**Exhibit10.19**

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**EMPLOYMENTCONTRACT**
| ***deCODE Genetics ehf.****(Íslensk erfðagreining ehf.), State Registration No. 691295-3549, of  Sturlugata 8, Reykjavík (the “Company” or the “Employer”)* |
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| for the first part and Jakob Sigurdsson Id. No.  280364-2589                                                                                                                                   |
| for the second part, enter into the following  Employment Contract:                                                                                                                            |

 

**1. Field of work**

The Employee is hired to work in the capacityof Senior Vice President, Corporate Development of the Employer and of deCODEgenetics, Inc., the parent company of the Employer (the “Parent”) and from timeto time will serve in such other positions as the Chief Executive Officer ofthe Employer (the “**CEO**”) or theBoard of Directors of the Parent (the “**Board**”)may from time to time determine. The Employee will have such powers and duties(including holding officer positions with one or more Subsidiaries of theParent) as may be assigned from time to time by the CEO or the Board and as aregenerally associated with the position of Senior Vice President, CorporateDevelopment and such other positions. The Employee will workunder the supervision of the CEO and the Board. **“Subsidiary”** means any entity 50%or more owned, directly or indirectly, by the Parent.

The workplace is theEmployer’s base of operations at Sturlugata 8, Reykjavík. If the Employer’sbase of operations in Reykjavík changes, or the number of bases within thegreater Reykjavík area is increased, the Employee agrees to change hisworkplace.

The Employer reserves the right to change the tasks ofthe Employee and administrative arrangements if such changes are necessary inthe opinion of the Employer and the Employee consents, provided, however, thatsuch changes do not negatively affect the Employee’s compensation and level ofresponsibility.

**2. Term of employment**

The Employee shall beginwork for the Employer on October 23, 2006.

The mutual notice period for termination ascontemplated by Act No. 19/1979 on the Right of Workers to Notice ofTermination of Employment and to Wages During Absences Caused by Illness orAccident shall be six (6) months for the Employee and twelve (12) months forthe Employer.

**3. Duties**

The Employee pledges toperform his work faithfully and conscientiously. The Employee undertakes toobserve all instructions given by supervisors regarding his work. Furthermore,the Employee undertakes to observe any rules set by the Company or the Parent andpublished in the Employees’ Handbook or in any other

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**Confidential**

manner. The Employershall make available and the Employee shall acquaint himself with any suchrules and notices that the Company or the Parent may issue.

The Employee shall not engage in work for othercompanies without the permission of the CEO during the term of this Employment Contract.This applies equally to paid work and unpaid work as well as to service on theboard of directors of other companies. The Employee may serve on the board of anon-governmental, non-profit organisation, provided that such activities arecompatible with the work of the Employee under his work contract.

On termination of hisemployment, the Employee shall return all documents and identification papersof any kind in his possession and belonging to the Employer. This applies toall documents and computer data, originals and copies.

**4. Working Hours**

The Employee is appointedto a full-term position which is a position of responsibility andmanagement.  Working hours are determinedby what is necessary to perform the work in an efficient and effective manner,irrespective of whether this requires work outside regular working hours ornot.

**5. WageTerms**

The fixed annual salary of the Employee is USD 365,000, payable inIcelandic kronas at the exchange rate in effect on the last day of the monthbefore the month in which payment is made. In addition the Employee shall eligible to receive an annual bonus of upto 50% of his annual salary, as the Board or the Compensation Committee of theBoard may specify in its sole discretion based upon performance targets orotherwise, subject to any terms or conditions as may be established by theBoard or its Compensation Committee.

Payment for any work carried out outside regular working hours and forwork-related projects of any kind is included in the above annual salary.

Wages are paid on the first working day of each month for the previousmonth.

TheEmployee shall pay 4% of his total wages as a contribution to a pension fund ofhis choice and the Employer shall contribute 6% of the same amount.

Should the Employeeutilize his right to supplementary pension savings, the Employer will pay inaddition to the Employee’s total wages 2% to the supplementary fund, providedthat the Employee pays at least 2%.

In addition, the Employerwill pay 5% on top of the Employee’s total wages to either a regular pensionfund, or a supplementary fund, at the Employee’s choosing.

The Company shall providethe Employee with an automobile for occupational and private use in accordancewith Company policy applicable from time to time. The leasing expense for theautomobile is to be agreed upon between the Employee and

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the Chief Executive Officerof the Company (the “CEO”).  Before theCompany has entered into a lease for such an automobile, or at the time ofexpiration of the term of such a lease, the Employee may elect to receive, inlieu of an automobile, an automobile allowance in an amount agreed upon betweenthe Employee and the CEO.  The Companywill pay reasonable operating expenses (including gas and insurance) approvedin advance by the CEO for any automobile provided by the Company.  The parties acknowledge that this benefit issubject to taxation under Icelandic law.

