Document:

Exhibit
10.1

 

OMNICELL
QUARTERLY EXECUTIVE BONUS PLAN

 

(FY 2005 –
Effective beginning Q2 2005)

 

OBJECTIVES: 

 

1) Drive earnings
predictability and backlog growth

 

2) Drive execution
of operating plan and strategic objectives

 

3) Motivate and
inspire employees to contribute at peak performance

 

ELIGIBILITY:
All employees at the Director level and above (including Section 16 executive
officers) who are employed full-time by Omnicell during an entire eligibility
period (fiscal quarter) are eligible for the Executive Bonus Plan. If an
individual is hired after the start of the relevant quarter, or is no longer
employed by Omnicell as of the last day of the relevant quarter, the employee
is not eligible to participate in the Quarterly Executive Bonus Plan (the
"Plan") for that quarter.

 

INCENTIVE
TARGET: The Incentive Target is stated as a percentage of
quarterly base salary.  50% of the total
Incentive Target is based on achievement of the quarterly Corporate Target (as
defined below), and 50% is based on achievement of the quarterly Individual
Targets.  The quarterly Corporate Target
must be achieved before any Individual Target (as defined below) bonus is paid,
but failure to achieve Individual Targets will not similarly affect payment of
the Corporate Target portion of the bonus. 
It is anticipated that the Incentive Target levels will range from 15%
to 40% of a participant's quarterly salary depending on his or her seniority
level.

 

PAYMENT
SCHEDULE: The Incentive Target is paid on a quarterly
basis typically in the first payroll period after the compensation committee of
the Board of Directors (the “Committee”) has determined that the Corporate
Target for a particular quarter was reached.

 

BONUS COMPONENTS:

 

Corporate
Target: The Corporate Target is driven by the corporate
profitability and sales backlog growth goals. 
Achievement of the Corporate Target requires 100% achievement of both
the EPS Target and Backlog Target as set forth below.

 

• EPS Target – The profitability portion of the Corporate
Target is achieved if the company meets the quarterly profitability threshold
target set by the Committee. There is an upside payment potential of an
additional 10% of each individual’s total bonus amount for achievement of each
incremental profitability metric above the threshold target as set by the
Committee.

 

• Backlog Target – The backlog growth portion of the
Corporate Target is achieved by meeting the backlog threshold target set by the
Committee.

 

 

Individual
Target: The Individual Target is based on achievement of
goals tied to the corporate operating plan and strategic objectives. Achievement
of the Individual Target requires 100% achievement of both the Budget Target
and MBO Target as set forth below:

 

• Budget Target – The budget goal of the Individual Target
is achieved by the individual meeting the individual budget (or equivalent
target for individuals that do not control a budget metric) targets set by
management.

 

• MBO Target - The operating and strategic goals of the
Individual Target are achieved by meeting the quarterly individual objectives
set by the individual’s manager.

 

End of
year make up bonus:  If
the EPS Target is achieved for any quarter during the fiscal year but the
Backlog Target for that quarter is missed, then that quarter’s Corporate Target
bonus can be earned at the end of that fiscal year if the fourth quarter
Backlog Target is achieved.   In that
circumstance, the Individual Target bonus for each made up quarter will also be
paid if the individual achieved his or her Individual Targets during that
quarter.

 

DIRECTION AND ADMINISTRATION:

 

•  CEO may adjust the
percentage weightings within the plan to redirect behavior based on changes in
the economy, immediate needs of the company, changes in long-term strategies
and individual career growth and development throughout the fiscal year.

 

•  Participation in the
Plan is at the discretion of Company management. The Company reserves the right
to make changes to the Plan at any time. The Committee may alter the incentive
payout based on achievement of publicly announced targets, product milestones,
strategic goals, cross functional teamwork and collaboration, and unforeseen
changes in the economy and/or geopolitical climate.Exhibit
10.1

 

Annual
Incentive Cash Bonus Plan Outline

 

 

The
Annual Incentive Cash Bonus Plan for 2005 is based upon the following metrics
in the percentages indicated:

 

	
  Revenue

  	
   

  	
  50

  	
  %

  
	
  EBITDA

  	
   

  	
  0

  	
  %

  
	
