and served as the Manager of Customer Service
and Quality prior to his promotion, became Vice President of Customer
Service in March of 1999. Mr. Mazzu, who joined the Company in October of
1995 and served in various positions within the Company prior to his
promotion, became Vice President of Biometrics in February 2001. The above
table sets forth compensation amounts for each full year in which the
individual served as an executive officer of the Company.
(2) The Company currently maintains an Executive Incentive Compensation Plan
for its executive officers and other key employees of the Company to
motivate members of the Company's executive team. Each participant in the
Executive Incentive Compensation Plan may receive a percentage of his or
her base salary based upon the Company's and each participant's individual
performance, as determined by success in meeting established goals approved
by the Chief Executive Officer, for individual goals, or the Board of
Directors, for Company goals. The Compensation Committee administers the
Plan.
(3) Options were granted under the Amended and Restated 1996 Management Stock
Option Plan.
(4) Amounts include 2001 401(k) plan match of $5,250 for Mr. Colatosti, $3,600
for Mr. Ahmad, $4,704 for Mr. Mack, and $4,125 for Mr. Duci Mr. Colatosti
also receives an $8,400 auto allowance, $3,150 for reimbursement for tax
and financial planning services, and various insurance benefit payments.
The Company participates in the Lau 401(k) plan and pays its proportionate
share of plan expenses based on the number of participants. The plan
permits pre-tax contributions by participants of up to 15% of base
compensation or the statutory limit. The Company may make discretionary
contributions to the plan, subject to certain limits. Participants are
fully vested in their contributions and vest 20% per year in employer
contributions.
7
Stock Options Granted During 2001
The following table sets forth information concerning individual grants of
stock options made during 2001 to the Company's named executive officers. It
has not been the Company's policy in the past to grant stock appreciation
rights, and no such rights were granted in 2001.
Potential Realizable
% of Value at Assumed
Number of Total Annual Rates of Stock
Securities Options Price Appreciation for
Underlying Granted to Exercise Option Term (2)
Options Employees Price ----------------------
Name Granted(1) in Year ($/share) Expiration Date 5% 10%
---- ---------- ---------- --------- ----------------- ---------- ----------
Thomas J. Colatosti 650,000 72.1% $3.06 February 14, 2011 $1,251,893 $3,172,544
Iftikhar A. Ahmad.. 50,000 5.5% $3.06 February 14, 2011 $ 96,299 $ 244,042
Sean F. Mack....... 15,000 1.7% $3.06 February 14, 2011 $ 28,890 $ 73,213
Stanley Duci....... 20,000 2.2% $3.06 February 14, 2011 $ 38,520 $ 97,617
Michael Mazzu...... 30,000 3.3% $3.06 February 14, 2011 $ 57,780 $ 146,425
- --------
(1) Options were granted under the Amended and Restated 1996 Management Stock
Option Plan. Total of options granted does not include Employee Stock
Purchase Plan options. All options listed vest pursuant to the terms of the
individual option.
(2) In accordance with SEC rules, we have based our calculation of the
potential realizable value on the term of the option at its time of grant,
and we have assumed that:
. The fair market value on the date of grant appreciates at the indicated
annual rate compounded annually for the entire term of the option; and
. The option is exercised and sold on the last day of its term for the
appreciated stock price.
These amounts are based on 5% and 10% assumed rates of appreciation and do
not represent our estimate of future stock prices. Actual gains, if any, on
stock option exercises will be dependent on the future performance of the
common stock.
Stock Options Exercised During 2001
The following table sets forth information concerning stock option exercises
during 2001 and outstanding stock options held at the end of 2001 by the
Company's named executive officers. No stock appreciation rights were exercised
or outstanding during 2001.
