General Counsel Employment Agreement

Exhibit 10.7

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AGREEMENT is made and entered into as of February 5, 2007, by and between Cross Match Technologies, Inc., a Delaware corporation headquartered in Palm Beach Gardens, Florida (the " Company" ), and William A. Smith II (the " Executive" ). This Agreement amends and restates in its entirety that certain Employment Agreement between the Company and Executive dated July 1, 2005.

In consideration of the mutual covenants herein contained and of the mutual benefits herein provided, the Company and the Executive agree as follows:

1. Representations and Warranties

The Executive represents and warrants to the Company that as of the Commencement Date, the Executive will not be bound by any restrictive covenants and will have no prior or other obligations or commitments that would in any way prevent, restrict, hinder or interfere with the Executive' s acceptance of continued employment or the performance of all duties and services hereunder to the fullest extent of the Executive' s ability. 2. Employment

The Company will employ the Executive and the Executive accepts employment by the Company on the terms and conditions herein contained.


1 3. Duties and Functions

(a) (1) The Executive shall be employed as Senior Vice President, General Counsel, Secretary and Director of Corporate Development of the Company and shall perform such duties as are customarily performed by a person holding such positions. In his capacity as Senior Vice President, General Counsel, Secretary, the Executive shall report directly to the Company' s Board of Directors or such persons as designated by the Company' s Board of Directors. In his capacity as Director of Corporate Development, the Executive shall report directly to the Company' s Chief Executive Officer.

(2) The Executive agrees to undertake the duties and responsibilities inherent in the positions of Senior Vice President, General Counsel, Secretary and Director of Corporate Development, which may encompass different or additional duties as may, from time to time, be reasonably assigned by the Board of Directors or the Chief Executive Officer, and the duties and responsibilities undertaken by the Executive may be reasonably altered or modified from time to time by the Board of Directors or the Chief Executive Officer provided, however, the Executive' s duties and responsibilities shall be no less than those traditionally inherent in the positions of Senior Vice President, General Counsel, Secretary and Director of Corporate Development. The Executive agrees to abide by the rules, regulations, instructions, personnel practices and policies of the Company and any change thereof that are applicable to the employees of the Company in general.

(b) The Executive will devote his full business time and efforts to the business of the Company and will not engage in consulting work or any trade or business for his own account or for or on behalf of any other person, firm or corporation that competes, conflicts or materially interferes with the performance of his duties hereunder in any way.


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(c) Upon the termination of the employment relationship with the Company for any reason, the Executive shall be deemed to have resigned his position as an officer of the Company and any subsidiaries thereof effective on the date of termination.

4. Compensation

(a) Base Salary. As compensation for his services hereunder, during the Executive' s employment as Senior Vice President, General Counsel, Secretary and Director of Corporate Development, the Company agrees to pay the Executive a base salary at the rate of Three Hundred and Thirty Thousand Dollars ($330,000) per annum (the " Base Salary" ), payable in accordance with the Company' s normal payroll schedule. The Company may withhold from any amounts payable under this Agreement such federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation. The Executive' s salary shall be subject to annual review, based on corporate policy and contributions made by the Executive to the enterprise, but shall not be decreased other than in connection with a general decrease in base salaries applicable to all senior executives of the Company.

(b) Stock Options. The Executive has been awarded a total of Five Hundred and Fifty Thousand (550,000) shares of Common Stock of the Company (the " Options" ) pursuant to the Cross Match Technologies, Inc. Amended and Restated Stock Incentive Plan (the " Stock Incentive Plan" ). The terms and conditions of the Options are governed by certain Stock Option Certificates and Agreements substantially in the form attached as Exhibit A , executed by the parties hereto.


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(c) Business Expenses. In addition to the compensation provided for above, the Company agrees to pay or to reimburse the Executive during his employment for all reasonable, business or entertainment expenses incurred in the performance of his services hereunder in accordance with Company policy in effect from time to time, including, without limitation, expenses relating to (i) annual dues of the official bars of courts or states of which the Executive was a member as of July 1, 2005; and (ii) membership in the American Bar Association (and up to two sections thereof) and the American Corporate Counsel Association. The Executive shall submit vouchers and receipts for all expenses for which reimbursement is sought.

