Document:

2006 Tax Allocation Agreement dated as of December 21, 2006

 Exhibit 10.51 
 2006 TAX ALLOCATION AGREEMENT 
 THIS 2006 TAX ALLOCATION AGREEMENT (“Agreement”)
is entered into effective as of the Deconsolidation Date among Applied Digital Solutions Inc., a Missouri corporation with its principal place of business at Delray Beach, Florida (“Applied Digital”), VeriChip Corporation, a Delaware
corporation also with its principal place of business at Delray Beach, Florida (“VeriChip”) and each other corporation that is a member of the Consolidated Group as defined below. Applied Digital and VeriChip are hereinafter collectively
referred to as the “Parties” and singularly as a “Party”. 
 RECITALS 
 WHEREAS, VeriChip is considering selling a certain number of its newly-issued shares of common stock so that Applied Digital’s
ownership interest in VeriChip would be less than 80 percent thereby precluding VeriChip from being included in the consolidated federal income tax returns prepared by Applied Digital as common parent for the taxable periods following the
Deconsolidation Date; 
 WHEREAS, VeriChip has, with the consent of Applied Digital, represented in various public statements
that the Deconsolidation will not have a material adverse effect on its financial condition or results of operations; and 
 NOW, THEREFORE, the Parties to this Agreement agree as follows: 
 ARTICLE I 
 DEFINITIONS 
 1.1 DEFINITIONS: As used in this Agreement, the following
terms have the following meanings: 
 “Code” means the Internal Revenue Code of 1986, as amended, or corresponding
provisions of any subsequent federal tax laws. 
 “Consolidated Group” means the “affiliated group” of
corporations of which Applied Digital is the “common parent corporation”, as such terms are defined in Code §1504(a)(1). 
 “Consolidated Minimum Tax Credit(s)” means the consolidated minimum tax credit(s) computed in accordance with Code §§53, 1502, and 1503, and shown in a Consolidated Return with respect to those tax
periods up to and including the Deconsolidation Date. 
  

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 “Consolidated Return” means the consolidated federal income tax return of the
Consolidated Group for each taxable year as filed or to be filed by Applied Digital on behalf of the Consolidated Group. 
 “Consolidated Tax Liability” means, generally, the consolidated federal income tax liability computed in accordance with Treasury Regulation §1.1502-2 and shown on a Consolidated Return, taking into account all credits to
which the Consolidated Group is entitled under the Code, but not taking into account any “consolidated alternative minimum tax liability” (as provided under Code §§55, 1502, and 1503) or any Consolidated Minimum Tax Credit.

 “Deconsolidation” means that event which causes Applied Digital to no longer have the requisite ownership
interest in VeriChip so as to allow VeriChip to file as part of a Consolidated Group with Applied Digital. 
 “Deconsolidation Date” means February 14, 2007, the date when Applied Digital and VeriChip no longer are members of the same Consolidated Group. 
 “Other Tax” or “Other Taxes” means any and all taxes of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect
thereto) imposed by any governmental authority or taxing authority, including, but not limited to, federal, state, local, or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall
profits, environmental (including taxes under Code §59A), customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer,
registration, value added, alternative or add-on minimum, estimated, or other tax of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not and including any obligations to indemnify or otherwise assume or
succeed to the tax liability of any other Person, other than any such item included in the definition of Tax. 
 “Party” and “Parties” have that meaning ascribed to them in the Recitals. 
 “Pre-Deconsolidation Date Period” means, chronologically, those tax years that end prior to the tax year in which the Deconsolidation Date occurs plus that period in time beginning on the first day of such year and ending on and
including the Deconsolidation Date. 
 “Post-Deconsolidation Date Period” means, chronologically, that period
following the Deconsolidation Date. 
  