Value of Unexercised
Shares Number of Securities In-the-Money Options
Acquired Underlying Unexercised at 12/31/01 ($)
On Value Options at 12/31/01 Exercisable/
Name Exercise Realized Exercisable/Unexercisable Unexercisable(1)
---- -------- ---------- ------------------------- ---------------------
Thomas J. Colatosti 245,000 $2,667,091 330,596/832,741 $2,401,977/$5,880,377
Iftikhar A. Ahmad.. 24,798 $ 248,004 69,095/83,207 $ 326,872/$406,999
Sean F. Mack....... 8,667 $ 88,027 15,000/24,333 $ 33,488/$103,576
Stanley Duci....... 7,666 $ 76,510 22,500/27,834 $ 72,601/$104,324
Michael Mazzu...... -- -- 23,218/31,282 $ 132,630/$181,128
- --------
(1) Based on the $9.76 closing price of the Company's Common Stock on December
31, 2001 on the Nasdaq National Market, minus the respective option
exercise price.
Employment Agreements
Mr. Colatosti has an agreement with the Company that provides, among other
terms, that the Company will pay Mr. Colatosti six months of current salary if
Viisage terminates his employment, except for cause or if commensurate
employment is offered with an affiliate. Mr. Colatosti is also subject to
non-competition and non-solicitation provisions which generally survive one
year beyond Mr. Colatosti's termination.
Board Compensation Committee Report on Executive Compensation
The Compensation Committee of the Company's Board of Directors (the
"Committee") is responsible for establishing and managing compensation policies
for the Company's executive officers and for making decisions
8
about awards under certain of the Company's stock-based compensation plans in
satisfaction of the Securities Exchange Act Rule 16b-3. Each Committee member
is an outside director within the meaning of Rule 16(b) of the Securities
Exchange Act of 1934, as amended, and section 162(m) of the Internal Revenue
Code. This report outlines the Company's compensation policies for the Chief
Executive Officer and executive officers other than the Chief Executive Officer
(collectively, the "executive officers").
The Committee's compensation policies provide compensation opportunities
that are comparable to those for similarly situated executives in comparable
companies. These compensation policies are designed to reward executives based
on their contributions to the Company's success with respect to shareholder
value creation and to ensure the Company's ability to attract and retain
qualified executives. The principal elements of compensation employed by the
Committee to meet these objectives are base salaries, cash incentive
opportunities, and stock options.
In making its decisions, the Committee considers a range of factors it
believes to be relevant, including the Company's pay levels relative to
competitive norms, the Company's achievements over the past year, the
individual's contributions to the Company's success, and the roles and
responsibilities of each executive.
Compensation levels and incentive opportunities are designed to generally
reflect median levels of competitive compensation for executives with
corresponding responsibilities in comparably sized peer firms, and are
periodically adjusted to meet this objective. The actual level of compensation
earned by each executive will vary according to the success of the Company and
the performance of the individual.
The Committee assesses the competitiveness of the Company's total
compensation program and uses the services of an outside compensation
consultant as needed. External comparisons are made to data drawn from a number
of sources, including the publicly available disclosures of selected peer firms
and national compensation surveys of technology firms of similar size and
complexity.
In determining the appropriateness of executive base salary levels, the
Committee annually considers external competitiveness, the roles and
responsibilities of the individual, the internal equity of pay relationships,
and the contributions of the individual to the Company's success.
The Committee manages an Executive Incentive Compensation Plan, described in
the text above, under which awards are linked to the achievement of
predetermined financial goals such as earnings and revenue growth, as well as
individual objectives. The Committee assigns performance measures annually on
the basis of the Company's key objectives. All executive officers are eligible
to participate in this program.
Options granted in 2001 to executive officers have an exercise price equal
to the fair market value of the stock on the date of the grant, implying that
no compensation can be earned under this element unless shareholder value is
created, and vesting requirements that are linked to an extended service
requirement. In determining the magnitude of the awards, the Committee
considers competitive norms, and the roles, responsibilities, and prior
performance of the individual. All executive officers, including the Chief
Executive Officer, are eligible to participate in this program.
Compensation for 2002 generally reflects levels required to retain
executives. Following its annual review of compensation after the close of
2001, the Committee made adjustments in executive officers' salaries to reflect
competitive norms.
