exv4w3






Exhibit 4.3









NON-QUALIFIED STOCK OPTION AWARD GRANTED UNDER THE

DIGITAL ANGEL CORPORATION (f/k/a APPLIED DIGITAL SOLUTIONS, INC.)

2003 FLEXIBLE STOCK PLAN, AS AMENDED




Name of Option Recipient: Jeremy Harrison



On December 12, 2008, the Company awarded you a stock option. You were granted an option to buy
7,000 Shares of the Common Stock at the price of $0.52 per Share. Your right to exercise the
option granted vests on or after the dates shown in the following schedule:




	 	 	 
	Vesting Date	 	Number of Shares Vested
	December 12, 2009
	 	2,333
	December 12, 2010
	 	2,333
	December 12, 2011
	 	2,334





You must exercise any vested option pursuant to this option grant no later than December 12, 2018,
(the “Option Expiration Date”).



IMPORTANT: By signing below, you agree to be bound by, and acknowledge receipt of, the attached
Terms and Conditions of this Non-Qualified Stock Option Award and the Digital Angel Corporation
2003 Flexible Stock Plan, as amended.




	 	 	 	 	 
	 	DIGITAL ANGEL CORPORATION

 	 
	 	/s/ Lorraine Breece 	 
	 	Lorraine Breece 	 
	 	Chief Financial Officer 	 
	 



Read and agreed to this




30th day of
March 2009.






/s/ Jeremy Harrison                   


Jeremy Harrison





 









 





TERMS AND CONDITIONS

NON-QUALIFIED STOCK OPTION AWARD GRANTED UNDER

DIGITAL ANGEL CORPORATION

(f/k/a APPLIED DIGITAL SOLUTIONS, INC.)

2003 FLEXIBLE STOCK PLAN




1. Definitions




	 	 	 	 	 
	(a)

	 	Committee
	 	The Committee (or, in certain cases, its
designees) who administers the Stock Option Plan.
	 
	 	 	 	 
	(b)

	 	Company
	 	Digital Angel Corporation, a Delaware corporation.
	 
	 	 	 	 
	(c)

	 	Option
	 	The option granted by the Option Award.
	 
	 	 	 	 
	(d)

	 	Option Award
	 	The Non-Qualified Stock Option Award to which
these Terms and Conditions are attached, except
where the context requires otherwise.
	 
	 	 	 	 
	(e)

	 	Participant
	 	The recipient of an Option Award.
	 
	 	 	 	 
	(f)

	 	Stock Option Plan
	 	Digital Angel Corporation (f/k/a Applied Digital
Solutions, Inc.) 2003 Flexible Stock Plan, as
amended.






All capitalized terms not otherwise defined herein shall have the meanings given to such terms by
the Stock Option Plan.



2. Evidence of Option Grant and Option; not an Incentive Stock Option



The Option Award evidences a grant to the Participant of an Option to purchase that number of
Shares (“Optioned Shares”) of the par value $.01 per share Common Stock of the Company (“Stock”)
set forth on the Option Award. The Participant may exercise the Option as shown on the Option
Award. In no event shall the Option or any part of the Option be exercisable after the Option
Expiration Date. The Option shall not be treated as an “Incentive Stock Option”, as defined in
Section 422 of the Internal Code of 1986, as amended (“Code”), notwithstanding the fact that
certain provisions of these Terms and Conditions incorporate portions of Code Section 422 and/or
comply with the requirements of such section.




3. Exercise of Option



Option shall be exercised by the Participant delivering a written notice of exercise to the
Company’s office at 490 Villaume Avenue; South St. Paul, MN 55075-2445. This notice shall specify
the number of Optioned Shares the Participant then desires to purchase.




4. Payment of Option Price



Payment for the Shares purchased under the Option shall be made to the Company in cash (including
wire transfer, cashier’s check, bank draft or money order) or “net exercise” in which case Optionee
shall receive shares of Company common stock for the value of the option on the date of exercise.
[For example, if Optionee holds an option to purchase 100 shares exercisable at $1.00 per share and
the market price on the date of exercise is $2.00, then on the date of net exercise, the Optionee
would receive 50 shares of common stock on full exercise of the option, less applicable required
withholdings.]