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 “Subsidiary” means any corporation or other entity with respect to which
Applied Digital, on the one hand, or VeriChip, on the other, owns, directly or indirectly, at least 50% of the common stock or other equity or profits interests or has the power, directly or indirectly, to elect a majority of the members of the
board of directors or comparable governing body. 
 “Taxes” or “Tax” means federal income taxes as
provided in Code §11, alternative minimum tax as provided in Code §55, and any state taxes measured by net income (including state taxes measured by net income reflected in any Unitary Tax Returns filed by Applied Digital) and any interest
or penalties thereon or additions to tax. The term Taxes or Tax, however, specifically excludes any tax imposed by any foreign government. 
 “Unitary Tax Return” means a state income tax return which reflects the combined and/or consolidated reporting (either on a domestic or worldwide basis) of Applied Digital and its affiliates for a state
which either (i) imposes an income tax on the apportioned and/or allocable share of the net income of Applied Digital and its United States affiliates that are engaged in a “unitary business”, part of which is conducted in the state
or (ii) imposes an income tax on the apportioned and/or allocable share of the net income of a taxpayer and its affiliates—both domestic and foreign—that are engaged in a unitary business. 
 Other terms defined herein have the meanings given them. 
 ARTICLE II 
 TAX INDEMNIFICATION 
 2.1 VERICHIP’S TAX INDEMNIFICATION FOR THE PRE-DECONSOLIDATION DATE PERIOD: VeriChip shall be liable for, indemnify, and hold Applied Digital harmless for all Taxes (i) imposed on or
incurred by VeriChip for the Pre-Deconsolidation Date Period and (ii) equitably apportioned to VeriChip by Applied Digital for all tax periods beginning before and ending after the Deconsolidation Date. Except as provided in
Section 2.2(c), VeriChip, in turn, shall be entitled to receive all refunds of Taxes attributable to the Pre-Deconsolidation Date Period, if any, that are imposed or incurred by VeriChip or equitably apportioned to VeriChip from either the
applicable tax authorities or Applied Digital (in the event such refund(s) have been made directly to Applied Digital). 
 2.2 VERICHIP’S 2006 TAX LIABILITY AND PAYMENT 
 (a) VeriChip’s liability for Taxes for the portion of the
Pre-Deconsolidation Date Period attributable to the tax year in which the Deconsolidation Date occurs shall be based on Applied Digital’s preparation of the Consolidated Return for such taxable year and 

  

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VeriChip’s review thereof. Any discrepancies between Applied Digital’s return position and VeriChip’s subsequent review shall be resolved by
consultation by each Party’s respective tax officers and Applied Digital’s ultimate determination shall be controlling as long as such determination does not have a material adverse effect on VeriChip’s financial condition or results
of operations. 
 (b) The Parties agree that, in determining VeriChip’s allocable share of the (i) Unitary and
(ii) Consolidated Tax Liabilities for the tax year in which the Deconsolidation Date occurs, they shall follow a reasonable method agreed to by both Parties. 
 (c) VeriChip shall pay Applied Digital its allocable share of the estimated Unitary and Consolidated Tax Liabilities for that portion of the tax year in which the Deconsolidation Date occurs that
precedes the Deconsolidation Date within 45 days from the Deconsolidation Date. A “true-up” payment, should one be necessary, shall be made by VeriChip to Applied Digital or Applied Digital to VeriChip within 15 days after Applied
Digital’s subsequent determination of VeriChip’s liability based on taxable income and tax credits reported as part of Applied Digital’s Unitary and Consolidated Returns and VeriChip’s separate state Tax returns for the taxable
year in which the Deconsolidation Date occurs. If there is a refund of Taxes attributable to VeriChip for that portion of the tax year in which the Deconsolidation Date occurs that precedes the Deconsolidation Date, VeriChip shall retain such
refund, or, if such refund is received by Applied Digital, Applied Digital shall pay the amount of such refund to VeriChip within 45 days of its receipt of such refund. 
 (d) Applied Digital shall be liable for, indemnify, and hold VeriChip harmless for all Taxes attributable to the event of Deconsolidation, including all taxes with respect to any deferred
intercompany transactions within the meaning of Treasury Regulation § 1.1502-13. 
 (e) In connection with any
Pre-Deconsolidation Date Period, neither Party to the Agreement will be required to compensate the other Party for any net operating losses incurred by that other Party that reduce the consolidated tax liability of the Consolidated Group or the
taxable income of other members of the Consolidated Group. The same results shall apply for any Pre-Deconsolidation Date Period net operating losses that reduce the consolidated tax liability of the Consolidated Group or the taxable income of the
other members of the Consolidated Group in connection with the use of such net operating loss as a result of an audit by the Internal Revenue Service, or by any state or local tax authority. 
 2.3 OTHER TAXES. VeriChip shall be liable for, indemnify, and hold Applied Digital harmless for all Other Taxes imposed on 

  

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or incurred by VeriChip or any of its Subsidiaries and Applied Digital shall be liable for, indemnify, and hold VeriChip harmless for all Other Taxes imposed
on or incurred by Applied Digital or any of its Subsidiaries (other than VeriChip, itself, or its Subsidiaries), whether arising before or after the Deconsolidation Date. 
 ARTICLE III 
 MINIMUM TAX CREDIT 
 AND RELATED MATTERS ASSOCIATED WITH DECONSOLIDATION 
 3.1 CONSOLIDATED MINIMUM TAX CREDIT

