8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of

The Securities Exchange Act of 1934

Date of report (Date of earliest event reported): September 29, 2005

ActivCard Corp.

(Exact Name of Registrant as Specified in Charter)

Delaware	000-50223	45-0485038
(State or Other Jurisdiction Of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

6623 Dumbarton Circle, Fremont, California	94555
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (510) 574-0100

Not Applicable

(Former Name or Former Address, if Changed Since Last Report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry Into a Material Definitive Agreement.

On September 29, 2005, ActivCard Corp. (the “Company”) entered into an Employee Retention Bonus Agreement (the “Agreement”) with Ragu Bhargava, who previously announced his intention to voluntarily resign his position as the Chief Financial Officer of the Company. Under the terms of the Agreement, Mr. Bhargava will continue to perform the duties of the Chief Financial Officer through December 15, 2005 in consideration for a one-time retention bonus of $100,000 and the Company’s agreement to pay the cost for group employee benefit coverage continuation to the same extent previously provided under the Company’s group plans until the earlier of June 15, 2006 or when Mr. Bhargava becomes eligible for group insurance benefits from another employer. This retention bonus will be paid to Mr. Bhargava within thirty days after December 15, 2005. Mr. Bhargava will continue to receive his current compensation and other benefits through December 15, 2005. A copy of the Agreement is attached hereto as Exhibit 10.1.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits

Exhibit No.	Description
10.1	Employee Retention Bonus Agreement, dated September 29, 2005, by and between ActivCard Corp. and Ragu Bhargava.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		ActivCard Corp.
		(registrant)
Date:	October 3, 2005	By:	/s/    RAGU BHARGAVA
			Ragu Bhargava Senior Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
10.1	Employee Retention Bonus Agreement, dated September 29, 2005, by and between ActivCard Corp. and Ragu Bhargava.

EX-10.1

Exhibit 10.1

Employee Retention Bonus Agreement

ActivCard, Inc. (“Company”), has determined that it is critical to the operation of the Company that Ragu Bhargava (“Employee”) remains in its employ through December 15, 2005 (“Key Date”). Employee previously announced his intention to voluntarily resign his position. In order to encourage Employee to continue to provide employment to the Company through Key Date and remain employed through Key Date, the Company shall provide the Employee with a Retention Bonus (as described below) conditional upon Employee remaining employed through Key Date. Through this period, Employee will continue to perform the duties and obligations of the CFO office, including the closing of the fiscal 2005 financial statements, the filing of the Annual Report on Form 10-K and providing the certifications required under the Sarbanes Oxley Act, as well as assisting with an orderly transition of duties to his replacement as CFO.

Employee will continue to receive his current compensation and benefits through December 15, 2005, will continue participation in the FY’05 Annual Bonus Plan and his existing stock options and restricted stock grants will continue to vest per the standard terms and conditions of the grant agreements.

Conditional upon Employee remaining through Key Date, the Retention Bonus is as follows:

1. Additional payment of $100,000.00, equivalent to six months’ base salary, less deductions required by law, as a lump sum retention bonus payment to Employee within thirty (30) days of Key Date.

2. The Company will continue to pay the cost for group employee benefit coverage continuation under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) to the same extent previously provided by the Company’s group plans through June 15, 2006, or until Employee becomes eligible for group insurance benefits from another employer, whichever occurs first. Employee understands that Employee has an obligation to inform the Company if Employee receives group health coverage from another employer before June 15, 2006 and that Employee may not increase the number of Employee’s designated dependants if any, during this time unless Employee does so at Employee’s own expense. The period of such Company paid COBRA coverage shall be considered part of Employee’s COBRA coverage entitlement period, and may, for tax purposes, be considered income to Employee.

3. It is a condition to earning any Retention Bonus that Employee remain employed through the Key Date. No Retention Bonus shall be provided to Employee if:

a. Employee resigns prior to Key Date; or

b. Employee is terminated for “Good Cause” (as defined below).

4. If, however, Employee is terminated for other than Good Cause prior to the Key Date, then the Company will provide Employee the Retention Bonus as if Employee had remained employed through the Key Date.

5. Definitions: For purposes of this Agreement only, “Good Cause” shall mean:

(i) Employee’s performance of any act for which, if Employee were prosecuted, would constitute a felony or misdemeanor; (ii) Employee’s failure to satisfactorily carry out Employee’s duties; (iii) Employee’s dishonesty towards or fraud upon the Company; (iv) Employee’s violation of confidentiality obligations to the Company or misappropriation of Company assets; or (v) Employee’s death or inability to carry out Employee’s essential duties with reasonable accommodation, if any, unless prohibited by law.

6. Nothing herein modifies the Company’s at-will employment policy, nor does anything herein guarantee Employee the right of continued employment prior to or through the Key Date.

7. This Agreement cannot be modified or changed in any way except in writing, signed by the Company’s Chief Executive Officer. This Agreement shall be governed by California law. If any provision is deemed to be invalid or unenforceable, the remainder of the Agreement shall be given full force and effect.

		ActivCard Inc.
Date:	September 29, 2005	By:	/s/    BEN C. BARNES
			Ben C. Barnes, CEO
Date:	September 29, 2005	/s/    RAGU BHARGAVA
		Employee