 









 







In addition to the foregoing methods of payment, payment of the Option price may also be made by
“cashless exercise” or any other form determined by the Committee in its discretion at the time of
exercise to be acceptable, including payment, at the discretion of the Committee, be made in whole
or in part in other property, rights and credits, including the Participant’s promissory note.




5. Form of Notice of Exercise



The Participant’s notice as required by Section 3 shall be signed by the Participant and shall be
in substantially the following form with appropriate adjustments depending on how the Option price
is paid:




“I hereby exercise my Option to purchase                      Shares in accordance with my Option
Award dated         ,
                   , granted under the Company’s 2003 Flexible Stock Plan, as amended.



The aggregate Option price of the Shares I am purchasing is $                    . I hereby tender
in payment of such price by wire transfer, cashier’s check, bank draft or money order made
payable to the Company in the amount of $                    . [or] I request “net exercise” of my
Option.



If the Shares purchased have not been registered under the Securities Act of 1933, I
hereby further represent to the Company that I am acquiring the                      Shares that I am
purchasing solely for investment and solely for my own account and that I have no present
intention of selling or offering for sale any of such Shares to any other person or
persons.”



6. Stock Certificates



Upon the exercise of the Option solely for cash or cash and property (other than Stock), rights
and/or credits specifically permitted by the Committee, the Participant shall be entitled to one
Stock certificate evidencing the Shares acquired upon exercise.




7. Legends on Certificates



The certificate or certificates to be issued under Section 6 shall be issued as soon as
practicable. Such certificate or certificates shall contain thereon a legend in substantially the
following form if the Shares evidenced by such certificate have not been registered under the
Securities Act of 1933, as amended:





“The shares represented by this certificate have not been registered under the Securities
Act of 1933 or any applicable state law. They may not be offered for sale, sold,
transferred or pledged without (1) registration under the Securities Act of 1933 and any
applicable state law, or (2) at holder’s expense, an opinion (satisfactory to the Company)
that registration is not required.”


The certificates shall also contain such other legends as may be appropriate or required by law,
such as a legend relating to any shareholders agreement that may apply to the Shares.




8. Termination of Employment; Nonassignability




     8.1 Voluntary Quit or Termination for Cause After Option is Vested. If, on or after
the date that the Option shall have first become exercisable, the Participant’s employment shall be
terminated by the Participant prior to age 65, or by the Employer for “Cause”, as defined below,
then the Participant’s full interest in the Option shall terminate on the date of such termination
of employment and all rights thereunder shall cease. Whether a Participant’s employment is
terminated for Cause shall be determined by the Committee. Cause shall include, but not be limited
to gross negligence, willful misconduct, flagrant or repeated violations of the Employer’s
policies, rules or ethics, a material breach by the Participant of any employment agreement between
the Participant and the Employer, intoxication, substance abuse, sexual or other unlawful
harassment, disclosure of confidential or proprietary information, engaging in a business
competitive with the Employer, or dishonest, illegal or immoral conduct.



 









 





     8.2 Other Termination After Option is Vested. If, on or after the date that the
Option shall first have become exercisable, the Participant’s employment shall be terminated for
disability (as such term is defined at Section 422(c)(6) of the Code), death, or termination by
the Participant after he has attained age 65, the Participant or his personal representative and/or
beneficiary, as the case may be, shall have the right to exercise such Option within a period of
three (3) years after the date of such termination, but in no case later than the Option Expiration
Date to the extent that such Option or any installment thereof shall have accrued at the date of
such termination of employment and shall not have been exercised.


Unless otherwise determined in the sole discretion of the Committee, upon termination of the
Participant’s employment or other relationship with the Company or with an Affiliate by the
Employer without Cause, this Option shall be come immediately vested in full and Participant shall
have the right to exercise this Option for the remainder of the term.




     8.3 Option Not Vested. If the Participant’s employment shall terminate before the
Option shall have first become exercisable, then the Participant’s full interest in the Option
shall terminate and all rights thereunder shall cease.