The above wages constitute full remuneration for thework performed by the Employee, and hence no payments are required under this EmploymentContract for vacation or December bonuses.

The salary and other wage-related terms shall bereviewed annually, taking into account external circumstances and theperformance of the Employee in his work, but shall not be reduced as a resultof such review.

The Company will pay the reasonable and customarydocumented expenses****of therelocation of the Employee and his family from the Employee’s current home inGermany to Iceland

**6. Vacation**

6.1.

The Employer makes no separate vacation payments tothe Employee, as the Employee shall enjoy a full salary during the time of his vacation.

The Employee shall be entitled to such number of weeksof vacation as may from time to time be awarded in accordance with the Employer’spolicies for executives based in Iceland.

In other respects, vacation rights shall be subject toAct No. 30/1987 on Vacations.

6.2.

Rights of employees tomaternity/paternity leave and parental leave shall be subject to Act No.95/2000, on Maternity/Paternity Leave and Parental Leave.

**7. Occupational Accidents andDiseases**

The Employer is liablefor any injuries suffered by the Employee in his work, subject to general rulesof law on torts regarding employer liability.

In the event of theEmployee suffering an accident at work, the Employer shall pay for the transportof the Employee to his home or to hospital and reimburse him for all reasonableout-of-pocket medical expenses, for up to 4 weeks in each case, other thanexpenses paid by the district health insurance or social security.

In each instance of anaccident at work or work-related illness caused during work or as a result ofwork, or occurring during trips to and from the place of work, the Employershall pay the Employee full wages for up to three months in accordance

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with the terms ofemployment in effect at the time of the Employee’s accident or illness,provided that the per diem paid in respect of the Employee for these days bythe State Social Security Institute and/or insurance companies is paid to theEmployer.

**8. Accidents and illness**

Wage payments toemployees during absences caused by illness or accident in the first year ofemployment shall correspond to two days for each month of work. When theEmployee has worked for the Employer for one year or more, wage payments duringabsences caused by illness shall be as follows: After 1 year, 2 months of every12 months, after 5 years’ employment 4 months of every 12 months and after 10years of employment 6 months of every 12 months.

If the Employee is illand cannot attend work for that reason, he shall immediately notify the Companyand the CEO, who shall then decide whether a medical testimonial is required.In the event of a medical testimonial being required, the Employee shallprovide a testimonial from a physician approved by the Employer regarding theillness or accident and confirming that he was unable to work. The Employershall reimburse the Employee for the out-of-pocket expenses of obtaining arequested testimonial, provided that the above conditions are met.

After the first month atwork the Employee shall, without any curtailment of wages, be entitled to spenda total of 10 working days of every 12 month period in ministering to his sick familymembers, provided that other care is unavailable.

**9. Insurance**

9.1.

The Employer shall insureall his employees against death and chronic or temporary disability caused byan accident at work or while travelling a normal route from the home to theworkplace and from the workplace to the home.

In the event that theEmployee, because of his work, has accommodations away from his home, theaccommodations shall replace the home and the insurance shall then also covernormal trips between the home and the said accommodations.

The insurance shall enter into force as soon as theEmployee begins work and shall expire as soon as the Employee stops working forthe Employer.

The policy terms of the insurance shall be the generalpolicy terms in force for work-related accident insurance for wage earners asestablished by the Association of Icelandic Insurance Companies at the time ofsignature of this Contract.

In the event of the Employer becoming liable fordamages to the Employee, accident compensation and per diem paid to theEmployee under the provisions of this Employment Contract shall be fullydeductible from any damages that the Employer may otherwise be required to pay.While the payment of wages continues, per diem payments shall be paid to theEmployer.

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9.2.

Further provisions on employee insurance, e.g. termsand compensation amounts, are set out in the Employee’s Handbook as current atany time. Employees are expected to acquaint themselves with such information.

