Document:

Exhibit 10.76

Exhibit
10.76

EMPLOYMENT
AGREEMENT

 

THIS
AGREEMENT (“Agreement”), made and entered into as of February 28, 2005, by
and between DIGITAL ANGEL CORPORATION, a Delaware corporation (“Company”) and
LASSE NORDFJELD (“Executive”).

 

RECITALS

 

A.           
This
Agreement is being executed and delivered contemporaneously with that certain
Stock Purchase Agreement dated as of the date hereof (the “Stock Purchase
Agreement”), pursuant to which the Company will purchase all of the issued and
outstanding shares of capital stock of DSD Holding A/S, a Danish corporation
(the “DSD Holding”).

 

B.           
The
Executive is a founder of and the principal operating officer of DSD Holding.
DSD Holding has developed and acquired valuable information, know-how and ideas
relating to its business, all of which is regarded as valuable confidential
information. In the course of his employment with DSD Holding, Executive has had
access to and has learned certain valuable and confidential information of DSD
Holding. During such period, Executive has also developed valuable relationships
with suppliers, customers and other business associates of DSD
Holding.

 

C.           
The
Company desires to assure that Executive provides services to the Company as its
employee, and Executive desires to be employed by the Company, subject to the
terms and conditions set forth in this Agreement.

 

NOW,
THEREFORE, in consideration of the foregoing premises and the respective
agreements of the Company and Executive set forth below, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Executive, intending to be legally bound, agree as
follows:

 

1.            
Employment. 
The Company hereby employs Executive, and Executive accepts such employment and
agrees to perform services for the Company, for the period and upon the other
terms and conditions set forth in this Agreement.  The Executive shall
serve in the employ of the Company as President of the Animal Applications
Group, and shall serve in any other capacity in the employ of the Company and
its subsidiaries to which the Executive may from time to time be elected or
appointed.

 

2.            
Term
of Employment. 
Unless terminated at an earlier date in accordance with Section 9 of this
Agreement, the term of Executive’s employment hereunder shall be for an initial
period of one year, commencing upon the date hereof.  Thereafter, the term
of Executive’s employment under this Agreement shall automatically be renewed
for successive additional one year terms, each of which terms shall be added at
the end of the then existing term, unless either

 

1

 

party
notifies the other at least 90 days prior to the expiration of the then existing
term.  Such notice, if given by either party and not withdrawn prior to the
expiration of the then existing term, shall be deemed a termination of
Executive’s employment under this Agreement.

 

3.            
Position
and Duties.

 

 (a)          
Service
with Company. 
During the term of Executive’s employment with the Company, Executive agrees to
perform such reasonable employment duties as the Chief Executive and/or the
Board of Directors of the Company shall assign to him from time to time. 
Executive shall be an executive officer of the Company, Executive’s title shall
be President, Animal Applications Group, and he shall assume and discharge the
responsibilities of such offices as set forth in the Company’s Bylaws or as
otherwise determined by the Company’s Chief Executive Officer and/or Board of
Directors.

 

 (b)          
Performance
of Duties; Performance Review. 
Executive agrees to serve the Company faithfully and to the best of his ability
and to devote his full time, attention and efforts to the business and affairs
of the Company during his employment by the Company.  Executive further
agrees that he shall not engage, either directly or indirectly, in any business
or other activity which is competitive with or adverse to the interest or the
business of the Company. The ownership by Executive, as a passive investment, of
less than 3% of the outstanding shares of capital stock of any corporation
listed on a national securities exchange or publicly traded in the
over-the-counter market shall not constitute a breach of this Section 3.
Executive hereby confirms that he is under no contractual commitments
inconsistent with his obligations set forth in this Agreement.  While he
remains employed by the Company, Executive may participate in other business
activities, including, without limitation, reasonable charitable activities,
personal investment activities and, if the Executive received prior approval
from the Chief Executive Officer of the Company, serving on the board of an
entity which is not competitive with or adverse to the interest or business of
the Company, so long as such activities do not interfere with the performance of
his obligations under this Agreement.

 

4.            
Compensation.

 

 (a)          
Base
Salary. 
The Company agrees to pay the Executive for his services hereunder a base salary
(the “Base Salary”), which Base Salary shall be paid in accordance with the
Company’s normal payroll procedures and policies.  Effective on the date of
this Agreement, the Company shall pay to the Executive a Base Salary of
1,200,000 Danish Krones per annum. Executive acknowledges that the Company will
withhold and deduct from such payments such amounts as are required under
applicable law to be withheld for income tax, Social Security and other
withholding purposes.

 

 (b)          
Performance
Bonus. As
additional compensation for Executive, Executive will be eligible to receive an
annual bonus up to 50% of Executive’s Base Salary for each fiscal year (the
“Bonus”), based upon criteria determined by mutual agreement of the Board of
Directors, the

 

2

 

Compensation
Committee of the Board and the Executive. The Bonus shall be paid annually not
later than 45 days after the completion of the Company’s fiscal year-end audit.
The Bonus shall be pro-rated for any year during which Executive is employed for
less than the full year.

 

 (c)          
Stock
Options. As
additional compensation for Executive, Executive will receive stock options to
purchase 150,000 shares of the Company’s common stock as approved by the Board
of Directors of the Company or compensation committee of the Board.

 

 (d)          
Benefits. 
During the term of Executive’s employment with the Company, Executive shall be
entitled to continue to participate in any of the employee benefit and deferred
compensation plans or programs of DSD Holding as was available to Executive
prior to the closing of the Stock Purchase Agreement.

 

 (e)          
Other
Perquisites. 
The Executive shall be entitled to the same vacation, car allowance, office
facilities and such other facilities and services DSD Holding provided to the
Executive prior to the closing of the Stock Purchase Agreement.  In
addition, the Company will pay or reimburse Executive for all reasonable and
necessary out-of-pocket expenses incurred by him in the performance of his
duties under this Agreement, subject to the Company’s normal policies for
expense verification. Without his consent, Executive shall not be relocated from
Denmark.

 

5.            
Confidential
Information. 
Except as permitted by the Company’s Board of Directors, Executive shall not
divulge, furnish or make accessible to anyone or use in any way (other than in
the ordinary course of the business of the Company) any confidential or secret
knowledge or information of the Company or DSD Holding that Executive previously
acquired or will acquire during the period of his employment by the Company,
whether developed by himself or by others, concerning any (i) trade
secrets, (ii) confidential or secret designs, processes, formulae, plans,
devices or material (whether or not patented or patentable) directly or
indirectly useful in any aspect of the business of the Company or DSD Holding,
(iii) customer or supplier lists of the Company or DSD Holding,
(iv) confidential or secret development or research work of the Company or
DSD Holding, or (v) other confidential information or secret aspects of the
business of the Company or DSD Holding.  Executive acknowledges that the
above-described knowledge or information constitutes a unique and valuable asset
of the Company and represents a substantial investment of time and expense by
the Company, and that any disclosure or other use of such knowledge or
information other than for the sole benefit of the Company would be wrongful and
would cause irreparable harm to the Company.  During the term of this
Agreement, Executive will refrain from any acts or omissions that would reduce
the value of such knowledge or information to the Company.  The foregoing
obligations of confidentiality shall not apply to any knowledge or information
that (x) is now or subsequently becomes generally publicly known in the
form in which it was obtained from the Company or DSD Holding, (y) is
independently made available to Executive in good faith by a third party who has
not violated a confidential relationship with the Company or DSD Holding, or
(z) is required to be disclosed by legal process, other than as a direct or
indirect result of the breach of this Agreement by Executive.

 

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6.            
Ventures. 
If, during Executive’s employment, Executive is engaged in or associated with
the planning or implementing of any project, program or venture involving the
Company and a third party or parties, all rights in such project, program or
venture shall belong to the Company.  Except as approved by the Company’s
Board of Directors, Executive shall not be entitled to any interest in such
project, program or venture or to any commission, finder’s fee or other
compensation in connection therewith other than the compensation to be paid to
Executive as provided in this Agreement.  Executive shall have no interest,
direct or indirect, in any vendor or customer of the Company, unless such
interest has been disclosed to and approved by the Company’s Board of
Directors.  Notwithstanding the foregoing, however, ownership by Executive,
as a passive investment, of less than 3% of the outstanding shares of capital
stock of any corporation listed on a national securities exchange or publicly
traded in the over-the counter market shall not constitute a breach of this
Section 6.

