Filed by Bowne Pure Compliance



 




Exhibit 10.3




Digital Angel Corporation

January 15, 2008




Randolph K. Geissler

15665 Medina Road

Plymouth, MN 55447




RE: Employment Letter Agreement



Dear Randy:



This letter agreement confirms our discussions regarding your becoming the Chief Executive Officer
of the Animal Applications Division of Digital Angel Corporation. (the “Company”), and sets
out the terms and conditions of your employment with the Company, as follows:



	 	 	 
	Title:

	 	You will serve as the Company’s
President of the Company’s Animal
Applications Division; provided,
that you be allowed to use the title
of Chief Executive Officer (“CEO”),
Animal Applications both internally
and externally whether orally or in
writing.
	 
	 	 
	Effective Date:

	 	January 15, 2008
	 
	 	 
	Term:

	 	The term of your employment and this
letter agreement is 18 months from
the Effective Date, unless earlier
terminated by either party as
provided in this letter agreement
(the actual term of this letter
agreement and your employment, the
"Term”). Your employment and this
letter agreement will automatically
terminate at the end of the Term
unless extended in writing by you
and the Company.
	 
	 	 
	Responsibilities:

	 	During your employment with the
Company as President of the Animal
Applications Division, you will
report to the Company’s President.
You agree to work substantially full
time for the Company. You may, to a
reasonable extent, participate in
charitable activities, personal
investment activities and outside
businesses that are not competitive
with Digital Angel and/or its
subsidiaries (such as, for example
and not by way of limitation,
Receptors, LLC and your involvement
with such company) and serve on
boards of directors or similar
positions with other companies, so
long as such activities and
directorships do not unreasonably
interfere with the performance of
your duties and responsibilities to
the Company.
	 
	 	 
	Base Salary:

	 	You will be paid a base salary at
the rate of at least $275,000 per
year for services performed, in
accordance with the regular payroll
practices of the Company, which base
salary may be increased from time to
time by the Company.






 


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	Incentive Bonus:

	 	You will be eligible for an
annualized incentive award
opportunity payable up to a maximum
of 30% of your base salary based on
performance metrics, goals and bonus
amounts set forth in writing by the
President of the Company and you.
	 
	 	 
	Benefits:

	 	During your employment with the
Company, you will be eligible to
participate in the employee benefit
plans and programs generally
available to other executive
officers of the Company, and in such
other employee benefit plans and
programs to the extent that you meet
the eligibility requirements for
each individual plan or program and
subject to the provisions, rules and
regulations applicable to each such
plan or program as in effect from
time to time.
	 
	 	 
	Vacation:

	 	During your employment with the
Company, you will receive vacation
time off in accordance with the
policies and practices of the
Company, except that your annual
accrual rate shall be not less than
three weeks paid vacation off per
year.
	 
	 	 
	Office Location:

	 	Your employment will be based at the
Company’s offices in South St. Paul,
Minnesota, and you will not be
required to re-locate from such
location. Of course, in your
position reasonable travel will be
required in the course of performing
your responsibilities.
	 
	 	 
	Termination:

	 	Either you or the Company may
terminate the employment
relationship at any time and for any
reason, provided that you agree to
give at least six months notice of
termination if termination is other
than for (i) Good Reason or (ii) due
to your disability or (iii) due to
expiration of the Term. Upon
termination of your employment by
either party for any reason, you
will promptly resign any and all
positions you then hold as officer
or director of the Company or any of
its affiliates, and you will be
promptly paid all accrued but unpaid
compensation and other amounts owed
to you. “Good Reason” means any one
or more of the following occur
without your consent: (i) a material
breach by the Company of any
obligations owed to you which is not
cured within 30 days after written
notice, (ii) your demotion or the
assignment to you of material duties
inconsistent with your status or
position as President of the Animal
Application Division, or your no
longer having the title of President
of the Animal Application Division;
or (iii) the relocation of your
principal office for Company
business to a location more than
forty (40) miles from the Company’s
current South St. Paul location.






 


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	Noncompetition:

	 	In consideration of your and the
Company entering into this letter
agreement, and other good and
valuable consideration, the receipt
and sufficiency of which is hereby
acknowledged, and to protect the
reasonable business interests of the
Company, you agree during the Term
and for the Non-Compete Period, you
will not directly or indirectly,
whether on your own behalf or that
of a third party (other than the
Company or its affiliates), engage
in the business (whether as an owner
of, or as employee, director or
officer of or consultant to any
business, other than the Company,
that is engaged in the business), of
owning or operating any business
that sells products or services that
directly compete with the products
and services under development or
offered by the Animal Applications
Division during the Term in any
state or country in which the
Company or its subsidiaries sells
any such products or services during
the Term. For purposes of this
section, Animal Applications
Division shall have the meaning
given to such term in the Agreement
and Plan of Merger dated January 14,
2008 among the Company, you and the
other parties named therein (“Merger
Agreement”). For clarity, the
foregoing noncompetition restriction
will not apply to any products or
services offered for sale by the
Animal Applications Division after
the Term unless: (1) they were
offered for sale by the Animal
Applications Division as of the
Effective Date; (2) they were in
development prior to the Term or at
any time during the Term; or (3)
they were offered for sale within 30
months from the Effective Date and
are related to nonhuman animal
identification, nonhuman animal
imaging, or hospital asset
tracking. Further, in no event will
the foregoing noncompetition
restriction apply to Receptors, LLC
or your involvement with such
company. “Non-Compete Term” means a
period of 30 months after
termination of this letter agreement
(but not earlier than September 30,
2011); provided, that, in the event
of a Change in Control of the Animal
Applications Division or of the
Company, such 30 month period will
be reduced to 18 months. Further,
if the Company does not pay any
amounts to you when due, and such
failure continues for 30 days after
written notice, the Non-Compete Term
will terminate. “Change of Control”
shall have the meaning given to such
term in the Merger Agreement. You
agree that the Company will be
entitled to equitable relief without
the requirement of posting a bond to
enforce the terms of such
noncompetition restriction, in
addition to any other rights or
remedies that the Company may have.
In the event that any provision of
this noncompetition clause (or any
other provision contained in this
letter agreement) shall be
determined by any court of competent
jurisdiction to be unenforceable,
such provision shall be interpreted
to extend only over the maximum
period of time for which it may be
enforceable and/or over the maximum
geographical area as to which it may
be enforceable and/or to the maximum
extent in all other respects as to
which it may be enforceable, all as
determined by such court in such
action so as to be enforceable to
the extent consistent with then
applicable law.