**10.  StockOption Grants**

On the first day of theEmployee’s employment, the Parent shall grant him two non-qualified stockoptions, pursuant to the Parent’s 2002 Equity Incentive Plan, to purchase250,000 and 50,000 shares, respectively, of Common Stock of the Parent (“CommonStock”) with an exercise price equal to the closing price of the Parent’sCommon Stock on the last trading day prior to the first day of the Employee’semployment as reported on the Nasdaq Global Market.  Such options shall be in the form of, and onsuch terms and conditions as provided in, the Parent’s standard form of StockOption Grant Agreement in effect as of the date on which the options aregranted and shall include such furtherterms as are described in this Employment Contract. The Stock OptionGrant Agreement for the option for 250,000 shares of Common Stock shallprovide, on condition that the Employee is employed hereunder on the relevantvesting dates, that such option shall vest as to 62,500 shares on the firstanniversary of the Employee’s commencement of employment hereunder and as to1/48 of the shares on the last day of each month thereafter.   Such Stock Option Grant Agreement shall also provide that such option shallbecome 100% vested immediately upon a Change in Control (as defined in Section11 below) and upon a termination of the Employee’s employment hereunder otherthan for Cause (as defined in the Parent’s 2002 Equity Incentive Plan). The Stock Option Grant Agreement forthe option for 50,000 shares of Common Stock shall provide that such optionshall vest on the full execution of a definitive Material CollaborationAgreement which is executed primarily as the result of the Employee’s efforts,as determined in good faith by the CEO.  “MaterialCollaboration Agreement” shall mean (i) any research collaboration or similaragreement with a third party pursuant to which the Parent or the Companyreceives or is entitled to receive research funding and/or scientific ordevelopment milestone payments or (ii) any licensing, distribution or similaragreement pursuant to which the Parent or the Company receives or is entitledto receive royalties or other consideration for the grant of licensing,distribution, marketing or similar rights, which agreement is material to theParent as determined in good faith by the CEO.

**11. Termination of Employment following a Change in Control.**

If following the occurrence of a Changein Control of the Parent (as defined below), (i) (A) the Employee ceases toserve in a senior executive position with the Company, (B) his compensation(including the material benefits of his employment) is decreased, or (C) hisduties are inconsistent with those customarily performed by a company’s seniorexecutive officer, other than as a result of his voluntary action, and (ii)within sixty (60) days of such Change in Control, the Employee terminates hisemployment by giving the Company 10 days’ notice, then the Company will payhim, in addition to any compensation earned prior to the date of terminationand in addition to any compensation related to the notice period under Section2, a lump sum

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cash payment in an amount equal totwelve (12)  times  his monthly salary at the time of histermination plus one and one-half (1-1/2) times the average annual bonus paidto him during the preceding two (2) years. Such payment will be made within thirty (30) days of termination.  A Change in Control of the Parent shall bedeemed to occur if (i) the Parent is merged with or into or consolidated withanother corporation or other entity under circumstances where the stockholdersof the Parent immediately prior to such merger or consolidation do not ownafter such merger or consolidation shares representing at least fifty percent(50%) of the voting power of the Parent or the surviving or resultingcorporation or other entity, as the case may be, or (ii) if the Parent isliquidated or sells or otherwise disposes of substantially all of its assets toanother corporation or entity, or (iii) if any person (as such term is used inSections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) shallbecome the beneficial owner (within the meaning of Rule 13d-3 under such Act)of forty (40%) percent or more of the Common Stock of the Parent, in all casesother than pursuant to a plan or arrangement entered into by such person andthe Parent or otherwise approved by the Board.

**12.  Confidentiality, Invention****Assignment and Non-CompeteAgreement.**

Infurther consideration of this Employment Contract, contemporaneously with theexecution of this Employment Contract the Employee shall execute theConfidentiality, Invention Assignment and Non-Compete Agreement attached heretoas Exhibit A (“Noncompetition Agreement”). Any material breach by the Employee of the Noncompetition Agreementafter his employment has terminated shall, in addition to all remedies providedtherein, entitle the Company and the Parent to terminate any further paymentobligations they may have to him under this Employment Contract.

The Employee agrees andacknowledges that the Noncompetition Agreement constitutes a prerequisite forand an integral part of this Employment Contract.  The Employee’s compensation as laid out inthis Employment Contract does contain a fair remuneration, as understood bylaws on employees inventions # 72 from 2004, for any inventions made by, orparticipated in by, Employee, while employed by Employer, as long as saidinvention is a part of his job, or related to a job/project that he is assignedto by Employer.

**13.  Breach of the Employee’s ContractualObligations**

In the event of a breach by the Employee of theprovisions of any provisions hereof (including without limitation Article 3) orof the Noncompetition Agreement, such a breach shall be regarded as asubstantial default on the part of the Employee of the Employment Contract andthe Employer may then terminate this Contract without prior notice and withoutpaying a salary to the Employee during the notice period.

All earlier employment contracts and any othercontracts between the Employer and the Employee regarding wages and terms ofemployment shall be superseded by this Employment Contract on its entry intoforce.

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| Reykjavik,         |         | 25 October, 2006                                                        |   |   |
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| ***Employee***                                             | *** *** | ***    For  Íslensk erfðagreining ehf.*** |   |   |
| *** ***                                               | *** *** | *** ***                                                            |   |   |
|   /s/  Jakob Sigurdsson                          |         | ***    ***/s/  Kari Stefansson                      |   |   |

 

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