 

7.            
Noncompetition
Covenant.

 

 (a)          
Agreement
Not to Compete. 
During the term of Executive’s employment by the Company and for a period of 12
consecutive months from the date of termination of such employment (whether such
termination is occasioned by Executive or the Company) or, if employment is
terminated pursuant to Sections 9(a)(ii), 9(a)(iii), 9(a)(v) or the Executive
provides notice to the Company that he will not renew the term of employment
pursuant to Section 2, for a period of 12 consecutive months from the date of
termination of such employment or until the date the balance of the Purchase
Price or Buyout Purchase Price is paid under the Stock Purchase Agreement,
whichever is latest, Executive shall not, directly or indirectly, in any place
in Denmark or North America, engage in the business that the Company or DSD
Holding has engaged in at the time of the termination of Executive’s employment
or any part of such business, including the design, development, manufacture,
distribution, marketing, leasing or selling of animal identification systems, in
any manner or capacity, including, but not limited to, as a proprietor,
principal, agent, partner, officer, director, stockholder, employee, member of
any association, consultant or otherwise.

 

 (b)          
Agreement
Not to Hire. 
During the term of Executive’s employment by the Company and for a period of 12
consecutive months from the date of termination of such employment, Executive
shall not, directly or indirectly, hire, engage or solicit any person who is an
employee of the Company or DSD Holding.

 

 (c)          
Limitation
on Covenant. 
The ownership by Executive, as a passive investment, of less than 3% of the
outstanding shares of capital stock of any corporation listed on a national
securities exchange or publicly traded in the over-the-counter market shall not
constitute a breach of this Section 7.

 

 (d)          
Acknowledgment. 
Executive agrees that the restrictions and agreements contained in this
Section 7 are reasonable and necessary to protect the legitimate interests
of the Company and that any violation of this Section 7 will cause
substantial and irreparable harm to the

 

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Company
that would not be quantifiable and for which no adequate remedy would exist at
law and accordingly injunctive relief shall be available for any violation of
this Section 7.

 

 (e)          
Blue
Pencil Doctrine. 
If the duration or geographical extent of, or business activities covered by,
this Section 7 are in excess of what is valid and enforceable under
applicable law, then such provision shall be construed to cover only that
duration, geographical extent or activities that are valid and
enforceable.  Executive acknowledges the uncertainty of the law in this
respect and expressly stipulates that this Agreement be given the construction
which renders its provisions valid and enforceable to the maximum extent (not
exceeding its express terms) possible under applicable laws.

 

8.            
Work
Product; Assignment of Inventions.

 

 (a)          
Work
Product. 
Executive agrees that, during the term of this employment with the
Company:

 

 
(i)           
He will
disclose promptly and fully to the Company all works of authorship, inventions,
discoveries, improvements, designs, processes, software or any improvements,
enhancements or documentation of or to the same that he makes, works on or
conceives, individually or jointly with others, in the course of his employment
by the Company or with the use of the Company’s time, materials or facilities,
in any way related or pertaining to or connected with the present or anticipated
business, development, work or research of the Company or which result from or
are suggested by any work he may do for the Company and whether produced during
normal business hours or on personal time (collectively the “Work
Product”);

 

 
(ii)          
All Work
Product of the Executive shall be deemed to be “work made for hire” within the
meaning of 101 of the Copyright Act and all rights to copyright shall be vested
Section
entirely in the Company. If for any reason the Work Product is deemed not to be
“work made for hire” and its rights to copyright are thereby in doubt, this
Agreement shall constitute an irrevocable assignment by the Executive to the
Company of all right, title and interest in the copyright of all Work Product
created under this Agreement. The parties intend that any and all copyright and
other intellectual property rights in the Work Product, including without
limitation any and all rights of whatever kind and nature now or hereafter to
distribute and reproduce such Work Product in any and all media throughout the
world, are the sole property of the Company.  The Executive hereby agrees
to assist the Company in any manner as shall be reasonably requested by the
Company to protect the Company’s interest in such legal instruments or documents
as the Company shall request in order for the Company to register the Company’s
worldwide copyright and/or the Work Product with the U.S. Copyright Office and
to register and protect the Company’s copyright or other intellectual property
rights in the Work Product throughout the world.  Likewise, the Executive
hereby agrees to assist the Company by executing such other documents
and

 

5

 

instruments
which the Company deems necessary to enable it to evidence, perfect and protect
its rights, title and interest in and to the Work Product.

 

 
(iii)         
Executive
shall make and maintain adequate and current written records and evidence of all
Work Product, including drawings, work papers, graphs, computer records and any
other document which shall be and remain the property of the Company, and which
shall be surrendered to the Company upon request and upon the termination of the
Executive’s employment with the Company, regardless of cause.

 

 (b)          
Assignment
of Inventions. 
Executive agrees that, during the term of this engagement with Company,
Executive may make, develop or conceive of inventions, original works of
authorship, developments, concepts, improvements or trade secrets, whether or
not patentable or registrable under copyright or similar laws, which Executive
may solely or jointly conceive or develop to reduce to practice, or cause to be
conceived of developed or reduced to practice in connection with the Company’s
business, products or research and development or the services provided by the
Executive hereunder (collectively referred to as “Inventions”).  The term
“Inventions” further includes any useful process, composition of matter,
software, machine, process, discovery, document or improvement which relates to
the business activities which Company is or may become engaged.  Executive
agrees that it will promptly make full written disclosure to the Company, will
hold in trust for the sole and exclusive right and benefit of the Company and
its nominees and hereby assigns to the Company, or its designee, in perpetuity,
all of Executive’s right, title and interest in and to any and all Inventions,
including background information necessary to practice such
Inventions.

 

 
(i)           
Patent
and Copyright Registrations. 
Company and its nominees shall have the right to use and apply for common law
and statutory protections of such Inventions in any and all countries and
jurisdictions.  Furthermore, Executive agrees to assist the Company, or its
designee, any copyrights, patents, mask work rights or other intellectual
property rights relating thereto in any and all countries and jurisdictions,
including the disclosure to the Company of all pertinent information and data
with respect thereto, the execution of all applications, specifications, oaths,
assignments and all other instruments which the Company shall deem necessary in
order to apply for and obtain such rights and in order to assign and convey to
the Company, its successors, assigns and nominees the sole and exclusive right,
title and interest in and to such Inventions, including all rights associated
with works of authorship throughout the world, any copyrights, patents, mask
work rights, trade secrets or other intellectual property rights relating
thereto or analogous to those set forth herein.  Executive further agrees
that his obligation to execute or cause to be executed, when it is in his power
to do so, any such instrument or papers shall continue after the termination of
this Agreement.  If the Company is unable, for any reason, to secure
Executive’s signature to apply for or to pursue any application for any United
States or foreign patents or copyright registrations covering Inventions or
original works of authorship assigned to the Company as above, then Executive
hereby irrevocably designate and appoint the Company and its duly authorized
officers and agents as Executive’s agent and attorney in

 

6

 

fact, to
act for and in Executive’s behalf and stead to execute and file any such
applications and to do all other lawfully permitted acts to further the
prosecution and issuance of letters patent or copyright registrations thereon
with the same legal force and effect as if executed by Executive.  The
foregoing rights shall also apply to any divisions, continuations, renewals,
reissues and extensions of the foregoing, as applicable, now existing or
hereafter filed, issued or acquired.

 

 
(ii)          
Inventions
Retained and Licensed. 
Executive has attached hereto, as Exhibit
A, a list
describing all inventions, original works of authorship, developments,
improvements and trade secrets which were made by Executive prior to his
engagement with the Company, which belong to Executive, which relate to the
Company’s business, products or research and development, and which are not
assigned to the Company hereunder (collectively referred to as “Prior
Inventions”); or, if no such list is attached, Executive represents that there
are no such Prior Inventions.  If in the course of Executive’s engagement
with the Company, Executive incorporates into any inventions, improvement,
development, product, copyrightable material or trade secret any invention,
improvement, development, concept, discovery or other proprietary information
owned by Executive or in which Executive has an interest, the Company is hereby
granted and shall have a nonexclusive, royalty-free, irrevocable, perpetual,
worldwide license to make, have made, modify, use and sell such item as part of
or in connection with such product, process or machine.

 

 
(iii)         
Inventions
Assigned to the United States. 
Executive agrees to assign to the United States government all of Executive’s
right, title, and interest in and to any and all Inventions whenever such full
title is required to be in the United States by a contract between the Company
and the United States or any of its agencies.

 

 
(iv)         
Maintenance
of Records. 
Executive agrees to keep and maintain adequate and current written records of
all Inventions made by it (solely or jointly with others) during the term of his
engagement with the Company.  The records will be in the form of notes,
sketches, drawings and any other format that may be specified by the
Company.  The records will be available to and remain the sole property of
the Company at all times.