COMPENSATION COMMITTEE
Thomas J. Reilly, Chairman
Harriet Mouchly-Weiss
Peter Nessen
9
Board Audit Committee Report
The Audit Committee of the Company's Board of Directors currently consists
of Peter Nessen (chair), Thomas J. Reilly and Harriet Mouchly-Weiss, all of
whom are independent as that term is defined in Rule 4200(a)(14) of the
National Association of Securities Dealers' listing standards. The Audit
Committee assists the Board of Directors in fulfilling its responsibility for
oversight of the quality and integrity of the accounting, auditing and
reporting practices of Viisage and such other duties as directed by the Board
of Directors. The Audit Committee reviewed and discussed Viisage's audited
Financial Statements for the fiscal year ended December 31, 2001 with the
Company's management. The Audit Committee also discussed with BDO Seidman, LLP,
the Company's independent accountants, the auditors' responsibilities, any
significant issues arising during the audit, and other matters required to be
discussed by SAS 61. The Audit Committee further discussed with BDO Seidman,
LLP their judgment as to the quality, as well as the acceptability, of the
Company's accounting principles. The Audit Committee received the written
disclosures and the letter from the independent accountants required by
Independence Standards Board Standard No.1, and has discussed with the
independent accountants their independence. Based on its review and the
discussions noted above, the Audit Committee recommended to the Board of
Directors that Viisage's Financial Statements for the fiscal year ended
December 31, 2001 be included in Viisage's Annual Report on Form 10-K for the
fiscal year ended December 31, 2001 for filing with the Securities and Exchange
Commission.
The Company's Board of Directors has adopted a written charter for the Audit
Committee. A copy of the Charter of the Audit Committee of the Board of
Directors of Viisage can be found as Attachment A to the Company's Proxy
Statement for the 2002 Annual Meeting of Shareholders.
AUDIT COMMITTEE
Peter Nessen, Chairman
Thomas J. Reilly
Harriet Mouchly-Weiss
10
STOCK PERFORMANCE GRAPH
[CHART]
COMPARISON OF NOVEMBER 1996 - DECEMBER 2001
CUMULATIVE TOTAL RETURN AMONG VIISAGE TECHNOLOGY,
THE NASDAQ COMPOSITE, AND THE RUSSELL 2000
Viisage Nasdaq - Composite Russell 2000
11/08/96 100.00 100.00 100.00
12/31/96 138.00 103.00 105.00
06/30/97 165.00 115.00 115.00
12/31/97 55.00 125.00 127.00
06/30/98 20.00 151.00 133.00
12/31/98 12.00 174.00 122.00
06/30/99 11.00 214.00 133.00
12/31/99 77.00 324.00 146.00
06/30/00 27.98 315.39 150.11
12/31/00 8.33 196.46 140.33
06/30/01 23.05 171.81 148.78
12/31/01 92.95 155.10 141.78
11
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Prior to its incorporation in Delaware on May 23, 1996 and November 1996
initial public offering, the Company operated as the Viisage Technology
Division of Lau. On November 6, 1996, Lau transferred substantially all of the
assets and liabilities of its Viisage Technology Division to Viisage in
exchange for shares of Viisage Common Stock. As of March 23, 2002, Lau directly
owns approximately 31.7% of the issued and outstanding Viisage Common Stock.
On January 10, 2002, Viisage acquired the assets of Lau Security Systems, a
division of Lau Technologies, including all of its intellectual property,
contracts and distribution channels. The intellectual property acquired from
Lau included, among other things, thirty-one U.S. or foreign patent grants or
applications for inventions relating to facial recognition technologies or the
production of identification cards, the patent acquired by Lau from Daozeng Lu
and Simon Lu for verifying the identity of an individual using identification
parameters carried on an escort memory, and numerous invention disclosures that
are being considered for patent application. The transaction also included an
exclusive license of Lau's rights to use the patented facial recognition
technology it licensed from MIT for use in the federal access control field. As
a result of this transaction, certain obligations on the part of Viisage to
license intellectual property to Lau were terminated. The Company will pay Lau
a royalty of 3.1% of facial recognition revenues over the next twelve and a
half years, up to a maximum of $27.5 million, and assume certain liabilities
related to the acquired business.