  Operating Income

  	
   

  	
  20

  	
  %

  
	
  Cash

  	
   

  	
  20

  	
  %

  
	
  Management/Board Disc

  	
   

  	
  10

  	
  %

  

 

Bonuses,
if earned, based upon the established targets, would be paid at levels between
a Minimum Performance level and a Maximum Performance level.  Set forth below is the bonus award matrix,
with percentages reflecting a percentage of the executives’ salary:

 

	
   

  	
   

  	
  CEO

  	
   

  	
  Senior Execs

  	
   

  	
  Execs

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minimum

  	
   

  	
  50

  	
  %

  	
  30

  	
  %

  	
  15

  	
  %

  
	
  Target

  	
   

  	
  100

  	
  %

  	
  60

  	
  %

  	
  30

  	
  %

  
	
  Maximum

  	
   

  	
  200

  	
  %

  	
  120

  	
  %

  	
  60

  	
  %Exhibit 10.2

 

AMENDED AND RESTATED DIGITAL
ANGEL CORPORATION TRANSITION STOCK OPTION PLAN

 

NON-STATUTORY STOCK OPTION
AGREEMENT

	
   

  
	
   

  
	
  OPTIONEE:

  
	
  GRANT DATE:

  
	
  NUMBER OF OPTION SHARES:

  
	
  EXERCISE PRICE PER SHARE:

  
	
  EXPIRATION DATE:

  
	
   

  

 

 

                                THIS
AGREEMENT is made
as of the Grant Date set forth above by and between Digital Angel Corporation,
a Delaware corporation (the “Company”), and the Optionee named above, who
provides services to the Company or an Affiliate of the Company as an Employee
or a Director (the “Optionee”).

 

                                The
Company desires, by affording the Optionee an opportunity to purchase shares of
its Common Stock, par value $0.005 per share (the “Common Stock”), as
hereinafter provided, to carry out the purpose of the Amended and Restated
Digital Angel Corporation Stock Option Plan (the “Option Plan”).

 

                                NOW,
THEREFORE, in
consideration of the mutual cove­nants hereinafter set forth, and for other
good and valuable consideration, the parties hereby agree as follows:

 

1.             Grant of Option. 
The Company hereby grants to the Optionee the right and option (the “Option”)
to purchase all or any part of the aggregate number of shares of Common Stock
set forth above (the “Option Shares”) (such number being subject to adjustment
as provided in Section 9 hereof) on the terms and subject to the conditions set
forth in this Agreement.  This Option is
not intended to be an “incentive stock option” within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended (the “Code”).

2.             Purchase Price. 
The per share purchase price of the Option Shares shall be the Exercise
Price Per Share set forth above (such Exercise Price Per Share being subject to
adjustment as provided in Section 9 hereof).

3.             Term and Exercise of Option.

(a)           The
term of this Option shall commence on the Grant Date set forth above and shall
continue until the Expiration Date set forth above, unless earlier terminated
as provided herein.

(b)           This
Option will become exercisable as to 33-1/3%
of the Option Shares

 

 

 

on each anniversary of the grant date,
but only if the Optionee is an Employee of the Company on each of such dates.

(c)           To
exercise this Option, the Optionee shall give written notice to the Company, to
the attention of its President or other designated agent, in substantially the
form attached hereto as Exhibit A, and the Optionee shall deliver
payment in full for the Option Shares with respect to which this Option is then
being exercised, as provided in Section 4(a) below.

(d)           Neither
the Optionee nor the Optionee’s legal representatives, legatees or
distributees, as the case may be, will be, or will be deemed to be, a holder of
any Option Shares for any purpose unless and until certificates for such Option
Shares are issued to the Optionee or the Optionee’s legal representatives,
legatees or distributees under the terms of the Option Plan.