 (a) As currently calculated by Applied Digital, no Consolidated Minimum Tax Credits have been allocated to VeriChip by
Applied Digital based on Consolidated Returns filed through tax year ended December 31, 2005 under the methodology followed for the Pre-Deconsolidation Date Period and Applied Digital has not made any determination of VeriChip’s allocable
share of Consolidated Minimum Tax Credits for the 2006 tax year. In the event Consolidated Minimum Tax Credits are allocated to VeriChip, VeriChip shall be obligated to reimburse Applied Digital for the amount of such credits allocated to VeriChip
upon the occurrence of the earlier of the following two events: 
 (i) The date of VeriChip’s filing of its federal
income tax return for the tax year in the Post-Deconsolidation Date Period when VeriChip utilizes any reallocated Consolidated Minimum Tax Credits; or 
 (ii) The date of Applied Digital’s filing of its federal income tax return for the tax year in the Post-Deconsolidation Date Period when Applied Digital could have utilized such Consolidated Minimum Tax Credits
but is precluded from doing so because of the reallocation to VeriChip. 
 (b) For purposes of Section 3.1(a)(ii), no
Consolidated Minimum Tax Credits will be considered usable by Applied Digital until Applied Digital could have first utilized all Consolidated Minimum Tax Credits remaining with Applied Digital after the reallocation. Any minimum tax credits
generated by Applied Digital in the Post-Deconsolidation Date Period shall be disregarded in making this determination. For purposes of Section 3.1(a)(i), Consolidated Minimum Tax Credits will be considered as utilized by VeriChip before
VeriChip first utilizes any minimum tax credits it has generated in the Post-Deconsolidation Date Period. 
 (c) For purposes
of Section 3.1(a), any payments to be made between VeriChip and Applied Digital may be made for more than one tax year of the Post-Deconsolidation Date Period until the reallocated Consolidated Minimum Tax Credit is used (or could have been
used) in its entirety. 
  

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 3.2 CONSOLIDATED MINIMUM TAX CREDIT ALLOCATION ADJUSTMENTS: In the event the amount of
the Consolidated Minimum Tax Credits allocated to VeriChip are adjusted resulting in a reduction of Consolidated Minimum Tax Credits previously utilized by VeriChip and a payment has been made by VeriChip to Applied Digital pursuant to the terms of
Section 3.1, Applied Digital shall be obligated to pay VeriChip for any assessment made against it by the Internal Revenue Service attributable to such adjustment. Payment shall be made by Applied Digital to VeriChip on the day VeriChip pays
the Internal Revenue Service for such assessment. 
 ARTICLE IV 
 AUDITS AND OTHER TAX PROCEEDINGS 
 4.1 GENERAL COOPERATION AND EXCHANGE OF INFORMATION

 (a) VeriChip shall provide, or cause to be provided, to Applied Digital copies of all correspondence received from any
taxing authority by VeriChip in connection with the liability of the Parties for Taxes for the Pre-Deconsolidation Date Period. VeriChip shall also provide Applied Digital with access to or copies of any materials requested by Applied Digital which
would assist Applied Digital in resolving any tax matters for the Consolidated Group for the Pre-Deconsolidation Date Period. Further, the Parties will provide each other with such cooperation and information as may reasonably be requested of each
other in preparing or filing any return, amended return, or claim for refund, in determining liability or right of refund, or in conducting any audit or other proceeding, in respect of Taxes or Other Taxes imposed on the Parties or their respective
affiliates including, by way of example, information relating to net operating losses, foreign tax credits, overall foreign losses, and excess loss accounts. 
 (b) VeriChip on one hand, and Applied Digital and each other member of the Consolidated Group on the other hand, and their respective affiliates, will preserve and retain all returns, schedules,
workpapers, and all material records or other documents relating to any such returns, claims, audits, or other proceedings until the expiration of the statutory period of limitations (including extensions) of the taxable periods to which such
documents relate and until the final determination of any payments which may be required with respect to such periods under this Agreement and shall make such documents available at the then-current corporate headquarters of such Party to the other
Party or any affiliate thereof, and their respective officers, employees, and agents, upon reasonable notice and at reasonable times, it being understood that such representative shall be entitled to make copies of any such books and records
relating to Applied Digital or VeriChip as they shall deem necessary. 
  