     8.4 Director Options. The employment of a member of the board of directors of an
Employer (“Director”) shall be terminated when he ceases to be a Director. If a Participant is
both a Director and an Employee, his employment shall not be deemed to have been terminated as long
as he remains a Director or an Employee, as the case may be.


The employment of a Director shall be deemed to have been terminated by the Employer without Cause
if the Participant ceases to serve in such position solely due to the failure to be reelected or
reappointed, as the case may be, and such failure is not a result of an act or omission which would
constitute Cause.




     8.5 Non-Transferability of Rights; Designation of Beneficiaries. The Option shall not
be transferable by the Participant otherwise than by will or the laws of descent and distribution
or as provided in this Section 8.4. During the lifetime of the Participant the Option shall be
exercisable only by the Participant. The Participant, however, may file with the Company a written
designation of a beneficiary or beneficiaries to exercise, in the event of death of the
Participant, the Option granted hereunder, subject to all of the provisions of this Section 8. A
Participant may from time to time revoke or change any such designation of beneficiary and any
designation of beneficiary under the Plan shall be controlling over any other disposition,
testamentary or otherwise; provided, however, that if the Committee shall be in doubt as to the
right of any such beneficiary to exercise the Option, the Committee may determine to recognize only
an exercise by the personal representative of the estate of the Participant, in which case the
Company, the Committee and the members thereof shall not be under any further liability to anyone.



     8.6 Deemed Termination of Employment and Transfer. If the Employer that employs the
Participant (or of which the Participant is a Director) ceases to be an Employer, the Participant’s
employment shall be deemed to have been terminated by such Employer without Cause as of the date
that it ceases to be an Employer. The transfer of a Participant’s employment (or a Director’s
service as a Director) from one Employer to another Employer shall not be deemed a termination of
employment.



9. Withholding



The Company or any Affiliate that employs the Participant shall have the right to deduct any sums
that federal, state or local tax law requires to be withheld with respect to the exercise of the
Option, or as otherwise may be required by such laws. The Company or any such Affiliate may
require as a condition to issuing Stock upon the exercise of the Option that the Participant or
other person exercising the Option pay any sum that federal, state or local tax law requires to be
withheld with respect to such exercise. In the alternative, the Participant or other person
exercising the Option, may elect to pay such sums to the Company or the Affiliate delivering
written notice of that election to the Company’s office at 490 Villaume Avenue; South St. Paul, MN
55075-2445, prior to or concurrently with exercise. Such payment shall be made in cash or through
surrender of shares to be obtained on exercise. There is no obligation that the Participant be
advised of the existence of the tax or the amount which the employer corporation will be so
required to withhold.




 









 








10. Right to Exercise Acceleration



On or before the Option Expiration Date, the Option shall be immediately exercisable in full upon a
Change of Control or upon the occurrence of any of the following events:





	 	(a)	 	the acquisition with the approval of the Board by any person or entity other than the
Company or a related entity of more than 50% of the combined voting securities of the
Company on a fully diluted and/or converted basis through a tender offer, exchange offer or
otherwise;
	 
	 	(b)	 	the sale or disposition of all or substantially all of the Company’s assets unless
shareholders of the Company prior to such sale or disposition own at least 50% of the
voting stock on a fully diluted and/or converted basis of the purchaser and the purchaser
assumes the Option on a financially equivalent basis;
	 
	 	(c)	 	a merger or consolidation involving the Company where shareholders of the Company do
not own at least 50% of the voting stock of the surviving entity on a fully diluted and/or
converted basis; or
	 
	 	(d)	 	any time during any two year period in which individuals who constituted the Board at
the start of such period (or, except for a transaction described in (a) or (c), whose
election was approved by at least two-thirds of the then members of the Board who were
members at the start of the two year period, do not constitute at least 50% of the Board
for any reason.





11. Stock Option Plan Controls



The Option Award and these Terms and Conditions are subject to all terms and provisions of the
Stock Option Plan which is incorporated herein by reference. In the event of any conflict, the
Stock Option Plan shall control over the Option Award and these Terms and Conditions.