2006 Incentive Compensation Plan for Kevin McLaughlin dated April 20, 2006.



 Exhibit 10.29 
 

 
 Memorandum 
  

					
	To:	  	Kevin McLaughlin	  	April 20, 2006
			
	From:	  	Scott Silverman	  	
			
	Re:	  	Senior Management Incentive Compensation Plan	  	

 In addition to your base salary of US$200,000, we are pleased to offer you the following incentive compensation
for the fiscal year ended December 31, 2006. 
 Your target incentive compensation is US$250,000 (plus a special Implanted Revenue incentive of an
additional US$100,000 as listed below) and is based upon the achievement of specific objectives. These targets and the related incentive compensation are divided into three components – quarterly, annual and Implanted Revenue. The quarterly
incentive compensation (up to US$125,000) rewards the achievement of budgeted revenues. The annual incentive compensation (up to US$125,000) rewards the achievement of specific objectives; and provides an incentive for exceeding budgeted revenues.
The Implanted Revenue incentive bonus (US$100,000) rewards you for the achievement specifically of Implanted Division revenue. 
 Quarterly Incentive
Compensation 
 Your quarterly incentive compensation is calculated based upon the achievement of year-to-date revenue from all of VeriChip Corporation
relative to the December 9, 2005 budget. 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, subject to available cash or stock, 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 $34,852,000) * (Target Incentive Compensation) * (% of Target Incentive Compensation)
= Actual Quarterly Incentive Compensation 
 Specifically for the first quarter of 2006 your actual quarterly incentive compensation is: 
 US$6,441,000 / US$34,852,000 * US$250,000 * 50% = US$23,101 
 If year-to-date revenue to the end of any fiscal quarter does not exceed 95% of the year-to-date annual revenue budget no additional incentive compensation shall be paid. Payments of quarterly incentive compensation in the 2nd, 3rd and 4th quarters will be 








 
reduced by the actual amount paid in previous quarters. The maximum amount that you can earn during 2006 from this quarterly incentive compensation is
US$125,000 
 Annual Incentive Compensation 
 Your annual
incentive compensation shall be calculated at the end of each fiscal year; is earned in the year to which it relates; and shall be paid within 60 calendar days of the end of the year. 
 a) Achievement of Specific Objectives 
 This portion
of the annual incentive compensation pays a specific amount for the achievement of each specific objective. Partial payments will be considered in extraordinary circumstances. 
  

							
	 Specific Objectives of Annual Incentive
	  	% of Target
Incentive
Compensation	 	 	Specific
Compensation
Amount
	 Achievement of budgeted Canadian revenue of US$28,360,000
	  	10	%	 	US$	25,000
	 Achievement of legacy operations (the former companies – eXI and Instantel) budgeted EBITDA of US$4,182,000
	  	10	%	 	US$	25,000
	 Completion of VeriChip Initial Public Offering with proceeds in excess of US$25M (Gross)
	  	10	%	 	US$	25,000
	 40 Hospitals with VeriMed Operational Protocol
	  	10	%	 	US$	25,000
	 200 Hospitals signed by 12/31/2006
	  	5	%	 	US$	12,500
	 VeriMed Database operational and co-located in 2006
	  	5	%	 	US$	12,500
	 Sub-Total of Annual Incentive Compensation
	  	50	%	 	US$	125,000
	 Implantable Revenue in excess of US$4,000,000
	  			 	US$	50,000
	 Implantable Revenue in excess of US$6,000,000
	  			 	US$	50,000
	 Total
	  			 	US$	225,000

 b) Exceeding Budgeted Revenues 
 This portion of the annual incentive compensation is calculated based upon exceeding annual revenue from legacy operations (the former companies – eXI and
Instantel) relative to the December 9, 2005 budget 
 The following is the formula for this portion of your annual incentive compensation: 

[(Actual Annual Revenue) / (Annual Revenue Budget of US$28,360,000) – 1] * (Target Incentive Compensation) * (multiplier of 2) = Actual Annual Incentive
Compensation 
 Assuming that revenues are exceeded by 10% the following would be the calculation for this portion of your Actual Annual Incentive
Compensation: 
 [US$31,196,000 / US$28,360,000 – 1] * C$250,000 * 2 = US$50,000 







 If Actual Annual Revenue does not exceed the Annual Revenue Budget no incentive compensation shall be paid. There is no
maximum for this portion of the annual incentive compensation. 
 I look forward to working with you to achieve these performance targets.