4.             Limitations on Exercise of Option.

(a)           The
exercise of this Option will be contingent upon receipt from the Optionee (or
the purchaser acting under Section 7 below) of the full Exercise Price of
such Option Shares.  Payment of the
Exercise Price shall be made in cash or by a certified or cashier’s check.  However, in its sole discretion, the
Committee may accept in payment of the Exercise Price (i) shares of Common
Stock of the Company or shares issuable upon the exercise of this Option having
an aggregate Fair Market Value on the date of exercise which is not less than
the total Exercise Price; (ii) other property, rights, or credits deemed
acceptable by the Committee, including the Optionee’s promissory note; or (iii)
any combination of cash, such shares of Common Stock, and such other property,
rights or credits as determined by the Committee.  No Option Shares will be issued until full
payment therefor has been made and the Optionee has executed any and all
agreements that the Company may require the Optionee to execute.

(b)           The
issuance of Option Shares upon the exercise of this Option shall be subject to
all applicable laws, rules, and 
regulations.  If, in the opinion
of the Committee, (i) the listing, registration, or qualification of the
Option Shares upon any securities exchange or under any state or federal law,
(ii) the consent or approval of any regulatory body, or (iii) an
agreement of the Optionee with respect to the disposition of the Option Shares,
is necessary or desirable as a condition to the issuance or sale of the Option
Shares, this Option shall not be exercised and/or Option Shares shall not be
sold unless and until such listing, registration, qualification, consent, approval
or agreement is effected or obtained in form satisfactory to the Committee.

5.             Nontransferability of Option. 
This Option shall not be transferable by the Optionee other than by will
or the laws of descent and distribution, and during the lifetime of the
Optionee, this Option shall be exercisable only by the Optionee.

6.             Termination of Employment or Other
Services.  Unless
otherwise determined in the sole discretion of the Committee, upon termination of the Optionee’s
employment or other relationship with the Company or with an Affiliate other
than as a result of the death of the

 

 

2

 

Optionee, the Optionee
may, for a period of thirty (30) calendar days after the effective date of such
termination, but in no case later than the Expiration Date set forth above,
exercise the Option to the extent it was exercisable as of the effective date
of such termination of employment. 
However, any portion of this Option that is not exercisable as of the
effective date of such termination of employment shall terminate and be
immediately forfeited, whether or not exercisable, and neither the Optionee nor
the Optionee’s heirs, personal representatives, successors or assigns shall
have any future rights with respect to such portion of this Option.

7.             Death of Optionee. 
Unless otherwise determined in the sole discretion of the Committee, if
the Optionee dies while employed by or otherwise providing services to the
Company or an Affiliate, this Option may be exercised to the same extent that
the Optionee would have been entitled to exercise it at the date of death and
may be exercised within a period of one (1) year after the date of death, but
in no case later than the Expiration Date set forth above.  In such event, this Option shall be
exercisable only by the executors or administrators of the Optionee or by the
person or persons to whom the Optionee’s rights under the Option shall pass by
the Optionee’s will or the laws of descent and distribution.  Any portion of an Option that is not
exercisable at the time of an Optionee’s death shall automatically terminate.

8.             No Right to Continue to Provide
Services.  This Option does not and will not confer upon
the Optionee any right to continue providing services to the Company or an
Affiliate of the Company as an Employee or a Director, nor will it affect or
interfere in any way with the Company’s right or the Affiliate’s right to
terminate the Optionee’s employment or other services at any time.

9.             Adjustments. 
In the event of any change in the outstanding shares of Common Stock by
reason of any stock dividend, stock split, reverse stock split,
reclassification, combination, exchange of shares, or other similar
recapitalization of the Company, the Committee shall make an appropriate and
proportionate adjustment to the number of Option Shares and the per share
Exercise Price Per Share hereunder so that the Optionee then shall receive for
the aggregate Exercise Price paid by the Optionee upon exercise of this Option
the number of shares the Optionee would have received if this Option had been
exercised before such recapitalization event occurred.  No adjustment shall be made under this
Section 10 upon the issuance by the Company of any warrants, rights, or options
to acquire additional Common Stock or of securities convertible into Common
Stock unless such warrants, rights, options or convertible securities are
issued to all shareholders of the Company on a proportionate basis.

10.          Change of Control.  In the event of a Change in
Control, this Option shall immediately become fully exercisable.