 

9.            
Termination
of Employment.

 

 (a)          
Grounds
for Termination. 
Executive’s employment shall terminate prior to the expiration of the initial
term set forth in Section 2 or any extension thereof in the event that at
any time:

 

 
(i)           
Executive
shall die;

 

 
(ii)          
Executive:

 

7

 

  
(x)           
has
engaged in willful and material misconduct, including fraud or embezzlement; or
conviction of a felony or a gross misdemeanor; or has engaged in gross neglect
of his duties as an officer or employee of the Company; or has committed any act
or omission which materially injures the financial condition or business
reputation of the Company or any of its subsidiaries or affiliates;
or

 

  
(y)          
has
breached this Agreement in any material respect, which breach is not cured by
Executive or is not capable of being cured by Executive within 30 days after
written notice of such breach is delivered to Executive.

 

 
(iii)         
The Board
of Directors shall determine that Executive has failed, by reason of illness,
incapacity or disability, to render services of the character contemplated by
this Agreement for at least 180 days during any 360-day period;

 

 
(iv)         
The Board
of Directors shall terminate Executive’s employment other than pursuant to
clause (ii) above, not including delivery of a notice of nonrenewal given by the
Company pursuant to Section 2 of this Agreement; or Executive terminates
his employment for “Good Reason.”  For purposes of this Agreement, “Good
Reason” means a material breach of this Agreement by the Company not caused by
Executive (including, without limitation, a material reduction in Executive’s
duties or responsibilities without Executive’s consent, or a material diminution
in the compensation or benefits payable to Executive)  which breach has not
been cured within 15 days after written notice thereof by the Executive to the
Company; or

 

 
(v)          
The
Executive shall terminate his employment other than for Good
Reason.

 

 (b)          
Entitlement
to Accrued Compensation. 
If Executive’s employment is terminated by the Company pursuant to Section
9(a)(ii) or by the Executive pursuant to Section 9(a)(v), Executive’s rights to
pay and benefits shall cease on the date his employment under this Agreement
terminates, and he shall be paid all accrued Base Salary, any unpaid Bonus due
under Section 4(b), any vested deferred compensation (other than pension plan or
profit-sharing plan benefits, which will be paid in accordance with the
applicable plan), any other benefits then due under Section 4(d) of this
Agreement, accrued vacation pay, and any appropriate business expenses incurred
by the Executive in connection with his duties hereunder, all to the effective
date of termination (collectively, the “Accrued Compensation”), but no other
compensation or reimbursement of any kind shall be owed to the Executive by the
Company.

 

 (c)          
Entitlement
to Accrued Compensation Upon Death. 
If Executive’s employment is terminated pursuant to Section 9(a)(i), Executive’s
rights to pay and benefits shall cease on the last day of the month in which his
death occurs, and his personal representative shall be

 

8

 

paid all
Accrued Compensation up to and including such date, but no other compensation or
reimbursement of any kind shall be owed to the Executive’s estate by the
Company.

 

 (d)          
Entitlement
to Accrued Compensation Upon Disability. 
If Executive’s employment is terminated by the Company pursuant to Section
9(a)(iii) upon a 90 day prior written notice to the Executive, Executive’s
rights to pay and benefits shall cease on the last day of the 90 day termination
notice, and he shall be paid all Accrued Compensation (less any payments
received by Executive from any disability income insurance policy provided to
him by the Company) up to and including such date, but no other compensation or
reimbursement of any kind shall be owed to the Executive by the
Company.

 

 (e)          
Salary
Continuation. 
If Executive’s employment is terminated by the Company pursuant to Section 9(a)(iv),
or by the Executive for Good Reason pursuant to Section 9(a)(iv), the Company
shall pay to the Executive all Accrued Compensation to the effective date of
termination, and the Company shall continue to pay to Executive his then
effective Base Salary and shall continue to provide all benefits to Executive
pursuant to Section 4(d) for the remainder of the then existing term of this
Agreement. No deduction shall be made by the Corporation under this Section for
any compensation earned by the Executive from any other employment or for any
other monies otherwise received by the Executive subsequent to termination of
employment hereunder. In addition, if Executive’s employment is terminated
pursuant to Section 9(a)(iv), the Shareholders (as defined in the Stock
Purchase Agreement) shall have the right to demand that the Company pay the
Buyout Purchase Price as provided under paragraph 1.3.3 of the Stock Purchase
Agreement.

 

 (f)           
Release. 
The payment of any amounts to Executive under Section 9(b) through
Section 9(e) or otherwise after termination of Executive’s employment with
the Company shall be conditioned upon the Company receiving a full and complete
release from Executive of any current or future claims Executive may have
against the Company, its officers and directors and other Company affiliates
other than (i) those current and specific claims identified on a list the
Executive provides to the Company along with the signed release (the “List”),
(ii) with respect to the payment of amounts specifically provided for herein,
(iii) pursuant to rights of indemnification under the Company’s Certificate
of Incorporation or by-laws or (iv) pursuant to the terms of any employee
benefit plan of the Company in which Executive is a participant.  If the
Company requires that Executive provide the release discussed in the prior
sentence as a condition to making any payments hereunder, and if Executive
delivers such a release, then the Company shall also be required to give to
Executive a full and complete release of any current or future claims the
Company may have against Executive other than under Sections 5, 6, 7, 8 and
9(g) of this Agreement and in connection with those claims provided on the
List.

 

 (g)          
Surrender
of Records and Property. 
Upon termination of his employment with the Company, Executive shall deliver
promptly to the Company all records, manuals, books, blank forms, documents,
letters, memoranda, notes, notebooks, reports, data, tables, calculations or
copies thereof that relate in any way to the business, products, practices or
techniques of the Company, and all other property, trade secrets and
confidential information of the Company, including, but not

 

9

 

limited
to, all documents that in whole or in part contain any trade secrets or
confidential information of the Company, which in any of these cases are in his
possession or under his control.

 

10.          
Change
of Control. 
Notwithstanding any other provision of this Agreement, should a Change of
Control (as defined below) occur, Executive, at his sole option and discretion,
may terminate his employment under this Agreement at any time within one year
after such change of control upon 15 days notice.  In the event of such
termination, Company shall pay to Executive a severance payment equal to the
amount described in section 9(e) as the base amount as defined in Section
280G(b)(3)  of the Internal Revenue Code of 1986, as amended (“Code”) 
minus $1.00 which shall be payable no later than one month after the effective
date of the Executive’s termination of employment. In addition, in the event of
a Change of Control, all outstanding stock options held by Executive shall
become fully exercisable (to the extent not already exercisable).  For
purposes of this Agreement, a “Change in Control” shall be deemed to have
occurred if (a) any “person” or “group” (within the meaning of Sections 13 (d)
and 14(d)(2) of the Exchange Act of 1934 (the “1934 Act”), other than a trustee
or other fiduciary holding securities under an employee benefit plan of the
Corporation is or becomes the “beneficial owner” (as defined in Rule 13d-3 under
the 1934 Act), directly or indirectly, of more than 33-1/3 of the then
outstanding voting stock of the Corporation; or (b) at any time during any
period of three consecutive years, individuals who at the beginning of such
period constituted the Board of Directors (and any new director whose election
by the Board or whose nomination for election by the Corporation’s stockholders
was approved by a vote of at least two-thirds of the directors then still in
office who either were directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for any
reason to constitute a majority thereof; or (c) the stockholders of the
Corporation approve a merger or consolidation of the Corporation with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Corporation outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 80% of the combined
voting power of the voting securities of the Corporation or such surviving
entity outstanding immediately after such merger or consolidation.

 

11.          
Remedies.

 

 (a)          
Remedies. 
Executive acknowledges that it would be difficult to fully compensate the
Company for damages resulting from any breach by him of the provisions of
Sections 5, 6, 7, 8 and 9(g) of this Agreement.  Accordingly, in the
event of any actual or threatened breach of such provisions, the Company shall
(in addition to any other remedies it may have) be entitled to temporary and/or
permanent injunctive and other equitable relief to enforce such provisions, and
such relief may be granted without the necessity or proving actual
damages.

 

 (b)          
Arbitration. 
Except for disputes arising under Sections 5, 6, 7, 8 or 9(g) hereof, all
disputes arising under this Agreement shall be submitted for final and binding
arbitration to an internationally recognized arbitrator located in England, not
affiliated with either the Company, DSD Holding or the Executive.  The
decision of the arbitrator shall be final and binding, and any 

 

10

 

court of
competent jurisdiction may enter judgment upon the award.  All fees and
expenses of the arbitrator shall be paid by the party whose position is not
upheld by the arbitrator.  The arbitrator shall have jurisdiction and
authority to interpret and apply the provisions of this Agreement and relevant
federal, state and local laws insofar as necessary to the determination of the
dispute and to remedy any breaches of the Agreement and/or applicable laws, but
shall not have jurisdiction or authority to award punitive damages or alter in
any way the provisions of this Agreement.  The arbitrator shall have the
authority to award attorneys fees and costs to the prevailing party.  The
parties agree that this arbitration provision shall be in lieu of any claims
procedure which may be required under US federal law.