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 (c) Applied Digital on one hand and VeriChip on the other hand further agree to permit
representatives of the other Party or any affiliate thereof to meet with employees of such Party on a mutually convenient basis in order to enable such representatives to obtain additional information and explanations of any documents provided
pursuant to this Section 4.1. Applied Digital on one hand and VeriChip on the other hand shall make available to the representatives of the other Party or any affiliate thereof sufficient workspace and facilities to perform the activities
described in this Section. Any information obtained pursuant to this Section 4.1 shall be kept confidential, except as may be otherwise necessary in connection with the filing of returns or claims for refund or in conducting any audit or other
proceeding. Each Party shall provide the cooperation and information required by this Section 4.1 at its own expense. 
 4.2 AUDITS: In the event of an audit by the Internal Revenue Service, or by any state or local tax authority, of a return filed by Applied Digital for the Pre-Deconsolidation Date Period, Applied Digital shall give VeriChip timely and
reasonable notice of audit proceedings and VeriChip will provide all necessary information and other assistance reasonably requested by Applied Digital with respect to issues concerning the activities of VeriChip. All communications with the
Internal Revenue Service concerning such audit will be made by Applied Digital unless otherwise agreed between the Parties hereto. 
 4.3 MATERIAL ADVERSE IMPACT TO VERICHIP: Notwithstanding the provisions of Section 4.2, the Parties agree that in no event shall Applied Digital file any amended tax return, claim for refund, or make any tax election affecting the
Pre-Deconsolidation Date Period that would have any material adverse impact on VeriChip’s financial condition or results of operations without first obtaining the written permission of VeriChip. 
 ARTICLE V 
 UNITARY TAX RETURNS 
 FOR POST-DECONSOLIDATION DATE PERIOD FILINGS 
 Applied Digital agrees to continue to file any Unitary Tax Returns and allocate Unitary tax liability for the Post-Deconsolidation Date Period in which the operations of VeriChip are reflected in a manner consistent
with the methodology followed for the Pre-Deconsolidation Date Period. 
 ARTICLE VI 
 OTHER PROVISIONS 
 6.1 EFFECT OF THE AGREEMENT: The obligations of the
Parties set forth under this Agreement shall be unconditional and absolute, and shall remain in effect without limitation as to time. Further, all prior tax sharing and allocation agreements between Applied Digital and VeriChip, if any, shall
terminate effective as of the Deconsolidation Date. 
 6.2 ASSIGNABILITY: The rights and obligations of the Parties under
this Agreement may not be assigned by a Party without the prior written consent of the other Party to this Agreement. 
 6.3
GOVERNING LAW: This Agreement shall be governed by the laws of the state of Florida. 
  

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 IN WITNESS WHEREOF, the Parties hereto have caused their names to be subscribed and executed by the
respective authorized officers on the dates indicated, effective as of the date first written above. 
  

			
	APPLIED DIGITAL SOLUTIONS, INC.
		
	 By:
	 	 /s/ Michael E. Krawitz

	 Name:
	 	 Michael E. Krawitz

	 Title:
	 	 Chief Executive Officer and President

  

			
	VERICHIP CORPORATION
		
	 By:
	 	 /s/ William J. Caragol

	 Name:
	 	 William J. Caragol

	 Title:
	 	 Chief Financial Officer, Vice President and Treasurer

  

			
	ACT Communications Inc.
		
	 By:
	 	 /s/ Kay E. Langsford

	 Name:
	 	 Kay E. Langsford

	 Title:
	 	 Vice Pres., Sec’y

  

			
	ADS Bay Area, Inc.
		
	 By:
	 	 /s/ Kay E. Langsford

	 Name:
	 	 Kay E. Langsford

	 Title:
	 	 Vice Pres., Sec’y

  

 8 

			
	ADSI Telecomm Services, Inc.
		
	By:	 	 /s/ Kay E. Langsford

	Name:	 	Kay E. Langsford
	Title:	 	Vice Pres., Sec’y

  

			
	Advanced Telecomm of Maryland, Inc.
		
	By:	 	 /s/ Kay E. Langsford

	Name:	 	Kay E. Langsford
	Title:	 	Vice Pres., Sec’y

  

			
	Advanced Telecomm of Pittsburgh
		
	By:	 	 /s/ Kay E. Langsford

	Name:	 	Kay E. Langsford
	Title:	 	Vice Pres., Sec’y

  

			
	Applied Digital Solutions Financial Corp.
		
