EX-10.1 Amendment to Letter Agreement



 





EXHIBIT
10.1




VeriChip Corporation

1690 South Congress Avenue, Suite 200

Delray Beach, Florida 33445




March 2, 2007




Daniel A. Gunther

263 Clemow Avenue

Ottawa, Ontario, Canada K1S 2B5




Re:      Amendment to Letter Agreement dated August 11, 2005




Dear Dan,




On behalf of VeriChip Corporation (the “Company”), I am pleased to make the following mutually
agreed changes to that certain letter agreement that you entered into with the Company on August
11, 2005 (the “Original Agreement” and the Original Agreement, as amended hereby, the “Letter
Agreement”). These changes will be made effective immediately upon your execution of this
amendment or as otherwise specified herein.



Role




You will be appointed as the President and Chief Executive Officer of the Company’s two
wholly-owned subsidiaries, VeriChip Corporation, a Canadian corporation (“VeriChip Canada”), and
VeriChip Holdings, Inc., a Canadian corporation, and resign the title and responsibilities of
President of the Company.



In these roles, you will be fully responsible for all aspects of these two corporations and charged
with their growth and future success. Specifically, you will have responsibility for:




	 	•	 	Organic growth and profitability;
	 
	 	•	 	Growth through complementary acquisitions that will be integrated with the
Canadian operations;
	 
	 	•	 	Direct responsibility for financial reporting for these two subsidiaries that meets
or exceeds the financial reporting standards of the Company and Applied Digital
Solutions, Inc; and
	 
	 	•	 	Supporting the Company in a number of activities such as investor relations and
public relations.





Specifically,
you will not have responsibility for:




	 	•	 	The Delray Beach, Florida operations or the activities of the implantable product
line.




 









 











Notwithstanding the foregoing, you shall continue to be considered an “executive officer” of the
Company within the meaning of Rule 3b-7 promulgated under the United States Securities Exchange Act
of 1934, as amended (the “Exchange Act”) and will continue to be subject to the requirements of
Section 16 of the Exchange Act.



Compensation



Your base salary will be increased to an annual rate equal to C$250,000 (less applicable taxes and
withholding). In addition to this annual base salary, you will also be eligible for an annual
incentive with a target compensation of C$500,000 that will be calculated based upon the
achievement and/or exceeding of corporate and personal objectives pursuant to annual senior
management incentive compensation plans to be approved annually by the Compensation Committee of
the Board of Directors of the Company. Both this base salary and your annual incentive
compensation plan will be reviewed on an annual basis by the Compensation Committee of the Board of
Directors of the Company. Your 2007 senior management compensation plan was approved by the
Compensation Committee of the Company’s Board of Directors on March 2, 2007 and has been provided
to you.



Termination by VeriChip Canada or VeriChip Holdings, Inc.



In the case of termination by VeriChip Canada or VeriChip Holdings, Inc. for any reason other than
for Cause (as defined below), including any material breach of this Letter Agreement, you shall be
entitled to a termination payment determined as hereinafter provided in lieu of notice. Such
termination payment shall be equal to two (2) multiplied by the sum of (a) your then current base
salary and (b) your average aggregate incentive compensation for the then previous three fiscal
years of the Company (or in the event your termination occurs in 2007, the average of your
aggregate incentive compensation with respect to each of 2005 and 2006). This payment shall be
made within 30 days of the date of termination. In the event of your resignation or termination for
cause, you will not be entitled to any compensation. For purposes herein, “Cause” shall mean a
conviction of a felony by you or your being prevented from providing services hereunder as a result
of your violation of any law, regulation and/or rule.



Change in Control of the Company



In the case of a Change in Control of the Company as defined in the March 2, 2007 Executive
Management Change in Control Plan approved by the Board of Directors of the Company (the “Plan”),
you shall be entitled to the Change in Control Compensation described in the Plan.



Restricted Stock



On March 2, 2007, the Company’s Board of Directors granted you 50,000 restricted shares of common
stock of the Company under the Company’s 2002 Flexible Stock Plan. These shares vest two years
from the date hereof and are otherwise subject to the terms


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and conditions set forth in the restricted stock award agreement provided to you on the date
hereof.



The Original Agreement shall remain in full force and effect except as specifically amended herein.



Sincerely,



/s/ Scott R. Silverman

Scott R. Silverman

Chairman and Chief Executive Officer




Accepted and agreed with appreciation to as of

the date first above written:




Daniel A. Gunther                              

Daniel A. Gunther





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