 


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	Non-Solicitation of Other Employees
and Agents:

	 	For the period of non-competition
outlined in this letter agreement,
Employee will not encourage,
solicit, induce, or attempt to
encourage, solicit or induce any
other employee of the Company to
leave his/her employment with the
Company. In addition and for the
same period, Employee will not hire
any person who is an employee of the
Company at such time or who has been
an employee of the Company at any
time within six months preceding
such time.
	 
	 	 
	Business Activities with former
Shareholders of GTC

	 	The noncompetition and
nonsolicitation provisions set forth
above shall not restrict you from
engaging in business activities with
the former shareholders of Geissler
Technology Corporation; provided
however, that such activities shall
not be in competition with the
Company in violation of the above
and such activities shall not
negatively impact your performance
of the duties to the Company.
	 
	 	 
	First Offer on Animal Application 

Products or Technology:

	 	You agree that for a period of 18
months after the Non-Compete Term
(or, if earlier, 12 months after a
Change of Control of the Animal
Applications Division or the
Company), you will provide the
Company with the right to make a
first offer on any Animal
Application Products or Technology
you develop. “Animal Application
Products or Technology” means
products or technology whose primary
and intended use or application is
for or by non-human animals,
provided, however, that a product or
technology that has both human and
non-human animal applications or
uses will not be deemed to be an
Animal Application Product or
Technology. To meet your
requirements under this clause, if
applicable, you agree to provide a
reasonable summary or overview of
the Animal Application Products or
Technology you develop during such
period to the Company, subject to
the Company executing any reasonable
non-disclosure agreement reasonably
required by you in connection
therewith, prior to your licensing
the same to any third party or you
or your affiliates commercially
selling the same. Once disclosed,
the Company, if it elects to do so,
may offer you any terms that it
wishes to propose, but nothing shall
require you or the Company to enter
into any discussions or negotiations
regarding any proposed terms, or to
enter into any agreement or
arrangement in connection therewith,
and you are free to pursue any and
all alternatives you may elect
unless and until you and the Company
enter into a definitive written
agreement in form and content
mutually acceptable to you and the
Company to the contrary with respect
to a particular Animal Applications
Product or Technology. Once you
have so disclosed an Animal
Application Product or Technology,
you need not disclose further
developments of or improvements to
such Animal Application Product or
Technology. If the Company does not
pay any amounts owed to you when
due, and such failure continues for
30 days after written notice, your
obligations under this clause will
terminate.
	 
	 	 
	Indemnification:

	 	The Company at all times will
indemnify you, and will reimburse or
advance you expenses, to the fullest
extent permitted by applicable law
in connection with your duties and
responsibilities for the Company or
its affiliates, and not less than
any indemnity and advance rights the
Company or its affiliates provides
to any other officer, director or
employee of the Company or its
affiliates.






 


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	Applicable Law:

	 	This letter agreement shall be
interpreted and construed in
accordance with the laws of the
State of Minnesota.
	 
	 	 
	Attorneys Fees:

	 	If any party to this Agreement
initiates any arbitration, legal
action or lawsuit against any other
party relating to this Agreement,
the prevailing party in such action
or amount shall be entitled to
receive reimbursement from the other
party for all reasonable attorneys’
fees, expert fees and other costs
and expenses incurred by the
prevailing party in respect of such
proceeding.
	 
	 	 
	Entire Agreement:

	 	This letter agreement and the
documents referenced herein
constitute the entire agreement
between the parties regarding the
subject matter, and supersedes all
prior discussions, agreements and
negotiations between us. No
amendment or modification of this
letter agreement will be effective
unless made in writing and signed by
you and the Company.
	 
	 	 
	Counterparts and Facsimile:

	 	This letter agreement may be
executed in any number of
counterparts and by facsimile, each
one of which shall be an original
and all of which shall constitute
one and the same document.






Sincerely,




DIGITAL ANGEL CORPORATION.



	 	 	 	 	 
	By: 

Its:

	 	/s/ Lorraine M. Breece
 

VP, ACFO
 

	 	  






I accept and agree to the terms and conditions of employment with Digital Angel Corporation as set
forth above.



	 	 	 
	/s/ Randolph K. Geissler
 

Randolph K. Geissler

	 	 







 


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