 

12.          
Miscellaneous.

 

 (a)          
Governing
Law. 
All matters relating to the interpretation, construction, validity and
enforcement of this Agreement shall be governed by the internal laws of the
State of Minnesota without giving effect to any choice or conflict of law
provision or rule (whether of the State of Minnesota or any other jurisdiction)
that would cause the application of laws of any jurisdiction other than the
State of Minnesota.

 

 (b)          
Entire
Agreement. 
This Agreement contains the entire agreement of the parties relating to the
subject matter hereof and supersedes all prior agreements and understandings
with respect to such subject matter, and the parties hereto have made no
agreements, representations or warranties relating to the subject matter of this
Agreement which are not set forth herein.

 

 (c)          
Amendments. 
No amendment or modification of this Agreement shall be deemed effective unless
made in writing and signed by the parties hereto.

 

 (d)          
No
Waiver. 
No term or condition of this Agreement shall be deemed to have been waived, nor
shall there be any estoppel to enforce any provisions of this Agreement, except
by a statement in writing signed by the party against whom enforcement of the
waiver or estoppel is sought.  Any written waiver shall not be deemed a
continuing waiver unless specifically stated, shall operate only as to the
specific term or condition waived, and shall not constitute a waiver of such
term or condition for the future or as to any act other than that specifically
waived.

 

 (e)          
Other
Employment or Consulting Agreements. 
Executive represents and warrants that (i) Executive has terminated all other
employment or consulting agreements he has previously entered into and (ii)
neither Executive nor any entity which previously employed the Executive has any
obligations under such agreements following their termination.

 

 (f)           
Assignment. 
This Agreement shall not be assignable, in whole or in part, by either party
without the written consent of the other party, except that the Company may,
without the consent of Executive, assign its rights and obligations under this
Agreement to any corporation, firm or other business entity with or into which
the Company may merge or consolidate, or to which the Company may sell or
transfer all or substantially all of its assets, or of which 50% or more of
the

 

11

 

equity
investment and of the voting control is owned, directly or indirectly, by, or is
under common ownership with, the Company.  After any such assignment by the
Company, the Company shall be discharged from all further liability hereunder,
and such assignee shall thereafter be deemed to be the Company for the purposes
of all provisions of this Agreement, including this Section.

 

 (g)          
Counterparts. 
This Agreement may be executed in any number of counterparts, and such
counterparts executed and delivered, each as an original, shall constitute but
one and the same instrument.

 

 (h)          
Severability. 
Subject to Section 7(e), to the extent any provision of this Agreement
shall be invalid or unenforceable, it shall be considered deleted herefrom and
the remainder of such provision and of this Agreement shall be unaffected and
shall continue in full force and effect.

 

 (i)           
Captions
and Headings. The
captions and paragraph headings used in this Agreement are for convenience of
reference only and shall not affect the construction or interpretation of this
Agreement or any of the provisions hereof.

 

 (j)           
Payments
to Executive. Unless
otherwise specified, all amounts payable to the Executive shall be paid in
Danish Krones.

 

IN
WITNESS WHEREOF, Executive and the Company have executed this Agreement as of
the date set forth in the first paragraph.

 

	
       
	
      DIGITAL
      ANGEL CORPORATION

	
       
	
       

	
       
	
       

	
       
	
      By
	
      /s/
      James P. Santelli
	
       

	
       
	
       
	
      James
      P. Santelli

	
       
	
       
	
      Its:
      Vice President, Finance and

	
       
	
       
	
      Chief
      Financial Officer

	
       
	
       

	
       
	
       

	
       
	
      EXECUTIVE

	
       
	
       

	
       
	
      /s/
      Lasse Nordfjeld
	
       

	
       
	
      Lasse
      Nordfjeld

	 	 	 	 	 

 

12Exhibit 10.77

Exhibit
10. 77

 

THERMO
LIFE ENERGY CORP.

 

 

2003
FLEXIBLE STOCK PLAN

 

 

 

THERMO
LIFE ENERGY CORP.

 

2003
FLEXIBLE STOCK PLAN

 

TABLE OF
CONTENTS

 

 

	 	 	 	
      Page

				
	
      1.
      NAME AND PURPOSE
	
      1

	 	
      1.1.
      Name.
	
      1

	 	
      1.2.
      Purpose.
	
      1

	 	 	 	 
				
	
      2.
      DEFINITIONS OF TERMS AND RULES OF CONSTRUCTION
	
      1

	 	
      2.1.
      General Definitions.
	
      1

	 	 	
      2.1.1.
      Affiliate.
	
      1

	 	 	
      2.1.2.
      Agreement.
	
      1

	 	 	
      2.1.3.
      Benefit.
	
      1

	 	 	
      2.1.4.
      Board.
	
      1

	 	 	
      2.1.5.
      Cash Award.
	
      2

	 	 	
      2.1.6.
      Change of Control.
	
      2

	 	 	
      2.1.7.
      Code.
	
      2

	 	 	
      2.1.8.
      Company.
	
      2

	 	 	
      2.1.9.
      Committee.
	
      2

	 	 	
      2.1.10.
      Common Stock..
	
      3

	 	 	
      2.1.11.
      Director.
	
      3

	 	 	
      2.1.12.
      Effective Date.
	
      3

	 	 	
      2.1.13.
      Employee.
	
      3

	 	 	
      2.1.14.
      Employer.
	
      3

	 	 	
      2.1.15.
      Exchange Act.
	
      3

	 	 	
      2.1.16.
      Fair Market Value.
	
      3

	 	 	
      2.1.17.
      Fiscal Year.
	
      4

	 	 	
      2.1.18.
      ISO.
	
      4

	 	 	
      2.1.19.
      NQSO.
	
      4

	 	 	
      2.1.20.
      Option.
	
      4

	 	 	
      2.1.21.
      Other Stock Based Award.
	
      4

	 	 	
      2.1.22.
      Parent.
	
      4

	 	 	
      2.1.23.
      Participant.
	
      4

	 	 	
      2.1.24.
      Performance Based Compensation.
	
      4

	 	 	
      2.1.25.
      Performance Share.
	
      4

	 	 	
      2.1.26.
      Plan.
	
      5

	 	 	
      2.1.27.
      Reload Option.
	
      5

	 	 	
      2.1.28.
      Restricted Stock.
	
      5

	 	 	
      2.1.29.
      Rule 16b-3.
	
      5

	 	 	
      2.1.30.
      SEC.
	
      5

	 	 	
      2.1.31.
      Share.
	
      5

	 	 	
      2.1.32.
      SAR.
	
      5

	 	 	
      2.1.33.
      Subsidiary.
	
      5

	 	 
	
      2.2.
      Other Definitions.
	
      5

	
      2.3.
      Conflicts.
	
      6

 

 

i

	
      3.
      COMMON STOCK
	
      6

	 	
      3.1.
      Number of Shares.
	
      6

	 	
      3.2.
      Reusage.
	
      6

	 	
      3.3.
      Adjustments.
	
      6

				
	 	 
	
      4.
      ELIGIBILITY
	
      6

	 	
      4.1.
      Determined By Committee.
	
      6

				
	 	 
	
      5.
      ADMINISTRATION
	
      7

	 	
      5.1.
      Committee.
	
      7

	 	
      5.2.
      Authority.
	
      7

	 	
      5.3.
      Delegation.
	
      8

	 	
      5.4.
      Determination.
	
      8

				
	 	 
	
      6.
      AMENDMENT
	
      8

	 	
      6.1.
      Power of Board.
	
      8

	 	
      6.2.
      Limitation.
	
      8

				
	 	 
	
      7.
      TERM AND TERMINATION
	
      9

	 	
      7.1.
      Term.
	
      9

	 	
      7.2.
      Termination.
	
      9

				
	 	 
	
      8.
      MODIFICATION OR TERMINATION OF BENEFITS
	
      9

	 	
      8.1.
      General.
	
      9

	 	
      8.2.
      Committee’s Right.
	
      9

				
	 	 
	
      9.
      CHANGE OF CONTROL
	
      9

				
				
	 	 
	
      10.
      AGREEMENTS AND CERTAIN BENEFITS
	
      10

	 	
      10.1.
      Grant Evidenced by Agreement.
	
      10

	 	
      10.2.
      Provisions of Agreement.
	
      10

	 	
      10.3.
      Transferability.
	
      11

				
	 	 
	
      11.
      REPLACEMENT AND TANDEM AWARDS
	
      11

	 	
      11.1.
      Replacement.
	
      11

	 	
      11.2.
      Tandem Awards.
	
      11

				
	 	 