(d) Vacation. The Executive shall be entitled to three (3) weeks of paid vacation during each calendar year in accordance with the Company' s vacation policy. (e) Fringe Benefits. In addition to his compensation provided by the foregoing, the Executive shall be entitled to participation in and to the benefits available generally to Company executives pursuant to Company programs, including, by way of illustration, personal leave, paid holidays, sick leave, disability, dental, vision, group sickness, accident or health insurance programs of the Company which may now be in effect, or in any other such programs which may be established by the Company, as and to the extent any such programs are or may from time to time be in effect, subject to the applicable terms and conditions of the benefit plans in effect at any particular time.


4 5. Commencement; Termination

(a) Commencement. The Executive' s employment hereunder shall be deemed to have commenced on July 1, 2005 (the " Commencement Date" ), and, unless terminated earlier as provided in this Section 5, shall continue until the close of business on the third anniversary of the Commencement Date.

(b) Termination By Executive Without Good Reason. The Executive may terminate the employment relationship hereunder at any time without Good Reason (as defined in Section 5(g)) by giving the Company written notice at least forty-five (45) days prior to the effective date of termination. The Company, at its election, may (i) require the Executive to continue to perform his duties hereunder for the full forty-five (45) day notice period, or (ii) terminate the Executive' s employment effective as of any date during such forty-five (45) day notice period, provided that any such acceleration of the termination shall not be deemed to be a termination of the Executive' s employment by the Company without Cause. All compensation and benefits paid by the Company to the Executive shall cease upon the effective date of termination of employment without Good Reason, except for any accrued but unpaid salary through the effective date of such termination, and unpaid Accrued Benefits (" Accrued Benefits" shall mean those benefits described in Sections 4 (c), (d), and (e) through the effective date of such termination).

(c) Termination By Company For Cause. The Company may terminate the Executive' s employment hereunder for " Cause." As used in this Agreement, the term " Cause" shall mean termination because of: (1) the Executive' s conviction of, or plea of guilty or nolo contendere to, a felony or crime involving moral turpitude (which, through lapse of time or


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otherwise, is not subject to appeal); (2) the Executive' s breach of material duties or willful refusal without proper cause to adequately perform his obligations or duties under this Agreement; (3) except in the performance of his duties, any material disclosure by the Executive to any person, firm, or corporation other than the Company, its subsidiaries, and its and their directors, officers, and employees, of any confidential or proprietary information or trade secret of the Company, any of its subsidiaries, or of any client or customer which has entrusted such confidential information or trade secrets to the Company with the understanding that the confidentiality of such information would be maintained; (4) the Executive' s willful pursuit of activities inimical or otherwise contrary to the best interests of the Company, and which are reasonably likely to result in material and demonstrable harm to the Company; (5) the Executive' s engagement in criminal, illegal, or fraudulent conduct or conduct involving moral turpitude that could cause harm to the Company or its image; (6) the Executive' s failure or refusal to comply with material policies, standards or regulations of the Company which from time to time may be established; or (7) the performance by the Executive of any act or omission demonstrating an intentional or reckless disregard of the interests of the Company. Such termination shall be effective immediately upon notice of termination by the Company to the Executive unless the Company in its sole discretion believes that the action creating the termination for Cause may be corrected or cured, in which event the Company shall give the Executive fifteen (15) days written notice prior to terminating the Executive' s employment for " Cause," setting forth the exact nature of any alleged action and the conduct required to cure such breach. The Executive shall have fifteen (15) days from the giving of such notice within which to cure the alleged cause for termination. All compensation and benefits paid by the Company to the Executive shall cease upon the effective date of termination of employment, except for any accrued but unpaid Base Salary through the effective date of such termination, and unpaid Accrued Benefits.

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(d) Termination By Company Without Cause. Upon written notice, the Company may terminate the Executive' s employment hereunder without Cause. Upon the termination by the Company of the Executive' s employment without Cause the Executive shall be entitled to his Accrued Benefits and (i) continuation of his Base Salary for a period of twelve (12) months from the effective date of such termination (the " Severance Period" ) payable in accordance with the Company' s normal payroll schedule (" Salary Continuation" ) and (ii) continued vesting of shares subject to the Options on the same basis as if the Executive were employed by the Company during such Severance Period (such continued vesting, together with the Salary Continuation, the " Severance Pay" ). The Executive shall have no duty to mitigate his damages or seek employment during the Severance Period and any earnings by the Executive during the Severance Period shall not reduce the Severance Pay or affect the obligations of the Company with respect to the Severance Pay. Notwithstanding anything in this Employment Agreement or the Stock Option Certificate and Agreement (attached hereto as ...