	By:	 	 /s/ Kay E. Langsford

	Name:	 	Kay E. Langsford
	Title:	 	Vice Pres., Sec’y

  

 9 

			
	Arjang, Inc.
		
	By:	 	 /s/ Kay E. Langsford

	Name:	 	Kay E. Langsford
	Title:	 	Vice Pres., Sec’y

  

			
	Blue Star Electronics, Inc.
		
	By:	 	 /s/ Kay E. Langsford

	Name:	 	Kay E. Langsford
	Title:	 	Vice Pres., Sec’y

  

			
	Bostek, Inc.
		
	By:	 	 /s/ Kay E. Langsford

	Name:	 	Kay E. Langsford
	Title:	 	Vice Pres., Sec’y

  

			
	Computer Equity Corporation
		
	By:	 	 /s/ Kay E. Langsford

	Name:	 	Kay E. Langsford
	Title:	 	Vice Pres., Sec’y

  

			
	CyberTech Station, Inc.
		
	By:	 	 /s/ Kay E. Langsford

	Name:	 	Kay E. Langsford
	Title:	 	Vice Pres., Sec’y

  

 10 

			
	Elite Computer Services, Inc.
		
	By:	 	 /s/ Kay E. Langsford

	Name:	 	Kay E. Langsford
	Title:	 	Vice Pres., Sec’y

  

			
	Government Telecommunications, Inc.
		
	By:	 	 /s/ Kay E. Langsford

	Name:	 	Kay E. Langsford
	Title:	 	Vice Pres., Sec’y

  

			
	Intellesale, Inc.
		
	By:	 	 /s/ Kay E. Langsford

	Name:	 	Kay E. Langsford
	Title:	 	Vice Pres., Sec’y

  

			
	Micro Components International Incorporated
		
	By:	 	 /s/ Kay E. Langsford

	Name:	 	Kay E. Langsford
	Title:	 	Vice Pres., Sec’y

  

			
	Neirbod Corp.
		
	By:	 	 /s/ Kay E. Langsford

	Name:	 	Kay E. Langsford
	Title:	 	Vice Pres., Sec’y

  

 11 

			
	Pacific Decision Sciences Corporation
		
	By:	 	 /s/ Kay E. Langsford

	Name:	 	Kay E. Langsford
	Title:	 	Vice Pres., Sec’y

  

			
	Perimeter Acquisition Corp.
		
	By:	 	 /s/ Kay E. Langsford

	Name:	 	Kay E. Langsford
	Title:	 	Vice Pres., Sec’y

  

			
	Precision Point Corporation
		
	By:	 	 /s/ Kay E. Langsford

	Name:	 	Kay E. Langsford
	Title:	 	Vice Pres., Sec’y

  

			
	Thermo Life Energy Corp.
		
	By:	 	 /s/ Kay E. Langsford

	Name:	 	Kay E. Langsford
	Title:	 	Vice Pres., Sec’y

  

 12 

			
	U.S. Kite & Key Corp.
		
	By:	 	 /s/ Kay E. Langsford

	Name:	 	Kay E. Langsford
	Title:	 	Vice Pres., Sec’y

  

			
	WYR, Inc.
		
	By:	 	 /s/ Kay E. Langsford

	Name:	 	Kay E. Langsford
	Title:	 	Vice Pres., Sec’y

  

 13VeriChip Corporation Executive Management Incentive Plan dated April 2, 2007

 Exhibit 10.56 
 2007 VeriChip Corporation Executive Management Incentive Plan 
  

			
	To:	  	Executive Management
	From:	  	Compensation Committee of the Board of Directors
	Date:	  	April 2, 2007

 Re: 2007 VeriChip Corporation Executive Management Incentive Plan 
 This Executive Management Incentive Plan (the “Plan”) is designed to recognize and reward the contributions of management that result in the achievement of
goals and objectives that, in the judgment of the Compensation Committee of the Board of Directors of VeriChip Corporation (the “Company”), are important to the short-term and long-term success of the Company. 
 The eleven factors that will be considered in determining executive management bonuses are (in no order of importance and in no order of likelihood of success):

  

	 	1.	Consolidated revenue for 2007 

  

	 	2.	Implantable division revenue for 2007 

  

	 	3.	2007 year end common stock price per share 

  

	 	4.	Cash balance as of December 31, 2007 

  

	 	5.	Strategic partnerships and distribution agreements 

  

	 	6.	Strategic acquisition 

  

	 	7.	EBITDA of Canadian operations 

  