	
      12.
      PAYMENT, DIVIDENDS, DEFERRAL AND WITHHOLDING
	
      11

	 	
      12.1.
      Payment.
	
      11

	 	
      12.2.
      Dividend Equivalents.
	
      12

	 	
      12.3.
      Deferral.
	
      12

	 	
      12.4.
      Withholding.
	
      12

				
	 	 
	
      13.
      OPTIONS
	
      12

	 	
      13.1.
      Types of Options.
	
      12

	 	
      13.2.
      Grant of ISOs and Option Price.
	
      12

	 	
      13.3.
      Other Requirements for ISOs.
	
      12

	 	
      13.4.
      NQSOs.
	
      13

	 	
      13.5.
      Determination by Committee.
	
      13

 

ii

				
	
      14.
      SARS
	
      13

	 	
      14.1.
      Grant and Payment.
	
      13

	 	
      14.2.
      Grant of Tandem Award.
	
      13

	 	
      14.3.
      ISO Tandem Award.
	
      13

	 	
      14.4.
      Payment of Award.
	
      13

				
	 	 
	
      15.
      ANNUAL LIMITATIONS
	
      13

	 	
      15.1.
      Limitation on Options and SARs.
	
      13

	 	
      15.2.
      Computations.
	
      14

	 	 	 	 
	 	 
	
      16.
      RESTRICTED STOCK AND PERFORMANCE SHARES
	
      14

	 	
      16.1.
      Restricted Stock.
	
      14

	 	
      16.2.
      Cost of Restricted Stock.
	
      14

	 	
      16.3.
      Non-Transferability.
	
      14

	 	
      16.4.
      Performance Shares.
	
      14

	 	
      16.5.
      Grant.
	
      14

	 	 	 	 
	 	 
	
      17.
      CASH AWARDS
	
      15

	 	
      17.1.
      Grant.
	
      15

	 	
      17.2.
      Rule 16b-3.
	
      15

	 	
      17.3.
      Restrictions.
	
      15

				
	 	 
	
      18.
      OTHER STOCK BASED AWARDS AND OTHER BENEFITS
	
      15

	 	
      18.1.
      Other Stock Based Awards.
	
      15

	 	
      18.2.
      Other Benefits.
	
      15

	 	 
	 	 
	
      19.
      MISCELLANEOUS PROVISIONS
	
      15

	 	
      19.1.
      Underscored References.
	
      15

	 	
      19.2.
      Number and Gender.
	
      16

	 	
      19.3.
      Unfunded Status of Plan.
	
      16

	 	
      19.4.
      Termination of Employment.
	
      16

	 	
      19.5.
      Designation of Beneficiary.
	
      16

	 	
      19.6.
      Governing Law.
	
      17

	 	
      19.7.
      Purchase for Investment.
	
      17

	 	
      19.8.
      No Employment Contract.
	
      17

	 	
      19.9.
      No Effect on Other Benefits.
	
      17

iii

 

THERMO
LIFE ENERGY CORP.

 

2003
FLEXIBLE STOCK PLAN

 

 

	
      1.
	
      NAME
      AND PURPOSE

 

	 	
      1.1.
	
      Name.

 

The name
of this Plan is the “Thermo Life Energy Corp. 2003 Flexible Stock
Plan.”

 

	 	
      1.2.
	
      Purpose.

 

The
Company has established this Plan to attract, retain, motivate and reward
Employees and Directors and to encourage ownership of the Company’s Common Stock
by them.

 

 

	
      2.
	
      DEFINITIONS
      OF TERMS AND RULES OF CONSTRUCTION

 

	 	
      2.1.
	
      General
      Definitions.

 

The
following words and phrases, when used in the Plan, unless otherwise
specifically defined or unless the context clearly otherwise requires, shall
have the following respective meanings:

 

	 	
      2.1.1.
	
      Affiliate.

 

A Parent
or Subsidiary of the Company.

 

	 	
      2.1.2.
	
      Agreement.

 

The
document which evidences the grant of any Benefit under the Plan and which sets
forth the Benefit and the terms, conditions and provisions of, and restrictions
relating to, such Benefit.

 

	 	
      2.1.3.
	
      Benefit.

 

Any
benefit granted to a Participant under the Plan.

 

	 	
      2.1.4.
	
      Board.

 

The Board
of Directors of the Company.

 

1

 

	 	
      2.1.5.
	
      Cash
      Award.

 

A Benefit
payable in the form of cash.

 

	 	
      2.1.6.
	
      Change
      of Control.

 

If any
“person” (as such term is used in Sections 13(d) and 14(d)(2) of the Exchange
Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated
under the Exchange Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the Company’s then
outstanding securities; upon the first purchase of the Common Stock pursuant to
a tender or exchange offer (other than a tender or exchange offer made by the
Company); upon the approval by the Company’s stockholders of a merger or
consolidation, a sale or disposition of all or substantially of the Company’s
assets or a plan of liquidation or dissolution of the Company; or if during an
period of two consecutive years, individuals who at the beginning of such period
constitute the Board cease for any reason to constitute at least a majority
thereof, unless the election or nomination for the election by the Company’s
stockholders of each new director was approved by a vote of at least 2/3 of the
Board then still in office who were members of the Board at the beginning of the
period. Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur if the Company either merges or consolidates with or into another
company or sells or disposes of all or substantially all of its assets to
another company, if such merger, consolidation, sale or disposition is in
connection with a corporate restructuring wherein the stockholders of the
Company immediately before such merger, consolidation, sale or disposition own,
directly or indirectly, immediately following such merger, consolidation, sale
or disposition of at least 80% of the combined voting power of all outstanding
classes of securities of the company resulting from such merger or
consolidation, or to which the Company sells or disposes of its assets, in
substantially the same proportion as their ownership in the Company immediately
before such merger, consolidation, sale or disposition.

 

	 	
      2.1.7.
	
      Code.

 

The
Internal Revenue Code of 1986, as amended. Any reference to the Code includes
the regulations promulgated pursuant to the Code.

 

	 	
      2.1.8.
	
      Company.

 

Thermo
Life Energy Corp.

 

	 	
      2.1.9.
	
      Committee.

 

The
Committee described in Section 5.1.

 

2

 

	 	
      2.1.10.
	
      Common
      Stock.

 

The
Company’s common stock which presently has a par value of $.001 per
Share.

 

	 	
      2.1.11.
	
      Director.

 

A member
of the Board or a member of the Board of Directors of an Affiliate.

 

	 	
      2.1.12.
	
      Effective
      Date.

 

The date
that the Plan is approved by the shareholders of the Company which was January
2, 2003.

 

	 	
      2.1.13.
	
      Employee.

 

Any
person employed by the Employer.

 

	 	
      2.1.14.
	
      Employer.

 

The
Company and all Affiliates.

 

	 	
      2.1.15.
	
      Exchange
      Act.

 

The
Securities Exchange Act of 1934, as amended.

 

	 	
      2.1.16.
	
      Fair
      Market Value.

 

The last
sale price, regular way, or, in case no such sale takes place on such date, the
average of the closing bid and asked prices, regular way, of the Shares, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange, Inc. (the “NYSE”) or, if the Shares are not listed or admitted
to trading on the NYSE, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Shares are listed or admitted to trading or, if
the Shares are not listed or admitted to trading on any national securities
exchange, the last quoted sale price on such date or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market on
such date, as reported by the National Association of Securities Dealers, Inc.
Automated Quotations System or such other system then in use, or, if on any such
date the Shares are not quoted by any such organization, the average of the
closing bid and asked prices on such date as furnished by a professional market
maker making a market in the Shares selected by the Committee. If the Shares are
not publicly held or so listed or publicly traded, the determination of the Fair
Market Value per Share shall be made in good faith by the
Committee.

 

3

 

	 	
      2.1.17.
	
      Fiscal
      Year.

 

The
taxable year of the Company which is the calendar year.

 

	 	
      2.1.18.
	
      ISO.

 

An
Incentive Stock Option as defined in Section 422 of the Code.

 

	 	
      2.1.19.
	
      NQSO.

 

A
non-qualified stock Option, which is an Option that does not qualify as an
ISO.

 

	 	
      2.1.20.
	
      Option.

 

An option
to purchase Shares granted under the Plan.

 

	 	
      2.1.21.
	
      Other
      Stock Based Award.

 

An award
under Section 8 that is
valued in whole or in part by reference to, or is otherwise based on, Common
Stock.

 

	 	
      2.1.22.
	
      Parent.

 

Any
corporation (other than the Company or a Subsidiary) in an unbroken chain of
corporations ending with the Company, if, at the time of the grant of an Option
or other Benefit, each of the corporations (other than the Company) owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

 

	 	
      2.1.23.
	