In connection with the asset transfer described above, the Company and Lau
terminated an existing Administration and Services Agreement (the "Services
Agreement"), pursuant to which Lau had provided the Company with certain
general accounting, data processing, payroll, human resources, employee
benefits administration, shipping and receiving, and certain executive services
to the Company. The termination was effective February 1, 2002, and the Company
is now performing these tasks internally.
The Company and Lau are parties to a Use and Occupancy Agreement for the
Company's use of certain office space for its corporate headquarters, which has
been extended through January 31, 2004. The Use and Occupancy Agreement
requires the Company to pay its proportionate share of the cost of shared
facilities and office services including rent, insurance, property taxes,
utilities, and other operating expenses, based on square footage or equipment
utilized. The 2001 annual fee for facilities and services was approximately
$217,000.
On March 18, 2002, Viisage acquired the capital stock of Biometrica Systems,
Inc. ("Biometrica"), a former licensee and distributor of Viisage's facial
recognition technologies in the casino market, for approximately $2.4 million
in cash. Biometrica's assets include, among other things, intellectual property
relating to the BiometriCam, a compact camera with built-in facial recognition
software.
License Arrangements
Pursuant to the asset sale described above, the Company has terminated all
license agreements with Lau and the parties are in the process of completing
the assignment to the Company of all contracts relating to the business of Lau
Security Systems, except to the extent that Lau has agreed to enter into
sub-licensing arrangements with the Company with respect to certain technology
that Lau is holding on the Company's behalf. This includes an arrangement
whereby Lau sub-licenses to the Company all of its rights under a license
agreement dated August 20, 1996, between Facia Reco Associates and Lau.
Additional Transactions
In May of 1999, the Company borrowed from Lau $1,000,000 under a convertible
subordinated note. On January 1, 2001, Lau converted this subordinated debt and
accrued interest into 847,354 shares of common stock.
12
From time to time the Company purchases certain system components and the
services of technical personnel from Lau. The amounts for such components and
services for 2001 were approximately $522,000. In addition, Lau has provided
Viisage with equipment lease financing and has agreed, in certain
circumstances, to guarantee certain of our contract obligations in exchange for
stock options and cash compensation. The Company had a project lease financing
arrangement with Lau that provided for up to $5.0 million of capital lease
financing. Viisage refinanced this note with a commercial leasing company in
July 2001 and terminated this financing arrangement.
Consulting Agreements
In connection with the purchase of the business of Lau Security Systems, the
Company entered into consulting agreements with Denis Berube, Executive Vice
President and Chief Operating Officer of Lau and Chairman of the Board of the
Company, and Joanna Lau, President and Chief Executive Officer of Lau and the
beneficial owner of more than 5% of the Company's outstanding stock. Under the
consulting agreements, each of Mr. Berube and Ms. Lau will receive annual
compensation of $125,000. Each agreement terminates at the earlier of the tenth
anniversary or the commencement of the consultant's full-time employment
elsewhere.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires the Company's executive officers,
directors and persons who own more than ten percent of a registered class of
the Company's equity securities ("Reporting Persons") to file reports of
ownership and changes in ownership on Forms 3, 4 and 5 with the SEC and The
Nasdaq Stock Market ("Nasdaq"). These Reporting Persons are required by SEC
regulation to furnish the Company with copies of all Forms 3, 4 and 5 they file
with the SEC and Nasdaq. The Company believes that all Reporting Persons have
complied with all filing requirements applicable to them with respect to
transactions during fiscal year 2001, except that corrective filings were made
for Messrs. Levine and Principato on Forms 5, filed with the SEC on February
15, 2002, to report a disposition of shares and a grant of additional options,
respectively. Additionally, a corrective filing was made on Form 4 and filed
with the SEC on or about April 10, 2002 by Lau to report the grant to certain
members of management of Lau of options to purchase shares of the Company's
Common Stock owned by Lau. Finally, Cameron Queeno, the Company's Vice
President of Sales, did not timely file a Form 3 reporting his initial holdings
of Viisage Stock; a corrective filing was made on Form 5 and filed with the
Commission on February 15, 2002.