	 	8.	Infrastructure build out targets for VeriMed business 

  

	 	9.	Analyst coverage for common stock 

  

	 	10.	SOX and financial audit 

  

	 	11.	Discretionary by Compensation Committee of the Board 

 The Compensation
Committee recognizes that there may be situations where the long-term best interest of the Company and its stockholders 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 the Compensation Committee that the executive management team take the initiative to come to the Compensation 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 stockholders without regard to personal short term gain. 
 If the Compensation Committee determines
that, as a result of a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which the Company conducts its business, or any other events or circumstances, the performance factors are no longer
suitable, the Compensation Committee may in its discretion and to the extent it deems appropriate modify, change or eliminate such performance factors or the related minimum acceptable level of achievement, in whole or in part, as the Compensation
Committee deems appropriate and equitable. In addition, the Compensation Committee shall have the authority to make equitable adjustments to the performance factors, or the method of calculating attainment of the performance factors, in recognition
of unusual or non-recurring events affecting the Company or any subsidiary or the financial statements of the Company or any subsidiary in response to or in recognition of changes in applicable laws or regulations, or to account for items of gain,
loss, deduction or expense determined to be extraordinary, nonrecurring or unusual in nature or infrequent in occurrence, including, by way of example only, asset write-downs and litigation or claim judgments or settlements, or related to the
disposal of a segment of a business or related to a change in accounting principles. 

 Summary of Calculation of Bonus 
 Each executive earns points for meeting or exceeding the goals as set forth in the table below. The points assigned reflect the seniority of the executive as well as the anticipated involvement of that executive in
achieving the goal. 
 Executive Management: Scott Silverman, William Caragol and Michael Feder 
  

							
	 	  	Silverman	  	Caragol	  	Feder
	 Consolidated revenue of $32.0 million for 2007
	  	3	  	2	  	0.5
	 Consolidated revenue of $33.6 million for 2007
	  	1	  	1	  	1
	 Consolidated revenue of $35.2 million for 2007
	  	1	  	1	  	1
	 Implantable revenue of $250 thousand for 2007
	  	1	  	0.5	  	0.5
	 Implantable revenue of $500 thousand for 2007
	  	1	  	0.5	  	0.5
	 Implantable revenue of $750 thousand for 2007
	  	1	  	0.5	  	0.5
	 Implantable revenue of $1.0 million for 2007
	  	1	  	0.5	  	0.5
	 Implantable revenue of $2.5 million for 2007
	  		  		  	1
	 December 31, 2007 common stock price in excess of IPO price
	  	2	  	0.67	  	
	 December 31, 2007 common stock price 25% in excess of IPO price
	  	1	  	0.33	  	
	 Total cash at December 31, 2007 of $8.5 million
	  	1	  	1	  	
	 Strategic partnership and distribution agreements (other than Henry Schein)
	  	1	  	0.5	  	1
	 Strategic acquisition
	  	1	  	0.5	  	
	 EBITDA of Canadian operations of $4.8 million
	  	2	  	1	  	
	 SOX 404 and audit opinion without material deficiencies
	  	1	  	1	  	
	 VeriMed hospitals in network of 800 at December 31, 2007 and protocol adopted hospitals of 200 at December 31, 2007
	  	1	  	0.5	  	2
	 Analyst coverage by three equity research analysts
	  	2	  	1	  	
	 Discretionary by the Compensation Committee
	  	Up to 10 pts.	  	Up to 5 pts.	  	Up to 2 pts.
	 TOTAL POINT POTENTIAL
	  	31 pts.	  	17.5 pts.	  	10.5 pts.

 All amounts above are in U.S. dollars. 
 Point Value - 
 U.S.$50,000 for each point 
 Notes: 
  

	 	1.	No executive can earn more than 100% of points listed for that item. 

  

	 	2.	Revenue based points are incremental at each new level. For example, for Mr. Silverman’s point accumulation – at $34 million of consolidated revenue 4 points are
earned (3 points for $32 million, plus 1 point for reaching $33.6 million) 

  

	 	3.	EBITDA is determined after giving effect to Canadian management bonuses, but before the impact of any bonus to the CEO of VeriChip Corporation, a Canadian corporation.

  

	 	4.	The year end stock price shall be calculated based on the average of the ending price on the last twenty trading days of the year. 

 Pursuant to this Plan, any bonus shall be deemed earned on December 31, 2007, and the Company shall makes its best effort to pay such bonus within sixty days of
year end.

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