      Participant.

 

An
individual who is granted a Benefit under the Plan. Benefits may be granted only
to Employees and Directors.

 

	 	
      2.1.24.
	
      Performance
      Based Compensation.

 

Compensation
which meets the requirements of Section 162(m)(4)(C) of the Code.

 

	 	
      2.1.25.
	
      Performance
      Share.

 

A Share
awarded to a Participant under Section 16.4 of the
Plan.

 

4

 

	 	
      2.1.26.
	
      Plan.

 

The
Thermo Life Energy Corp. 2003 Flexible Stock Plan and all amendments and
supplements to it.

 

	 	
      2.1.27.
	
      Reload
      Option.

 

An Option
to purchase the number of Shares used by a Participant to exercise an Option and
to satisfy any withholding requirement incident to the exercise of such
Option.

 

	 	
      2.1.28.
	
      Restricted
      Stock.

 

Shares
issued under Section 16 of the Plan.

 

	 	
      2.1.29.
	
      Rule
      16b-3.

 

Rule
16b-3 promulgated by the SEC, as amended, or any successor rule in effect from
time to time.

 

	 	
      2.1.30.
	
      SEC.

 

The
Securities and Exchange Commission.

 

	 	
      2.1.31.
	
      Share.

 

A share
of Common Stock.

 

	 	
      2.1.32.
	
      SAR.

 

A stock
appreciation right, which is the right to receive an amount equal to the
appreciation, if any, in the Fair Market Value of a Share from the date of the
grant of the right to the date of its payment.

 

	 	
      2.1.33.
	
      Subsidiary.

 

Any
corporation, other than the Company, in an unbroken chain of corporations
beginning with the Company if, at the time of grant of an Option or other
Benefit, each of the corporations, other than the last corporation in the
unbroken chain, owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such chain.

 

	 	
      2.2.
	
      Other
      Definitions.

 

In
addition to the above definitions, certain words and phrases used in the Plan
and any Agreement may be defined in other portions of the Plan or in such
Agreement.

 

5

 

	 	
      2.3.
	
      Conflicts.

 

In the
case of any conflict in the terms of the Plan relating to a Benefit, the
provisions in the section of the Plan which specifically grants such Benefit
shall control those in a different section. In the case of any conflict between
the terms of the Plan relating to a Benefit and the terms of an Agreement
relating to a Benefit, the terms of the Plan shall control.

 

 

	
      3.
	
      COMMON
      STOCK

 

	 	
      3.1.
	
      Number
      of Shares.

 

The
number of Shares which may be issued or sold or for which Options, SARs or
Performance Shares may be granted under the Plan shall be 7,000,000. Such Shares
may be authorized but unissued Shares, Shares held in the treasury, or both. The
full number of Shares available may be used for any type of Option or other
Benefit.

 

	 	
      3.2.
	
      Reusage.

 

If an
Option or SAR expires or is terminated, surrendered, or canceled without having
been fully exercised, if Restricted Shares or Performance Shares are forfeited,
or if any other grant results in any Shares not being issued, the Shares covered
by such Option or SAR, grant of Restricted Shares, Performance Shares or other
grant, as the case may be, shall again be available for use under the Plan. Any
Shares which are used as full or partial payment to the Company upon exercise of
an Option or for any other Benefit that requires a payment to the Company shall
be available for purposes of the Plan.

 

	 	
      3.3.
	
      Adjustments.

 

If there
is any change in the Common Stock of the Company by reason of any stock
dividend, spin-off, split-up, spin-out, recapitalization, merger, consolidation,
reorganization, combination or exchange of shares, or otherwise, the number of
SARs and number and class of shares available for Options and grants of
Restricted Stock, Performance Shares and Other Stock Based Awards and the number
of Shares subject to outstanding Options, SARs, grants of Restricted Stock which
are not vested, grants of Performance Shares which are not vested, and Other
Stock Based Awards, and the price thereof, as applicable, shall be appropriately
adjusted by the Committee.

 

 

	
      4.
	
      ELIGIBILITY

 

	 	
      4.1.
	
      Determined
      By Committee.

 

The
Participants and the Benefits they receive under the Plan shall be determined
solely by the Committee. In making its determinations, the Committee shall
consider past, present and expected future contributions of Participants and
potential Participants to the Employer,

 

6

including,
without limitation, the performance of, or the refraining from the performance
of, services. Unless specifically provided otherwise herein, all determinations
of the Committee in connection with the Plan or an Agreement shall be made in
its sole discretion.

 

 

	
      5.
	
      ADMINISTRATION

 

	 	
      5.1.
	
      Committee.

 

The Plan
shall be administered by the Committee. The Committee shall consist of the
Board, unless the Board appoints a Committee of two or more but less than all of
the Board. If the Committee does not include the entire Board, it shall serve at
the pleasure of the Board, which may from time to time appoint members in
substitution for members previously appointed and fill vacancies, however
caused, in the Committee. The Committee may select one of its members as its
Chairman and shall hold its meetings at such times and places as it may
determine. A majority of its members shall constitute a quorum. All
determinations of the Committee made at a meeting at which a quorum is present
shall be made by a majority of its members present at the meeting. Any decision
or determination reduced to writing and signed by a majority of the members
shall be fully as effective as if it had been made by a majority vote at a
meeting duly called and held.

 

	 	
      5.2.
	
      Authority.

 

Subject
to the terms of the Plan, the Committee shall have discretionary authority
to:

 

(a) determine
the individuals to whom Benefits are granted, the type and amounts of Benefits
to be granted and the date of issuance and duration of all such
grants;

 

(b) determine
the terms, conditions and provisions of, and restrictions relating to, each
Benefit granted;

 

(c) interpret
and construe the Plan and all Agreements;

 

(d) prescribe,
amend and rescind rules and regulations relating to the Plan;

 

(e) determine
the content and form of all Agreements;

 

(f) determine
all questions relating to Benefits under the Plan;

 

(g) maintain
accounts, records and ledgers relating to Benefits;

 

(h) maintain
records concerning its decisions and proceedings;

 

(i) employ
agents, attorneys, accountants or other persons for such purposes as the
Committee considers necessary or desirable;

 

7

 

(j) take, at
any time, any action required or permitted by Section 9.1 or 9.2(a),
respectively, irrespective of whether any Change of Control has occurred or is
imminent;

 

(k) determine,
except to the extent otherwise provided in the Plan, whether and the extent to
which Benefits under the Plan will be structured to conform to the requirements
applicable to Performance-Based Compensation, and to take such action, establish
such procedures, and impose such restrictions at the time such Benefits are
granted as the Committee determines to be necessary or appropriate to conform to
such requirements; and

 

(l) do and
perform all acts which it may deem necessary or appropriate for the
administration of the Plan and carry out the purposes of the Plan.

 

	 	
      5.3.
	
      Delegation.

 

Except as
required by Rule 16b-3 with respect to grants of Options, Stock Appreciation
Awards, Performance Shares, Other Stock Based Awards, or other Benefits to
individuals who are subject to Section 16 of the
Exchange Act or as otherwise required for compliance with Rule 16b-3 or other
applicable law, the Committee may delegate all or any part of its authority
under the Plan to any Employee, Employees or committee.

 

	 	
      5.4.
	
      Determination.

 

All
determinations of the Committee shall be final.

 

 

	
      6.
	
      AMENDMENT

 

	 	
      6.1.
	
      Power
      of Board.

 

Except as
hereinafter provided, the Board shall have the sole right and power to amend the
Plan at any time and from time to time.

 

	 	
      6.2.
	
      Limitation.

 

The Board
may not amend the Plan, without approval of the shareholders of the
Company:

 

(a) in a
manner which would cause Options which are intended to qualify as ISOs to fail
to qualify;

 

(b) in a
manner which would cause the Plan to fail to meet the requirements of Rule
16b-3; or

 

(c) in a
manner which would violate applicable law.

 

8

 

 

	
      7.
	
      TERM
      AND TERMINATION

 

	 	
      7.1.
	
      Term.

 

The Plan
shall commence as of the Effective Date and, subject to the terms of the Plan,
including those requiring approval by the shareholders of the Company and those
limiting the period over which ISOs or any other Benefits may be granted, shall
continue in full force and effect until terminated.

 

	 	
      7.2.
	
      Termination.

 

The Plan
may be terminated at any time by the Board.

 

 

	
      8.
	
      MODIFICATION
      OR TERMINATION OF BENEFITS

 

	 	
      8.1.
	
      General.

 

Subject
to the provisions of Section 8.2, the
amendment or termination of the Plan shall not adversely affect a Participant’s
right to any Benefit granted prior to such amendment or
termination.