SHAREHOLDER PROPOSALS
Shareholders may submit proposals on matters appropriate for shareholder
action at subsequent annual meetings of shareholders consistent with Rule 14a-
8 promulgated under the Securities Exchange Act of 1934, as amended. For such
proposals to be considered for inclusion in the Proxy Statement and Proxy
relating to the 2003 Annual Meeting of Shareholders, such proposals must be
received by the Company for inclusion in the Company's Proxy Statement and
proxy card relating to that meeting no later than December 12, 2002.
Pursuant to new amendments to Rule 14a-4(c) of the Exchange Act, if a
shareholder who intends to present a proposal at the 2003 Annual Meeting of
Shareholders does not notify the Company of such proposal on or prior to
February 25, 2003, then management proxies would be allowed to use their
discretionary voting authority to vote on the proposal when the proposal is
raised at the Annual Meeting, even though there is no discussion of the
proposal in the 2003 Proxy Statement.
SOLICITATION EXPENSES
The Company will bear the cost of this solicitation. Solicitation will be
made primarily by mail, but directors, officers, and employees of the Company
may solicit proxies in person or by telephone or telecopy. The Company will
request brokers, nominees, custodians, and fiduciaries to forward solicitation
materials to obtain voting instructions from beneficial owners and will
reimburse such parties for their reasonable expenses in connection therewith.
In addition, the Company retains Boston EquiServe as its transfer agent which
assists in the distribution of proxies.
13
INCORPORATION BY REFERENCE
To the extent that this Proxy Statement has been specifically incorporated
by reference into any filing by the Company under the Securities Act of 1933,
as amended, or the Securities Exchange Act of 1934, as amended, the sections of
the Proxy Statement entitled "Board Compensation Committee Report on Executive
Compensation," "Board Audit Committee Report" and "Performance Graph" shall not
be deemed to be so incorporated, unless specifically otherwise provided in any
such filing.
OTHER DOCUMENTS
Upon written request by anyone who is a shareholder as of the record date,
the Company will furnish, without charge, a copy of its Annual Report on Form
10-K. Such written request should be sent to the attention of the Controller,
Viisage Technology, Inc., 30 Porter Road, Littleton, MA 01460.
OTHER BUSINESS
The Board of Directors does not know of any matters which will be brought
before the Meeting other than those matters specifically set forth in the
Notice of the 2002 Annual Meeting of Shareholders. However, if any other matter
properly comes before the Meeting, it is intended that the persons named in the
enclosed proxy card, or their substitutes acting thereunder, will vote on such
matter in accordance with their best judgment.
14
APPENDIX A
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS OF
VIISAGE TECHNOLOGY, INC.
Organization
One committee of the board of directors (the "Board") of Viisage Technology,
Inc. (the "Company") will be known as the Audit Committee (the "Committee").
The membership of the Committee shall consist of at least three independent
directors. An independent director is free of any relationship that could
influence his or her judgment as a Committee member, and is not associated with
a major vendor to, or customer of, the Company. When there is some doubt about
independence, as when a member of the Committee has a short- term consulting
contract with a major customer, the member should recuse himself from any
decisions that might be influenced by that relationship. Each Committee member
must also meet the financial literacy requirements for serving on audit
committees, and at least one member must have accounting or related financial
management expertise, as set forth in the applicable NASDAQ rules.
One member of the Committee shall serve as Chair, who shall be responsible
for leadership of the Committee, including scheduling meetings when necessary,
presiding over meetings, preparing agendas, and making regular reports to the
Board. The Chair will also serve as a liaison between the Committee, the
Company's management and independent accountants.
Function
The primary function of the Committee is to assist the Board in fulfilling
its responsibility for oversight of the quality and integrity of the
accounting, auditing, internal control and financial reporting practices of the
Company. The Committee may also have such other duties as may from time to time
be assigned it by the Board.
