Exhibit 10.30
August 6, 2007
Mr. Kevin McGrath
3778 Coventry Lane
Boca Raton, Florida 33496
Re: Letter Agreement
Dear Kevin:
As discussed, this Letter Agreement sets forth our mutual understanding with
regard to your departure from Digital Angel Corporation (“Digital Angel”) and
your resignation as a member of the Board of Directors (the “Board”) and as
President and Chief Executive Officer. In consideration of our mutual promises
and agreements, and the payments set forth herein, we agree as follows:

  1.   The effective date of your resignation as a director and officer is
August 6, 2007. The Board will name a new President and CEO immediately and you
will work with him to effect a smooth transition until your departure on
September 7, 2007. A smooth transition will include your complete cooperation
with the new President and CEO to facilitate employee, customer, operationally,
regulatory, and other normal course of business initiatives and continuity until
September 7, 2007.     2.   As consideration for your years of service to
Digital Angel, for your efforts in a smooth transition as set forth above, and
for your promises and agreements in this Letter Agreement, Digital Angel agrees
to pay to you $320,000 over the next 12 months in accordance with its ordinary
payroll practices, less required deductions and withholdings, and to grant to
you restricted common stock with a total value of $430,000. The number of shares
of restricted stock to be granted shall be determined by dividing $430,000 by
the closing price of Digital Angel’s common stock at the close of business on
August 8, 2007. The stock will be issued to you on September 7, 2008 and will
bear a standard restrictive legend providing that such stock may not be sold,
transferred, pledged, assigned, or otherwise encumbered or disposed of by you
for a period of one year. Although the substantive terms of the restricted stock
grant shall be as set forth in this paragraph, the final structure of the stock
grant will be finalized by mutual agreement between us, subject to advice you
will seek from your financial advisors.

 

 

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  3.   Digital Angel agrees to pay to you all of your accrued benefits through
September 7, 2007, including unused vacation time, reimbursement of outstanding
business expenses, accrued but unpaid salary or bonus amounts, and the like.    
4.   Digital Angel agrees to reimburse to you the cost of COBRA contributions
through September 7, 2008.     5.   You hereby agree to waive all claims against
Digital Angel (for purposes of this paragraph 6 and paragraphs 7 and 8 below,
“Digital Angel” includes Digital Angel, its subsidiaries, affiliates,
shareholders, directors, officers, employees, or agents) and release and
discharge Digital Angel from liability for any claims or damages that you may
have against Digital Angel as of the date of this Letter Agreement, whether
known or unknown to you including, but not limited to, any claims arising out of
your employment relationship with Digital Angel or termination thereof, or
violations of any federal, state, or local fair employment practices law,
including Title VII of the Civil Rights Act, Section 1981 of the Civil Rights
Act of 1866, the Americans with Disabilities Act, the Family and Medical Leave
Act, the Employee Retirement Income Security Act of 1974, the Age Discrimination
in Employment Act, the WARN Act, or any other federal, state or local employee
relations statute, rule, executive order, law or ordinance, tort, express or
implied contract, employment agreement, public policy, or other obligations or
any right under any company pension, welfare or stock plans, bonus plan,
vacation or other benefits, or attorneys fees.     6.   You agree that you will
not disclose, or cause to be disclosed in any way, any confidential information,
trade secrets or other proprietary information that you in any way acquired
during your employment with Digital Angel, provided however that nothing in this
Letter Agreement would prevent you from complying with any court order or
subpoena compelling you to furnish information or provide testimony relating to
Digital Angel. You further agree that you will return any company documents
and/or other property that you have in your possession or in your control to
Digital Angel.     7.   You agree that, until September 7, 2008, you will not:

  (a)   Engage, directly or indirectly, in any business, whether as employee,
officer, director, or owner, that is engaged in any activity that is directly
competitive with any business that Digital Angel currently conducts, limited in
geographic scope to those locations where Digital Angel currently conducts such
business;     (b)   Solicit business of the same or similar type being carried
out by Digital Angel, whether or not you had personal contact with such person
or entity during your employment with Digital Angel;     (c)   Solicit or employ
any person who is an employee of Digital Angel or in any manner induce any
employee of Digital Angel to terminate his or her employment; or     (d)  
Disparage Digital Angel, so long as Digital Angel does not disparage you.

 

 

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  8.   This Letter Agreement constitutes the entire agreement and understanding
between us regarding the terms of your separation from Digital Angel, and all
prior agreements between us, whether written or not, are hereby replaced and
superceded in their entirety.

Please sign and return the Letter Agreement to me signifying your agreement to
the terms set forth herein. Thank you.
Sincerely,
/s/ Howard S. Weintraub
Dr. Howard S. Weintraub
Chairman of the Compensation Committee of the
Digital Angel Corporation Board of Directors
AGREED AND ACCEPTED:
/s/ Kevin N. McGrath          
Kevin N. McGrath