 

	 	
      8.2.
	
      Committee’s
      Right.

 

Any
Benefit granted may be converted, modified, forfeited or canceled, in whole or
in part, by the Committee if and to the extent permitted in the Plan or
applicable Agreement or with the consent of the Participant to whom such Benefit
was granted. Except as may be provided in an Agreement, the Committee may, in
its sole discretion, in whole or in part, waive any restrictions or conditions
applicable to, or accelerate the vesting of, any Benefit.

 

 

	
      9.
	
      CHANGE
      OF CONTROL

 

	 	
      9.1
      
	
      Vesting
      and Payment.

 

In the
event of a Change of Control:

 

(a)
 all
outstanding Options shall become fully exercisable, except to the extent that
the right to exercise the Option is subject to restrictions established in
connection with an SAR that is issued in tandem with the Option;

 

(b)
 all
outstanding SARs shall become immediately payable, except to the extent that the
right to exercise the SAR is subject to restrictions established in connection
with an Option that is issued in tandem with the SAR;

 

(c)
 all
Shares of Restricted Stock shall become fully vested;

 

9

 

(d)
 all
Performance Shares shall be deemed to be fully earned and shall be paid out in
such manner as determined by the Committee; and

 

(e)
 all Cash
Awards, Other Stock Based Awards and other Benefits shall become fully vested
and/or earned and paid out in such manner as determined by the
Committee.

 

	 	
      9.2
      
	
      Other
      Action.

 

In the
event of a Change of Control, the Committee, in its sole discretion, may, in
addition to the provisions of Section 9.1 above and to the extent not
inconsistent therewith:

 

(a)
 provide
for the purchase of any Benefit for an amount of cash equal to the amount which
could have been attained upon the exercise or realization of such Benefit had
such Benefit been currently exercisable or payable;

 

(b)
 make such
adjustment to the Benefits then outstanding as the Committee deems appropriate
to reflect such transaction or change; and/or

 

(c)
 cause the
Benefits then outstanding to be assumed, or new Benefits substituted therefor,
by the surviving corporation in such change.

 

 

	
      10.
	
      AGREEMENTS
      AND CERTAIN BENEFITS

 

	 	
      10.1.
	
      Grant
      Evidenced by Agreement.

 

The grant
of any Benefit under the Plan may be evidenced by an Agreement which shall
describe the specific Benefit granted and the terms and conditions of the
Benefit. The granting of any Benefit shall be subject to, and conditioned upon,
the recipient’s execution of any Agreement required by the Committee. Except as
otherwise provided in an Agreement, all capitalized terms used in the Agreement
shall have the same meaning as in the Plan, and the Agreement shall be subject
to all of the terms of the Plan.

 

	 	
      10.2.
	
      Provisions
      of Agreement.

 

Each
Agreement shall contain such provisions that the Committee shall determine to be
necessary, desirable and appropriate for the Benefit granted which may include,
but not necessarily be limited to, the following with respect to any Benefit:
description of the type of Benefit; the Benefit’s duration; its transferability;
if an Option, the exercise price, the exercise period and the person or persons
who may exercise the Option; the effect upon such Benefit of the Participant’s
death, disability, changes of duties or termination of employment; the Benefit’s
conditions; when, if, and how any Benefit may be forfeited, converted into
another Benefit, modified, exchanged for another Benefit, or replaced; and the
restrictions on any Shares purchased or granted under the Plan.

 

10

 

	 	
      10.3.
	
      Transferability.

 

Unless
otherwise specified in an Agreement or permitted by the Committee, each Benefit
granted shall be not transferable other than by will or the laws of descent and
distribution and shall be exercisable during a Participant’s lifetime only by
him.

 

 

	
      11.
	
      REPLACEMENT
      AND TANDEM AWARDS

 

	 	
      11.1.
	
      Replacement.

 

The
Committee may permit a Participant to elect to surrender a Benefit in exchange
for a new Benefit.

 

	 	
      11.2.
	
      Tandem
      Awards.

 

Awards
may be granted by the Committee in tandem. However, no Benefit may be granted in
tandem with an ISO except SARs.

 

 

	
      12.
	
      PAYMENT,
      DIVIDENDS, DEFERRAL AND WITHHOLDING

 

	 	
      12.1.
	
      Payment.

 

Upon the
exercise of an Option or in the case of any other Benefit that requires a
payment by a Participant to the Company, the amount due the Company is to be
paid:

 

(a) in cash,
including by means of a so-called “cashless exercise” of an Option;

 

(b) by the
surrender of all or part of a Benefit (including the Benefit being
exercised);

 

(c) by the
tender to the Company of Shares owned by the optionee and registered in his name
having a Fair Market Value equal to the amount due to the Company;

 

(d) in other
property, rights and credits deemed acceptable by the Committee, including the
Participant’s promissory note; or

 

(e) by any
combination of the payment methods specified in (a), (b), (c) and (d)
above.

 

Notwithstanding,
the foregoing, any method of payment other than (a) may be used only with the
consent of the Committee or if and to the extent so provided in an Agreement.
The proceeds of the sale of Shares purchased pursuant to an Option and any
payment to the Company for other Benefits shall be added to the general funds of
the Company or to the Shares held in treasury, as the case may be, and used for
the corporate purposes of the Company as the Board shall determine.

 

11

 

	 	
      12.2.
	
      Dividend
      Equivalents.

 

Grants of
Benefits in Shares or Share equivalents may include dividend equivalent payments
or dividend credit rights.

 

	 	
      12.3.
	
      Deferral.

 

The right
to receive any Benefit under the Plan may, at the request of the Participant, be
deferred for such period and upon such terms as the Committee shall determine,
which may include crediting of interest on deferrals of cash and crediting of
dividends on deferrals denominated in Shares.

 

	 	
      12.4.
	
      Withholding.

 

The
Company may, at the time any distribution is made under the Plan, whether in
cash or in Shares, or at the time any Option is exercised, withhold from such
distribution or Shares issuable upon the exercise of an Option, any amount
necessary to satisfy federal, state and local income and/or other tax
withholding requirements with respect to such distribution or exercise of such
Options. The Committee or the Company may require a participant to tender to the
Company cash and/or Shares in the amount necessary to comply with any such
withholding requirements.

 

 

	
      13.
	
      OPTIONS

 

	 	
      13.1.
	
      Types
      of Options.

 

It is
intended that both ISOs and NQSOs, which may be Reload Options, may be granted
by the Committee under the Plan.

 

	 	
      13.2.
	
      Grant
      of ISOs and Option Price.

 

Each ISO
must be granted to an Employee and granted within ten years from the earlier of
the date of adoption by the Board or the Effective Date. The purchase price for
Shares under any ISO shall be no less than the Fair Market Value of the Shares
at the time the Option is granted.

 

	 	
      13.3.
	
      Other
      Requirements for ISOs.

 

The terms
of each Option which is intended to qualify as an ISO shall meet all
requirements of Section 422 of the Code.

 

12

 

	 	
      13.4.
	
      NQSOs.

 

The terms
of each NQSO shall provide that such Option will not be treated as an ISO. The
purchase price for Shares under any NQSO shall be no less than 85% of the Fair
Market Value of the Shares at the time the Option is granted.

 

	 	
      13.5.
	
      Determination
      by Committee.

 

Except as
otherwise provided in Section 13.2 through
Section 13.4, the
terms of all Options shall be determined by the Committee.

 

 

	
      14.
	
      SARS

 

	 	
      14.1.
	
      Grant
      and Payment.

 

The
Committee may grant SARs. Upon electing to receive payment of a SAR, a
Participant shall receive payment in cash, in Shares, or in any combination of
cash and Shares, as the Committee shall determine.

 

	 	
      14.2.
	
      Grant
      of Tandem Award.

 

The
Committee may grant SARs in tandem with an Option, in which case: the exercise
of the Option shall cause a correlative reduction in SARs standing to a
Participant’s credit which were granted in tandem with the Option; and the
payment of SARs shall cause a correlative reduction of the Shares under such
Option.

 

	 	
      14.3.
	
      ISO
      Tandem Award.

 

When SARs
are granted in tandem with an ISO, the SARs shall have such terms and conditions
as shall be required for the ISO to qualify as an ISO.

 

	 	
      14.4.
	
      Payment
      of Award.

 

SARs
shall be paid by the Company to a Participant, to the extent payment is elected
by the Participant (and is otherwise due and payable), as soon as practicable
after the date on which such election is made.

 

 

	
      15.
	
      ANNUAL
      LIMITATIONS

 

	 	
      15.1.
	
      Limitation
      on Options and SARs.