I. General responsibilities
A. The Committee shall provide and maintain open avenues of communication
among the Company's management, employees, the independent accountant and the
Board.
B. The Committee must report Committee actions to the full Board and may
make appropriate recommendations.
C. The Committee has the power to conduct or authorize investigations into
matters within the Committee's scope of responsibilities. The Committee is
authorized to retain independent counsel, accountants or others it needs to
assist in an investigation.
D. The Committee will meet at least three times each year, and may meet
more frequently if circumstances dictate. The Committee may ask members of
management or others to attend the meeting and is authorized to receive all
pertinent information from management.
E. A Committee member should not vote on any matter in which he is not
independent.
F. The Committee will do whatever else the law, the Company's charter or
bylaws or the Board require.
A-1
II. Responsibilities for engaging independent accountants and appointing
financial management
A. The Committee will select the independent accountants for Company
audits. The Committee's selection is subject to approval by the full Board. The
Committee will review and set any fees paid to the independent accountants and
review and approve dismissal of the independent accountants.
B. The Committee will confirm and assure the independence of the
independent accountant. The Committee will obtain annually from the independent
accountants a formal written statement describing all relationships between the
auditors and the Company, consistent with the Independence Standards Board
Standard Number 1. The Committee shall discuss with the independent accountants
any relationships that may affect their objectivity and independence, and the
Committee may take, or recommend that the Board take, appropriate actions to
oversee itself as to the auditors' independence. The Committee will also
conduct a review of management consulting services provided by the independent
accountant and the fees paid for such services.
C. The Committee will consider, in consultation with the independent
accountant and the CFO, controller or internal auditor of the Company, the
audit scope and procedural plans made by the independent accountant.
D. The Committee will meet with management and the primary independent
auditor to consider possible needs to engage additional auditors. The Committee
will decide whether to engage an additional firm and, if so, which one.
E. The Committee will make sure that the CFO, controller or internal
auditor and the independent accountant coordinate the internal and external
audits. The purpose of coordinating these efforts is to assure completeness of
coverage, to reduce redundancy and to allocate the audit resources effectively.
F. The Committee will review, and have veto power over, the appointment,
replacement, reassignment or dismissal of the financial management of the
Company, including any CFO, controller and/or internal auditor, as applicable.
III. Responsibilities for reviewing internal audits, the annual external audit
and the review of quarterly and annual financial
statements
A. The Committee will ascertain that the independent accountant views the
Board as its client, that it will be available to meet with the full Board at
least annually, and that it will provide the Committee with a timely analysis
of significant financial reporting issues.
B. The Committee will ask management and the independent accountant about
significant risks and exposures and will assess management's steps to minimize
them.
C. The Committee will review the following with the independent accountant
and the CFO, controller or internal auditor, as applicable:
1. The adequacy of the Company's internal controls, including
computerized information system controls, security, budgets, results,
responsibilities, plans and staffing.
2. Any significant findings and recommendations made by the independent
accountant, together with management's responses to them.
D. Shortly after the annual audit is completed, the Committee will review
the following with management and the independent accountant:
1. The Company's annual financial statements and related footnotes.
A-2
2. The independent accountant's audit of and report on the financial
statements. The Committee's discussions with management and the independent
accountants shall include matters required to be discussed under Statement
of Auditing Standards No. 16.
3. The auditor's qualitative judgments about the appropriateness, as
well as the acceptability, of accounting principles and financial
disclosures, including the aggressive (or conservative) nature of the
accounting principles and underlying estimates.
4. Any serious difficulties or disputes with management encountered
during the course of the audit.
5. All other matters about the audit procedures or findings that GAAP
requires the auditors to discuss with the Committee.
E. The Committee will consider and review with management:
1. Any significant findings during the year and management's responses
to them.
2. Any difficulties encountered while conducting audits, including any
restrictions on the scope of their work or access to required information.
