EX-10.2 2007 Senior Management Incentive Plan



 





EXHIBIT
10.2




VeriChip Corporation

Memorandum




	 	 	 	 	 
	To:
	 	Daniel A. Gunther

	 	March 2, 2007
	 
	 	 
	 	 
	From:
	 	Scott Silverman
	 	 
	 
	 	 
	 	 
	Re:
	 	2007 Senior Management Incentive Compensation Plan
	 	 






In addition to your base salary, we are pleased to offer you the following incentive compensation
for the fiscal year ended December 31, 2007. This Plan was approved by the Compensation Committee
of the Board of Directors of VeriChip Corporation, a Delaware corporation (the “Company”), on the
date hereof.



Your target incentive compensation is C$500,000 and is based upon the achievement of specific
revenue and EBITDA objectives. EBITDA is defined as the consolidated Earnings before Interest,
Taxes, Depreciation and Amortization of VeriChip Corporation, a Canadian corporation (“VeriChip
(Canada)”), and VeriChip Holdings, Inc., a Canadian corporation (“VeriChip Holdings”), prior to any
expense accrual associated with a management fee payable to VeriChip Corporation, the Delaware
corporation. These targets and the related incentive compensation are divided into the following
three components:




	 	•	 	Quarterly for achieving revenues objectives — C$200,000
	 
	 	•	 	Annual for achieving revenues and EBITDA objectives — C$200,000
	 
	 	•	 	Annual for exceeding revenues and EBITDA objectives — C$100,000





Quarterly Incentive Compensation for Achieving Revenue Objectives




Your quarterly incentive compensation is calculated based upon the achievement of year-to-date
revenue from VeriChip (Canada) and VeriChip Holdings relative to the budgeted revenues of
US$32,004,000. Your quarterly incentive compensation will be calculated at the end of each fiscal
quarter; is earned in the quarter to which it relates; and shall be paid within 45 calendar days of
the end of each quarter.



The following is the formula for your quarterly incentive compensation calculation:



(Year-to-Date Revenue to the end of the Fiscal Quarter) / (Annual Revenue Budget of US$32,004,000)
* (Target Quarterly Incentive Compensation of C$200,000) = Actual Quarterly Incentive Compensation



If year-to-date revenue to the end of any fiscal quarter does not exceed the following minimum
year-to-date revenue thresholds at the end of each quarter no additional incentive compensation
shall be paid with respect to such quarter.




	 	•	 	As of March 31, 2007 — US$7,019,000 (100% of US$7,019,000)




 









 












	 	•	 	As of June 30, 2007 — US$14,202,500 (95% of US$14,950,000)
	 
	 	•	 	As of September 30, 2007 — US$21,761,650 (95% of US$22,907,000)
	 
	 	•	 	As of December 31, 2007 — US$30,403,800 (95% of US$32,004,000)





Payments of quarterly incentive compensation in the 2nd, 3rd and
4th quarters will be reduced by the actual amount paid in respect of previous quarters.
The maximum amount that you can earn during 2007 from this quarterly incentive compensation is
C$200,000.



The determination of whether incentive compensation with respect to a quarter has been earned shall
be based on the Company’s financial statements with respect to such quarter (or year to date
period) as filed with the United States Securities and Exchange Commission (the “Commission”) and,
to the extent earned as provided above, will be paid as soon as practicable, but in no event later
than 5 business days, after such financial statements have been so filed with the Commission. You
will be entitled to incentive compensation with respect to a quarter only if you remain employed by
VeriChip (Canada) and VeriChip Holdings as of the last day of such quarter.



Annual Incentive Compensation for Achieving Revenue and EBITDA Objectives



This component of your annual incentive compensation of C$200,000 is based upon the achievement of
(i) the annual budgeted revenues from Canadian operations of US$32,004,000 and (ii) a minimum
EBITDA from Canadian operations of US$4,800,000. If both of these objectives are not achieved, no
annual incentive compensation shall be paid with respect to this component.



The determination of whether this annual incentive compensation component has been earned shall be
based on the Company’s audited financial statements for the year ending December 31, 2007 as filed
with the Commission and, to the extent earned as provided above, will be paid as soon as
practicable, but in no event later than 5 business days, after such financial statements have been
so filed with the Commission. You will be entitled to this annual incentive compensation component
only if you remain employed by VeriChip (Canada) and VeriChip Holdings as of the last day of
December 31, 2007. The maximum amount that you can earn during 2007 from this component of the
annual incentive compensation is C$200,000.



Annual Incentive Compensation for Exceeding Revenue and EBITDA Objectives



This component of your annual incentive compensation of C$100,000 is based upon exceeding both the
annual budgeted revenues and budgeted EBITDA from Canadian operations by 5%. Accordingly, this
component of your annual incentive compensation is based upon the achievement of (i) annual
revenues from Canadian operations of US$33,604,200 (US$32,004,000 * 1.05) and (ii) a minimum EBITDA
from Canadian operations of US$5,040,000 (US$4,800,000 * 1.05). If both of these objectives are
not achieved, no annual incentive compensation shall be paid with respect to this component.



The determination of whether this annual incentive compensation component has been


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earned shall be based on the Company’s audited financial statements for the year ending December
31, 2007 as filed with the Commission and, to the extent earned as provided above, will be paid as
soon as practicable, but in no event later than 5 business days, after such financial statements
have been so filed with the Commission. You will be entitled to this annual incentive compensation
component only if you remain employed by VeriChip (Canada) and VeriChip Holdings as of the last day
of December 31, 2007. The maximum amount that you can earn during 2007 from this component of the
annual incentive compensation is C$100,000.



Sincerely,




/s/ Scott R. Silverman




Scott R. Silverman

Chief Executive Officer



Accepted and agreed to as of the date first above written




/s/ Daniel A. Gunther                              

Daniel A. Gunther





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