 

The
number of (a) Shares covered by Options where the purchase price is no less than
the Fair Market Value of the Shares on the date of grant plus (b) SARs which may
be granted to any Participant in any Fiscal Year shall not exceed
2,500,000.

 

13

 

	 	
      15.2.
	
      Computations.

 

For
purposes of Section 15.1, Shares
covered by an Option that is canceled shall count against the maximum, and, if
the exercise price under an Option is reduced, the transaction shall be treated
as a cancellation of the Option and a grant of a new Option; and SARs covered by
a grant of SARs that is canceled shall count against the maximum; and, if the
Fair Market Value of a Share on which the appreciation under a grant of SARs
will be calculated is reduced, the transaction will be treated as a cancellation
of the SARs and the grant of a new grant of SARs.

 

 

	
      16.
	
      RESTRICTED
      STOCK AND PERFORMANCE SHARES

 

	 	
      16.1.
	
      Restricted
      Stock.

 

The
Committee may grant Benefits in Shares available under Section 3 of the
Plan as Restricted Stock. Shares of Restricted Stock shall be issued and
delivered at the time of the grant or as otherwise determined by the Committee,
but shall be subject to forfeiture until provided otherwise in the applicable
Agreement or the Plan. Each certificate representing Shares of Restricted Stock
shall bear a legend referring to the Plan and the risk of forfeiture of the
Shares and stating that such Shares are nontransferable until all restrictions
have been satisfied and the legend has been removed. At the discretion of the
Committee, the grantee may or may not be entitled to full voting and dividend
rights with respect to all shares of Restricted Stock from the date of
grant.

 

	 	
      16.2.
	
      Cost
      of Restricted Stock.

 

Unless
otherwise determined by the Committee, grants of Shares of Restricted Stock
shall be made at a per Share cost to the Participant equal to par
value.

 

	 	
      16.3.
	
      Non-Transferability.

 

Shares of
Restricted Stock shall not be transferable until after the removal of the legend
with respect to such Shares.

 

	 	
      16.4.
	
      Performance
      Shares.

 

Performance
Shares are the right of an individual to whom a grant of such Shares is made to
receive Shares or cash equal to the Fair Market Value of such Shares at a future
date in accordance with the terms and conditions of such grant. The terms and
conditions shall be determined by the Committee, in its sole discretion, but
generally are expected to be based substantially upon the attainment of targeted
profit and/or performance objectives.

 

	 	
      16.5.
	
      Grant.

 

The
Committee may grant an award of Performance Shares. The number of Performance
Shares and the terms and conditions of the grant shall be set forth in the
applicable Agreement.

 

14

 

 

	
      17.
	
      CASH
      AWARDS

 

	 	
      17.1.
	
      Grant.

 

The
Committee may grant Cash Awards at such times and (subject to Section
17.2) in such
amounts as it deems appropriate.

 

	 	
      17.2.
	
      Rule
      16b-3.

 

The
amount of any Cash Award in any Fiscal Year to any Participant who is subject to
Section 16 of the
Exchange Act shall not exceed the greater of $100,000 or 100% of his cash
compensation (excluding any Cash Award under this Section 17) for
such Fiscal Year.

 

	 	
      17.3.
	
      Restrictions.

 

Cash
Awards may be subject or not subject to conditions (such as an investment
requirement), restricted or nonrestricted, vested or subject to forfeiture and
may be payable currently or in the future or both.

 

 

	
      18.
	
      OTHER
      STOCK BASED AWARDS AND OTHER BENEFITS

 

	 	
      18.1.
	
      Other
      Stock Based Awards.

 

The
Committee shall have the right to grant Other Stock Based Awards which may
include, without limitation, the grant of Shares based on certain conditions,
the payment of cash based on the performance of the Common Stock, and the grant
of securities convertible into Shares.

 

	 	
      18.2.
	
      Other
      Benefits.

 

The
Committee shall have the right to provide types of Benefits under the Plan in
addition to those specifically listed, if the Committee believes that such
Benefits would further the purposes for which the Plan was
established.

 

 

	
      19.
	
      MISCELLANEOUS
      PROVISIONS

 

	 	
      19.1.
	
      Underscored
      References.

 

The
underscored references contained in the Plan are included only for convenience,
and they shall not be construed as a part of the Plan or in any respect
affecting or modifying its provisions.

 

15

 

	 	
      19.2.
	
      Number
      and Gender.

 

The
masculine and neuter, wherever used in the Plan, shall refer to either the
masculine, neuter or feminine; and, unless the context otherwise requires, the
singular shall include the plural and the plural the singular.

 

	 	
      19.3.
	
      Unfunded
      Status of Plan.

 

The Plan
is intended to constitute an “unfunded” plan for incentive and deferred
compensation. With respect to any payments or deliveries of Shares not yet made
to a Participant by the Company, nothing contained herein shall give any rights
that are greater than those of a general creditor of the Company. The Committee
may authorize the creation of trusts or other arrangements to meet the
obligations created under the Plan to deliver Shares or payments hereunder
consistent with the foregoing.

 

	 	
      19.4.
	
      Termination
      of Employment.

 

If the
employment of a Participant by the Company terminates for any reason, except as
otherwise provided in an Agreement, all unexercised, deferred, and unpaid
Benefits may be exercisable or paid only in accordance with rules established by
the Committee, provided however if a Participant is an Employee and he or she is
“Terminated for Cause”, as defined hereinbelow, or violates any of the terms of
their employment after they have become vested in ant of their rights herein,
the Participant’s full interest in such rights shall terminate on the date of
such termination of employment and all rights thereunder shall cease. Whether a
Participant’s employment is Terminated for Cause shall be determined by the
Board. Cause shall include, but not be limited to gross negligence, willful
misconduct, flagrant or repeated violations of the Employer’s policies, rules or
ethics, a material breach by the Participant of any employment agreement between
the Participant and the Employer, intoxication, substance abuse, sexual or other
unlawful harassment, disclosure of confidential or proprietary information,
engaging in a business competitive with the Employer, or dishonest, illegal or
immoral conduct.

 

	 	
      19.5.
	
      Designation
      of Beneficiary.

 

A
Participant may file with the Committee a written designation of a beneficiary
or beneficiaries (subject to such limitations as to the classes and number of
beneficiaries and contingent beneficiaries as the Committee may from time to
time prescribe) to exercise, in the event of the death of the Participant, an
Option, or to receive, in such event, any Benefits. The Committee reserves the
right to review and approve beneficiary designations. A Participant may from
time to time revoke or change any such designation of beneficiary and any
designation of beneficiary under the Plan shall be controlling over any other
disposition, testamentary or otherwise; provided, however, that if the Committee
shall be in doubt as to the right of any such beneficiary to exercise any Option
or to receive any Benefit, the Committee may determine to recognize only an
exercise by the legal representative of the recipient, in which case the
Company, the Committee and the members thereof shall not be under any further
liability to anyone.

 

16

19.6. Governing
Law.

 

This Plan
shall be construed and administered in accordance with the laws of the State of
Delaware, without regard to any applicable conflicts of law. By accepting an
Option, the Employee irrevocably and unconditionally consents to submit to the
exclusive jurisdiction of the courts of the State of Florida or of the United
States of America, in each case located in Palm Beach County, Florida, for any
litigation arising out of or relating to this Plan (and agrees not to commence
any litigation relating thereto except in such courts). The Employee also
irrevocably and unconditionally waives any objection to the laying of venue of
any litigation arising out of or related to the Option or this Plan in the
courts of the State of Florida or of the United States of America, in each case
located in Palm Beach County, Florida, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim in any such court that
any such litigation brought in any such court has been brought in an
inconvenient forum.

 

	 	
      19.7.
	
      Purchase
      for Investment.

 

The
Committee may require each person purchasing Shares pursuant to an Option or
other award under the Plan to represent to and agree with the Company in writing
that such person is acquiring the Shares for investment and without a view to
distribution or resale. The certificates for such Shares may include any legend
which the Committee deems appropriate to reflect any restrictions on transfer.
All certificates for Shares delivered under the Plan shall be subject to such
stock-transfer orders and other restrictions as the Committee may deem advisable
under all applicable laws, rules and regulations, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
references to such restrictions.

 

	 	
      19.8.
	
      No
      Employment Contract.

 

Neither
the adoption of the Plan nor any Benefit granted hereunder shall confer upon any
Employee any right to continued employment nor shall the Plan or any Benefit
interfere in any way with the right of the Employer to terminate the employment
of any of its Employees at any time.

 

	 	
      19.9.
	
      No
      Effect on Other Benefits.

 

The
receipt of Benefits under the Plan shall have no effect on any benefits to which
a Participant may be entitled from the Employer, under another plan or
otherwise, or preclude a Participant from receiving any such
benefits.

 

 

17

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