Exhibit
10.74







**Incentive
and Recognition Policy**
 
 To:  Executive
Management
 From:  Compensation
Committee
 Date:  March 7,
2005
 
 Re: 2005
Incentive and Recognition Policy
 
 The
Compensation Committee recognizes the significantly improved condition of the
Company achieved by this management team over the past 12 months, both in terms
of financial health and in terms of prospects for the future. While genuinely
appreciated, there remains much more to be achieved. This policy is designed to
strongly motivate senior management to achieve goals that, in the judgment of
the Compensation Committee, are important to the long-term success of the
Company. The intent is to motivate the executive team reach for the best
performance and result for the Company and its shareholders.
 
 The six
factors that will be considered in determining management bonuses are (in no
order of importance and in no order of likelihood of success):
 
 1.
    Earnings
      per share for the year
 2.
    EBITDA
      for the year (i.e. earnings per share before interest, taxes, depreciation
      and amortization)
 3.
    NASDAQ
      national market listing
 4.
    Improved
      value in or transaction regarding the Company’s investment in Digital
      Angel
 5.
    Valuable
      VeriChip transaction or VeriChip license
 6.
    Revenue
      from VeriChip
 
 The
compensation committee recognizes that there may be situations where the long
term best interest of the company and its shareholders may be in conflict with
the short term achievement of a goal set out in this plan. In those rare
situations, it is the clear intention of this committee that the executive team
takes the initiative to come to the committee for consideration. It is clear
that the primary responsibility of all the executives of the company is to
perform their obligations and duties to the company and its shareholders without
regard to personal short term gain. Moreover, recognizing that accounting
charges occasionally do not reflect operational achievements (such as non-cash
charges), such amounts would generally be excluded from calculation (as
determined by the compensation committee at the time any bonuses would be
calculated).
 
  2           March 7,
2005
  **Summary
of Calculation of Bonus**
 
 Each
executive officer earns points for meeting or exceeding the goals as set forth
in the table below. The points assigned reflect the seniority of the officer as
well as the anticipated involvement of that officer in effecting the
goal.
 
 Executive
Management: Scott Silverman, Kevin McLaughlin Michael Krawitz, Evan
McKeown
 
 Silverman
    McLaughlin
    Krawitz
    McKeownPositive
      EPS (for the year)
    5
    2
    1
    3Positive
      EBITDA (for the year)
    5
    1.5
    1
    2Nasdaq
      national market listing
    5
    0.5
    3
    1DA
      transaction: EITHER a transaction that yields [omitted for
      confidentiality] to Applied Digital OR maintain/improve
      stock
      price;
    5
    1
    4
    3(A)
      VeriChip transaction [omitted for confidentiality] OR (B) 50% of points
      for major license [omitted for confidentiality]
    5
    2
    4
    2VeriChip
      Corp. revenue (including eXI): 20% of points for each $2.5MM above $7.5MM
      (i.e. bonus would start at $10MM)
    5
    5
    1
    130
    12
    14
    12Point
      Value$50,000Notes:No
      officer can earn more than 100% of points listed for that
    item**EPS
      and EBITDA are determined after giving effect to any bonuses (i.e. EPS
      will only be considered**
      **positive
      if, after payment of any bonuses or expected payment of bonuses, EPS is
      positive).****Kevin
      McLaughlin's plan may be modified in whole or in part at discretion of
      comp committee if**
      **he
      becomes full-time CEO of VeriChip**DA
      Value is determined by the Compensation Committee based on the ten trading
      days preceding
      the
      date hereof and the ten trading days preceding the date the bonus is
      determined, with any
      adjustments
      the compensation committee reasonably deems
appropriate.
 
  2
 
 3           March 7,
2005
  Senior
Management: Lorraine Breece
 
 BreeceNational
      Market listing
    3404
      - No material weakness
    4Implement
      404 procedures
    4Timely
      SEC filings
    4Improve
      quality of filings
    2Acquisitions:
      100%
      if any acquisitions (excl. eXI)
    1DA
      transaction:
      EITHER
      a
      transaction that yields [omitted for confidentiality] to Applied
      Digital
      OR
      maintain/improve
      stock price;
    1VeriChip
      transaction
    423Point
      Value$3,000NOTES:Bonus
      may be increased or decreased by 20% for other factors, as determined by
      executive managementBonus
      may be increased or decreased by 20% for overall financial
      performanceNo
      officer can earn more than 100% of points listed for that
    item
 
 To the
extent of any ambiguity or need for interpretation, the Compensation Committee
shall have authority, in its sole discretion, to make final determinations. This
incentive plan does not create a contract of employment or otherwise bind the
Company to employ the named officer. If the officer is terminated for cause or
resigns (without good cause) prior to the payment of any bonus, then no portion
of the bonus shall be payable without the consent of the Compensation Committee
which it may exercise in its sole discretion. If the named executive is
terminated not for cause (or terminates employment with good reason), the
Compensation Committee will make a pro rata adjustment based on the percentage
of the goal achieved before the departure.
   3