11.          Limitation
on Payments and Benefits. 
Notwithstanding anything in this Agreement to the contrary, if any of
the payments or benefits to be made or provided in connection with this
Agreement, together with any other payments, benefits or awards which the
Optionee has the right to receive from the Company, or any corporation which is
a member of an “affiliated group” (as defined in Section 1504(a) of the Code
without regard to Section 1504(b) of the Code) of which the Company is a member
(“Affiliate”), constitute an “excess parachute payment” (as defined in Section
280G(b) of the Code), such payments, benefits or awards to be made or provided
in connection with this Agreement, or any other agreement between the Optionee
and the Company or

 

3

 

its
Affiliates, may be reduced, eliminated, modified or waived to the extent
necessary to prevent all, or any portion, of such payments, benefits or awards
from becoming “excess parachute payments” and therefore subject to the excise
tax imposed under Section 4999 of the Code. 
The Optionee will have the sole right and discretion to determine
whether the payments, benefits or awards to be made or provided in connection
with this Agreement, or any other agreement between the Optionee and the
Company, should be reduced, and whether or not such other agreement with the
Company or an Affiliate expressly addresses the potential application of
Section 280G or Section 4999 of the Code (including, without limitation, that “payments”
under such agreement be reduced).  The
Optionee will also have the right to designate the particular payments,
benefits or awards that are to be reduced, eliminated, modified or waived;
provided that no such adjustment will be made if it results in additional
expense to the Company in excess of expenses the Company would have experienced
if no adjustment had been made.  The
determination as to whether any such decrease in the payments or benefits is
necessary must be made in good faith by legal counsel or a certified public
accountant selected by the Optionee and reasonably acceptable to the Company,
and such determination will be conclusive and binding upon the Optionee and the
Company.  Unless otherwise determined in
the sole discretion of the Committee, the Optionee shall pay any and all fees,
costs and expenses of the counsel or accountant selected by the Optionee to
make the determinations under this Section 12.

12.          Interpretation.  The interpretation and
construction of any provision of the Option Plan and this Option shall be made
by the Committee and shall be final, conclusive and binding on the Optionee and
all other persons.

13.          Definitions; Option Plan Governs.  Any
capitalized term used herein that is not expressly defined herein shall have
the meaning ascribed to it in the Option Plan. 
This Option is in all respects subject to and governed by all of the
provisions of the Option Plan.

 

(The remainder of
this page was intentionally left blank.)

 

4

 

[Signature Page to Non-Statutory Stock Option
Agreement]

 

 

                                IN
WITNESS WHEREOF,
the Company has caused this Agreement to be executed in its corporate name by
its duly authorized officer, and the Optionee has executed this Agreement as of
the Grant Date set forth above.

 

	
  COMPANY:

  	
  Digital Angel
  Corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Kevin N. McGrath

  
	
   

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
  OPTIONEE:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name Typed or
  Printed

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SSN:

  	
            -        -             

  	
   

  
					

 

 

5

 

EXHIBIT A

NOTICE OF EXERCISE OF

STOCK OPTION

 

TO:

 

FROM:

 

DATE:

 

RE:                          Exercise
of Stock Option

 

                I hereby exercise
my option to purchase                    
shares of Common Stock at $           
per share (total exercise price of $                   ).  This notice is given in accordance with the
terms of my Non-Statutory Stock Option Agreement (“Agreement”) dated                                 .  The option price and vested amount is in
accordance with Sections 2 and 3 of the Agreement.

 

Check one or more, as applicable:

 

o                                    Enclosed is cash, or a cashier’s or
certified check payable to Digital Angel Corporation (the “Company”) for the
total exercise price of the shares being purchased.

 

o                                    Attached is a certificate(s) for                                 
shares of common stock duly endorsed in blank and surrendered for the exercise
price of the shares being purchased.*

 

o                                    I want to exercise my option by surrendering
a sufficient number of shares of Common Stock issuable upon exercise of such
option to pay the exercise price.*

 

o                                    I want to exercise my option by issuing
to the Company my promissory note in the amount of $        
and/or by transferring to the Company the following property, rights or other
benefits:                                                                                                         .*

 

                                                *The use of each of these alternatives is
subject to the approval of the Company.

 

                Please prepare the
stock certificate in the following name(s):

 

	
  Sincerely,

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (Signature)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (Print or Type
  Name)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Letter and
  consideration

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  received on                             

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (effective date
  of exercise)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

6

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