F. Based upon the Committee's review of the audited financial statements,
the Committee shall make recommendation to the Board as to the inclusion of the
Company's audited financial statements in the Company's Annual Report on Form
10-K.
G. The Committee will review annual filings with the SEC and other
published documents containing the Company's financial statements, and will
consider whether the information in the filings is consistent with the
information in the financial statements.
H. The Committee will review and discuss with the CFO, controller or
internal auditor and the independent accountants the information contained in
the interim financial reports before those interim reports are released to the
public or filed with the SEC or other regulators.
I. The Committee will discuss with management and the independent
accountants the earnings announcement prior to its release, if practicable.
J. The Committee will prepare a report for inclusion in the Company's
annual report that describes the Committee's composition and responsibilities,
and how the responsibilities were fulfilled.
IV. Periodic responsibilities
A. Review the Committee's charter annually.
B. Review policies and procedures governing officers' expense accounts and
perquisites, including their use of corporate assets, and consider the results
of any review of those areas by the independent accountant.
C. Review legal and regulatory matters that may have a material effect on
the organization's financial statements, compliance policies and programs, and
reports with regulators.
D. Meet with the independent accountant and management in separate
executive sessions to discuss any matters the Committee or these groups believe
should be discussed privately with the Committee.
* * * * * * *
While the Audit Committee has the duties and responsibilities set forth in
this charter, the Audit Committee is not responsible for planning or conducting
the audits or for determining whether the Company's financial statements are
complete and accurate and are in accordance with generally accepted accounting
principles. Similarly, it is not the duty of the Audit Committee to conduct
investigations, to resolve disagreements, if any, between management and the
independent auditor or to ensure that the Company complies with laws and
regulations and its policies and procedures.
A-3
DETACH HERE
PROXY
VIISAGE TECHNOLOGY, INC.
30 Porter Road
Littleton, Massachusetts
Proxy Solicited by the Board of Directors
of Viisage Technology, Inc.
for the 2002 Annual Meeting of Shareholders
The undersigned hereby appoints as proxies Thomas J. Colatosti, Sean F. Mack
and Charles J. Johnson, and each of them or such other persons as the Board of
Directors of Viisage Technology, Inc. (the "Company") may designate, with full
power of substitution. The undersigned hereby authorizes the above appointed
proxies to represent and to vote, as designated on the reverse side, all shares
of common stock of the Company held of record by the undersigned on April 1,
2002 at the 2002 Annual Meeting of Shareholders to be held on May 14, 2002, at
1:30 p.m. at the Omni Parker House, 60 School Street, Boston, Massachusetts, and
any adjournments thereof.
This proxy when properly executed will be voted as directed. If no direction
is given, the proxy will be voted FOR the nominees for director, FOR proposals
one and three, and in accordance with the proxy holders' discretion respecting
any other matters as may properly come before the meeting.
Please mark, date, sign and return this proxy card promptly.
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
VIISAGE TECHNOLOGY, INC.
C/O EQUISERVE
P.O. BOX 43068
PROVIDENCE, RI 02940
DETACH HERE
ZVIT11
[X] Please mark
votes as in
this example.
1. To ratify the Board of Directors' decision 2. Election of three Class III Directors 3. To ratify the selection of BDO
to fix the number directors at seven for a three-year term. Seidman, LLP as independent public
and the number of Class III directors at accountants for Viisage for the year
three. ending December 31, 2002.
FOR AGAINST ABSTAIN Nominees: (01) John C. Gannon, FOR AGAINST ABSTAIN
[ ] [ ] [ ] (02) Peter Nessen, and [ ] [ ] [ ]
(03) Thomas J. Reilly
FOR WITHHELD
[ ] [ ]
4. To transact such other business as
may properly come before the
meeting.
--------------------------------------
For all nominees except as noted above
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
Please sign exactly as your name appears hereon.
Joint owners should each sign. Executors,
administrators, trustees, guardians or other
fiduciaries should give full title as such. If
signing for a corporation, please sign the full
corporate name by a duly authorized officer.
Signature: Date: Signature: Date: