Document:

Exhibit 10.2

    
      
        

      

      Exhibit
        10.2

      

      

      AGREEMENT

      

      THIS
        AGREEMENT
        (the
“Agreement”) is made
        this       5      day
        of December, 2006 by and between the parties to this Agreement (hereinafter
        individually referred to as a “Party” and collectively referred to as the
“Parties”), APPLIED
        DIGITAL SOLUTIONS, INC.,
        a Missouri
        Business Corporation (hereinafter referred to as “ADS”), and SCOTT
        R. SILVERMAN (hereinafter
        referred to as “Executive”). 

       

      WHEREAS,
        the
        Parties entered into the Applied Digital Solutions, Inc. Employment and
        Non-Compete Agreement dated April 8, 2004 (the “ADS Agreement”);
        and

       

      WHEREAS,
        ADS
        desires the Executive to focus his efforts exclusively on ADS’s VeriChip
        subsidiary by becoming that company’s CEO; and

       

      WHEREAS,
        ADS desires to replace the ADS Agreement because under the ADS Agreement,
        if ADS
        assigned the Executive to responsibilities solely for VeriChip Corp, it could
        be
        deemed a constructive termination entitling the Executive to approximately
        Three
        Million Three Hundred Thousand ($3,300,000.00) Dollars in cash, and would
        allow
        the Executive to resign (neither of which is desired by ADS); and

       

      WHEREAS,
        ADS prefers to enter into an agreement, and Executive is prepared to enter
        into
        an agreement, that motivates Executive to accept the position desired for
        him by
        ADS, that motivates him to remain at that position and motivates him to improve
        the value of ADS; and

       

      WHEREAS,
        contemporaneous with the execution of this Agreement, Executive and VeriChip
        Corp shall enter into the VeriChip Corp Employment and Non-Compete Agreement
        in
        substantially the form attached hereto as Exhibit “A,” the terms of which are
        incorporated by this reference (the “VeriChip Agreement”).

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      NOW
        THEREFORE,
        in
        consideration of the promises and the mutual obligations set forth in this
        Agreement, the Parties agree as follows:

       

      
        	 	
                (1)

              	
                Termination
                  of the ADS Agreement.

              

      

       

      (a)    Effective
        upon the execution of this Agreement, the ADS Agreement shall be null and
        void
        and of no further force and effect. In consideration for Executive waiving
        all
        of his rights pursuant to the ADS Agreement including, without limitation,
        all
        benefits resulting from a constructive termination of employment, Executive
        shall receive Three Million Three Hundred Thousand ($3,300,000.00) Dollars
        in
        cash payable within one hundred and twenty (120) days of the date of this
        Agreement (the “Cash Consideration”). In lieu of paying the Cash Consideration,
        ADS may, in its sole discretion, elect to transfer to Executive common stock
        in
        ADS that has a value of Three Million Three Hundred Thousand ($3,300,000.00)
        Dollars (the “Stock”). ADS may elect to pay the amount referred to herein in
        Stock at any time during the one hundred and twenty (120) day period. If
        Executive remains on the Board of Directors of ADS at that time, or if there
        is
        some other reason shareholder approval might be necessary to permit the issuance
        of the Stock, then ADS shall have one hundred and twenty (120) additional
        days
        from the date of such election to obtain such shareholder approval. If it
        does
        not obtain shareholder approval in such timeframe, ADS shall forfeit its
        election to pay the amount in Stock and shall pay the Cash Consideration.
        The
        Stock shall be subject to a substantial risk of forfeiture in the event that
        Executive voluntarily resigns as the Chairman and the Chief Executive Officer
        of
        VeriChip Corp on or before December 31, 2008, or in the event that VeriChip
        Corp terminates the VeriChip Agreement for cause in accordance with Section
        3(e)
        of the VeriChip Agreement on or before December 31, 2008. 

      
        
          
          

        

        
          -2-

          
            

          

        

        
          
          

        

      

      (b)    The
        Stock
        shall be registered as soon as practicable, which is anticipated to be
        approximately six (6) months from the date of issuance of the Stock. The
        Stock
        will be issued based on the average closing price of one (1) share of common
        stock of ADS for the ten (10) trading days preceding the day ADS elects to
        pay
        in Stock. The Stock will be price protected through the date on which the
        registration statement becomes effective, or the date in which the Stock
        should
        become eligible for trading, if later, such that if the value of the Stock
        is
        then less than Three Million Three Hundred Thousand ($3,300,000.00) Dollars,
        additional shares in ADS will be issued to Executive to subsidize any
        shortfall.

       

      
        	 	
                (2)

              	
                Miscellaneous.

              

      

       

      (a)    The
        invalidity or unenforceability of any particular provision of this Agreement
        shall not affect the other provisions hereof, and this Agreement shall be
        construed in all respects as those such invalid or unenforceable provisions
        were
        omitted.

       

      (b)    This
        Agreement shall inure to the benefit of and be binding upon ADS, its successors
        and assigns, and Executive.

       

      (c)    The
        terms
        and provisions of this Agreement may not be modified except by a written
        instrument duly executed by the Parties.

       

      (d)    This
        Agreement supersedes all other oral and written agreements between the Parties
        with respect to the matters contained in this Agreement and, except as otherwise
        provided herein, this Agreement contains all of the covenants and agreements
        between the Parties with respect to those matters.

      
        
          
          

        

        
          -3-

          
            

          

        

        
          
          

        

      

      (e)    This
        Agreement shall be governed by and construed in accordance with the laws
        of the
        State of Florida. The Parties hereby consent and submit to the jurisdiction
        and
        venue of any state or federal court within the State of Florida, Palm Beach
        County in any matter arising out of this Agreement.

       

      (f)    This
        Agreement may be executed in two or more counterparts either by facsimile
        or
        otherwise, each of which shall be deemed an original, but all of which together
        shall constitute one and the same instrument.

       

      IN
        WITNESS WHEREOF,
        the
        Parties hereto have set their hands and seals as of the date set forth on
        the
        first page of this Agreement.

       

      
        	
                ATTEST:

              	 	
                APPLIED
                  DIGITAL SOLUTIONS, INC. 

              
	 	 	 	 
	 	 	 	 
	 /s/
                Kay E. Langsford	 	
                By:

              	 /s/
                Evan C. McKeoun

      

      
        	
                Secretary  

              	 	 	 CFO,
                Senior
                Vice President 

      

      

      
        	
                WITNESS:

              	 	 
	 	 	 
	 /s/
                Michael J.
                Feder                                                   
                12/5/06	 	 /s/
                Scott Silverman
	 	 	
                SCOTT
                  R. SILVERMAN

              

      

      
        
          
          

        

        
          -4-

          
            

          

        

        
          
          

        

      

      EXHIBIT
        “A”

       

      
        VERICHIP
          CORP

        EMPLOYMENT
          AND NON-COMPETE AGREEMENT

        

        AGREEMENT
          made
          this    5    day
          of     December    , 2006 (the
“Effective Date”), by and between the parties to this Agreement (hereinafter
          individually referred to as “Party” and collectively referred to as “Parties”),
VERICHIP
          CORP,
          a Delaware
          Business Corporation (hereinafter referred to as “VeriChip”), and SCOTT
          R. SILVERMAN (hereinafter
          referred to as “Executive”). 

         

        WHEREAS,
          VeriChip is a leader in RFID technology for people, particularly in the
          healthcare area (the “Business”); and

         

        WHEREAS,
          the
          Business includes VeriChip’s VeriMed business, for which Executive has
          contributed meaningfully in his capacity as CEO of Applied Digital Solutions,
          Inc., (“ADS”); and

         

        WHEREAS,
          VeriChip finds it is in its best interest to enhance Executive’s contribution to
          the Business, to protect its technologies and business relationships, and
          to
          engage Executive’s services as Chairman and Chief Executive Officer of VeriChip;
          and

         

        WHEREAS,
          Executive is willing to assume the fulltime role as VeriChip’s Chief Executive
          Officer;

         

        NOW
          THEREFORE,
          in
          consideration of the promises and the mutual obligations set forth
          in
          this Agreement, the Parties agree as follows:

         

        1.    Employment.
          VeriChip agrees to employ Executive, and Executive agrees to accept such
          employment by VeriChip, pursuant to the terms and conditions set forth
          in this
          Agreement.

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

        2.    Position
          and Responsibilities.
          During
          the term of this Agreement, as defined below, Executive shall serve as
          Chairman
          and Chief Executive Officer of VeriChip and will perform such duties and
          exercise such supervision with regard to the business of VeriChip as are
          associated with such positions, as well as such additional duties as may
          be
          prescribed from time to time by VeriChip’s Board of Directors. Executive agrees
          to render services to the best of Executive’s ability for and on behalf of
          VeriChip. Executive agrees to devote his full business time to rendering
          such
          services on behalf of VeriChip. 

         

        3.    Term.
          Except
          as otherwise provided in this Section 3 or Section 8(c) of this Agreement,
          the
          term of this Agreement (the “Term”) shall commence on the Effective Date and
          shall continue in force thereafter for a period of five (5) years from
          the
          Effective Date. Notwithstanding the foregoing, upon the happening of any
          of the
          following events, this Agreement shall terminate (unless otherwise provided
          herein for a termination after a period of time) and Executive shall cease
          to be
          an employee of VeriChip:

         

        
          	 	
                  (a)

                	
                  Executive’s
                    resignation upon sixty (60) days advance written
                    notice;

                

        

         

        
          	 	
                  (b)

                	
                  Executive’s
                    Total Disability upon VeriChip’s election. For purposes of this Agreement,
                    “Total Disability” shall be defined as Executive’s inability, due to
                    illness, accident or any other physical or mental incapacity,
                    to perform
                    Executive’s usual responsibilities performed by Executive for VeriChip
                    prior to the onset of such disability, for one hundred eighty
                    (180)
                    consecutive days during the Term. VeriChip may elect, by written
                    notice to
                    Executive, within thirty (30) days of the end of such period
                    of Total
                    Disability defined above, to terminate Executive’s employment
                    herein;

                

        

        
          
            
            

          

          
            -2-

            
              

            

          

          
            
            

          

        

        
          	 	
                  (c)

                	
                  the
                    death of Executive; 

                

        

         

        
          	 	
                  (d)

                	
                  Executive’s
                    Constructive Termination. For purposes of this Agreement, “Constructive
                    Termination” shall be defined as a material breach by VeriChip of its
                    obligations under this Agreement (including but not limited to
                    any
                    reduction of Executive’s Base Salary or incentive compensation as provided
                    herein). If Executive chooses to treat such material breach as
                    a
                    Constructive Termination, Executive shall provide VeriChip with
                    written
                    notice describing the circumstances being relied upon by Executive
                    for
                    such termination with respect to this Agreement within thirty
                    (30) days
                    after the event giving rise to the Constructive Termination.
                    VeriChip
                    shall have thirty (30) days after receipt of such notice to remedy
                    the
                    situation prior to the Constructive Termination being deemed
                    final; or
                    

                

        

         

        
          	 	
                  (e)

                	
                  VeriChip
                    terminates this Agreement for cause, with said cause being defined
                    as a
                    conviction of a felony or Executive’s being prevented from providing
                    services hereunder as a result of Executive’s violation of any law,
                    regulation and/or rule.

                

        

         

        
          	 	
                  (f)

                	
                  Nothing
                    in this Agreement is intended to limit the rights of VeriChip
                    to terminate
                    this Agreement under applicable bankruptcy laws in the event
                    that VeriChip
                    files for protection under the United States Bankruptcy
                    Code.

                

        

        
          
            
            

          

          
            -3-

            
              

            

          

          
            
            

          

        

        4.    Annual
          Compensation.
          (a) During
          the Term, Executive shall be entitled to compensation for all services
          performed
          by Executive pursuant to this Agreement (“Compensation”) as
          follows:

         

        
          	 	
                  (1)

                	
                  Executive
                    shall be entitled to a base salary (the “Base Salary”) of FOUR HUNDRED
                    TWENTY THOUSAND ($420,000.00) DOLLARS for the 2007 calendar year,
                    payable
                    according to the customary payroll practices of VeriChip for
                    the then
                    current period. The Base Salary shall increase a minimum of ten
                    percent
                    (10%) per annum during each of the first two (2) years of the
                    Term.
                    Thereafter, the Base Salary may be increased (but not decreased)
                    in the
                    reasonable discretion of VeriChip. The “Base Salary” shall, for all
                    purposes of this Agreement, mean the Base Salary then being paid
                    by
                    VeriChip to Executive.

                

        

         

        
          	 	
                  (2)

                	
                  During
                    the Term, Executive shall be eligible for incentive bonus compensation
                    for
                    each calendar year, to be reasonably determined by the Board
                    of Directors
                    of VeriChip, which shall consider bonuses paid by similarly situated
                    employers to similarly situated
                    employees.

                

        

         

        (b)   VeriChip
          shall deduct from the Compensation all taxes and other deductions which
          are
          required to be deducted or withheld under any provision of any federal,
          state,
          or local law now in effect or which may become effective at any time during
          the
          term of this Agreement.

        
          
            
            

          

          
            -4-

            
              

            

          

          
            
            

          

        

        5.    Fringe
          Benefits.
          During
          the
          Term, Executive shall be entitled to all fringe benefits (the “Fringe Benefits”)
          provided to senior executive employees of VeriChip, as reasonably determined
          by
          the Board of Directors of VeriChip. The Fringe Benefits shall specifically
          include executive health benefits which shall entitle Executive to full
          reimbursement for all physical examinations and other related services,
          use of
          an automobile leased by VeriChip for use by Executive, as well as the payment
          by
          VeriChip of all applicable annual membership dues relating to the Ocean
          Reef
          Yacht Club. In
          addition, VeriChip shall utilize its commercially reasonable efforts to
          obtain
          and maintain, at its sole cost and expense, disability insurance coverage
          that
          shall provide Executive with up to TWENTY-TWO THOUSAND SEVEN HUNDRED FIFTY
          ($22,750.00) DOLLARS in monthly salary continuation payments, subject to
          applicable limitation periods and the availability of such coverage, in
          the
          event of the disability of Executive.

         

        6.    Business
          and Other Expenses.
          VeriChip will reimburse Executive for all reasonable travel, entertainment
          and
          other expenses incurred by Executive in connection with the performance
          of his
          duties and obligations under this Agreement. Executive will comply with
          all
          reasonable reporting requirements with respect to business expenses as
          may be
          established by VeriChip from time to time. In addition, VeriChip shall
          pay to
          Executive FORTY-FIVE THOUSAND ($45,000.00) DOLLARS per year during the
          Term,
          payable in TWENTY-TWO THOUSAND FIVE HUNDRED ($22,500.00) DOLLAR installments
          on
          or before January 15 and July 15, representing non-allocable expenses
          that shall be deemed additional compensation to Executive.

         

        7.    Additional
          Benefits.
          (a)
          Executive will be entitled to participate in all other compensation or
          employee
          benefit plans or programs and receive all benefits for which salaried employees
          of VeriChip generally are eligible under any plan or program now or later
          established by VeriChip on the same basis as similarly situated senior
          executives of VeriChip. Executive will participate to the extent permissible
          under the terms and provisions of such plans or programs, in accordance
          with
          program provisions.

        
          
            
            

          

          
            -5-

            
              

            

          

          
            
            

          

        

        (b)   Upon
          the
          execution of this Agreement, VeriChip shall, after giving effect to the
          contemplated three for one reverse stock split, issue 500,000 shares (the
          “Shares”) of restricted stock in VeriChip to Executive. The Shares will be
          registered as soon as practicable, which is anticipated to be approximately
          six
          (6) months from the date of issuance of the Shares. The Shares shall be
          subject
          to a substantial risk of forfeiture in the event that this Agreement is
          terminated on or before December 31, 2008 pursuant to subparagraphs (a)
          or (e)
          of Section 3 of this Agreement in which event the Shares shall immediately
          be
          forfeited.

         

        8.    Payment
          Upon Termination of Agreement.
          (a) In
          the event this Agreement is terminated by Executive’s resignation pursuant to
          subparagraph (a) or (e) of Section 3 of this Agreement, VeriChip will pay
          to
          Executive any and all earned but unpaid Base Salary and earned but unpaid
          incentive bonus compensation as of the date of termination. VeriChip shall
          pay
          such amounts due Executive within thirty (30) days of Executive’s last day of
          service. In addition, VeriChip shall pay to Executive fifty (50%) percent
          of the
          Base Salary for a period of two (2) years commencing from the date of
          Termination. In addition, any outstanding stock options held by Executive
          on
          Executive’s last day of service shall remain exercisable for the life of the
          option. Further, Executive may, at his sole option, assume all obligations
          for
          the leased vehicle then used by Executive, which vehicle is being leased
          by
          VeriChip for use by Executive.

        
          
            
            

          

          
            -6-

            
              

            

          

          
            
            

          

        

        (b)   In
          the
          event this Agreement is terminated pursuant to any of subparagraphs (b)
          through
          (d) of Section 3 of this Agreement, or if VeriChip terminates this Agreement
          without cause, VeriChip will, in addition to maintaining the Fringe Benefits
          through December 31, 2011, pay to Executive the sum of (i) any and all
          earned
          but unpaid Base Salary and earned but unpaid incentive bonus compensation
          as of
          the date of termination; (ii) the greater of (A) the Base Salary from the
          date
          of termination through December 31, 2011, or (B) two (2) times the Base
          Salary;
          and (iii) the average bonus paid by VeriChip to Executive for the three
          (3) full
          calendar years immediately prior to the date of termination, or fifty (50%)
          percent of the bonus paid by ADS to Executive in 2006 if the termination
          occurs
          in 2007, or seventy-five (75%) percent of the bonus paid by VeriChip to
          Executive in 2007 if the termination occurs in 2008, which amount shall
          be
          interpolated from the date of termination through December 31, 2011. All
          amounts set forth in this subparagraph (b) may be paid in either cash or
          in
          stock of VeriChip within sixty (60) days of Executive’s last day of service;
          provided, however, to the extent that Executive, in his sole option, does
          not
          desire to receive stock of VeriChip, then and in that event, he shall so
          notify
          VeriChip in which event VeriChip shall pay fifty (50%) percent of the amounts
          set forth in this subparagraph (b) in cash within sixty (60) days of Executive’s
          last day of service, with the remaining amounts to be paid within one hundred
          eighty (180) days of Executive’s last day of service; provided, further, that
          VeriChip shall continue to pay to Executive the Base Salary for one hundred
          eighty (180) days from Executive’s last day of service, which payments shall be
          credited to VeriChip against the amount due from VeriChip to Executive
          as set
          forth in this subparagraph (b). In addition, any outstanding stock options
          held
          by Executive on Executive’s last day of service pursuant to such termination
          shall become vested and exercisable as of such date of termination, and
          will
          remain exercisable for the life of the option. Further, VeriChip shall
          continue
          to pay all lease payments on the vehicle then used by Executive, which
          vehicle
          is being leased by VeriChip for use by Executive. In addition, VeriChip
          shall
          maintain Executive on its group medical plan on the same conditions as
          if he
          were to remain employed by VeriChip, until Executive is eligible to be
          covered
          under another comparable group medical plan.

        
          
            
            

          

          
            -7-

            
              

            

          

          
            
            

          

        

        (c)   (i)    To
          the
          extent that during the Term there shall be Change in Control, as hereinafter
          defined, notwithstanding any term to the contrary in this Agreement, this
          Agreement shall terminate in which event, the Executive shall be entitled
          to
          receive the Change in Control Compensation, as hereafter defined.

         

        (ii)   For
          all
          purposes of this Agreement, a Change in Control shall be deemed to occur
          if any
          person or entity (or persons or entities acting as a group) acquires stock
          of
          VeriChip that, together with stock then held by such person, entity or
          group,
          results in such person, entity or group holding more than fifty (50%) percent
          of
          the fair market value or total voting power of VeriChip as well as the
          board of
          director members prior to the transaction no longer constituting a majority
          of
          the board of director members following such transaction. Notwithstanding
          the
          foregoing, the following shall not be deemed a Change in Control: (1) the
          acquisition of stock by ADS or its affiliates; (2) a public offering or
          sale to
          the public of VeriChip’s stock; (3) a merger with another company, unless such
          merger also results in the board of director members prior to such transaction
          not constituting a majority of the board members following such
          transaction.

         

        (iii)   For
          all
          purposes of this Agreement, the Term Change in Control Compensation shall
          mean
          the sum of (A) any and all earned but unpaid Base Salary and earned but
          unpaid
          bonus compensation as of the date of the Change in Control; (B) five (5)
          times
          the Base Salary; and (C) five (5) times the average bonus paid by VeriChip
          to
          Executive for the three (3) full calendar years immediately prior to the
          Change
          in Control, or the number of calendar years that were completed commencing
          on
          the Effective Date and ending on the Change in Control if less than three
          (3)
          calendar years. The Change in Control Compensation shall be paid to Executive
          within ten (10) days of the Change in Control. In addition, any outstanding
          stock options held by Executive as of the Change in Control shall become
          vested
          and exercisable as of such date, and shall remain exercisable as of the
          life of
          the option. Further, VeriChip shall continue to pay all lease payments
          on the
          vehicle then used by Executive, which vehicle is being leased by VeriChip
          for
          use by Executive.

        
          
            
            

          

          
            -8-

            
              

            

          

          
            
            

          

        

        9.    Confidential
          Information.
          (a)
          Executive recognizes and acknowledges that all information pertaining to
          this
          Agreement or to the affairs; business; results of operations; accounting
          methods, practices and procedures; shareholders; acquisition candidates;
          financial condition; clients; customers or other relationships of VeriChip
          or
          any of its affiliates (“Information”) is confidential and is a unique and
          valuable asset of VeriChip or any of its affiliates. Access to and knowledge
          of
          the Information is essential to the performance of Executive’s duties under this
          Agreement. Executive will not, during the Term or thereafter, except to
          the
          extent reasonably necessary in performance of his duties under this Agreement,
          give to any person, firm, association, corporation, or governmental agency
          any
          Information, except as may be required by law. Executive will not make
          use of
          the Information for his own purposes or for the benefit of any person or
          organization other than VeriChip or any of its affiliates. Executive will
          also
          use his best efforts to prevent the disclosure of this Information by others.
          All records, memoranda, etc. relating to the business of VeriChip or its
          affiliates, whether made by Executive or otherwise coming into his possession,
          are confidential and will remain the property of VeriChip or its
          affiliates.

         

        (b)   Executive
          will, with reasonable notice during or after the Term, furnish information
          as
          may be in his possession and fully cooperate with VeriChip and its affiliates
          as
          may be required in connection with any claims or legal action in which
          VeriChip
          or any of its affiliates is or may become a party.

         

        10.    Restrictions.
          (a)
          During the Term, and to the extent that Executive submits his resignation
          in
          accordance with Section 3(a), thereafter for a two (2) year period (the
          “Restriction Period”), Executive agrees that, without the prior express written
          approval from VeriChip’ Board of Directors, he shall not compete with VeriChip
          and its affiliates by directly or indirectly engaging in the Business or
          by
          engaging in any business comparable to that of VeriChip or its affiliates,
          either directly or indirectly, as an individual, partner, member, corporation,
          limited liability company, limited liability partnership, officer of a
          corporation or in any
          other capacity whatsoever
          at any
          location at which VeriChip or its affiliates conducts business and/or provides
          any
          services.

        
          
            
            

          

          
            -9-

            
              

            

          

          
            
            

          

        

        (b)    Executive
          acknowledges that the restrictions contained in this Section 10 of this
          Agreement, in view of the nature of the activities in which VeriChip and
          its
          affiliates are engaged, are reasonable and necessary in order to protect
          the
          legitimate interests of VeriChip and its affiliates, and that any violation
          thereof would result in irreparable injuries to VeriChip and/or its
          affiliate(s), as the case may be. Executive, therefore, acknowledges that,
          in
          the event of the violation of any of these restrictions, VeriChip shall
          be
          entitled to obtain from any Court of competent jurisdiction preliminary
          and
          permanent injunctive relief, as well as attorneys fees and costs, damages
          and an
          equitable accounting of all earnings, profits and other benefits arising
          from
          such violation, which rights shall be cumulative, and in addition to any
          other
          rights or remedies to which VeriChip may be entitled. 

         

        (c)    Executive
          agrees that the restrictions contained in this Section 10 of this Agreement
          are
          an essential element of Executive’s compensation that Executive is granted
          hereunder and, but for Executive’s agreement to comply with such restrictions,
          VeriChip would not have entered into this Agreement.

        
          
            
            

          

          
            -10-

            
              

            

          

          
            
            

          

        

        (d)   If
          any of
          the restrictions set forth in this Section 10 should, for any reason, be
          adjudged invalid or unreasonable in any proceeding, then the validity or
          enforceability of the remainder of such restrictions shall not be adversely
          affected. If the Restriction Period or the area specified in this Section
          10 of
          this Agreement shall be adjudged unreasonable in any proceeding, then the
          Restriction Period shall be reduced by such number of months, or the area
          shall
          be reduced by the elimination of such portion thereof or both, so that
          such
          restrictions may be enforced in such area and for such period of time as
          is
          adjudged to be reasonable. If Executive violates any of the restrictions
          contained in this Section 10, the Restriction Period shall not run in favor
          of
          Executive from the time of commencement of any such violation until such
          time as
          such violation shall be cured by Executive to the satisfaction of
          VeriChip.

         

        (e)   The
          terms of this Section 10 shall survive the termination of this Agreement.
          Executive acknowledges that he can be gainfully employed and still comply
          with
          the terms of this Section 10 and that it is not unduly inconvenient to
          him.

         

        11.   Indemnification;
          Litigation.
          (a)
          VeriChip will indemnify Executive to the fullest extent permitted by the
          laws of
          the State of Florida in effect at that time, or the certificate of incorporation
          and by-laws of VeriChip, whichever affords the greater protection to Executive.
          Executive will be entitled to any insurance policies VeriChip may elect
          to
          maintain generally for the benefit of its officers and directors against
          all
          costs, charges and expenses incurred in connection with any action, suit
          or
          proceeding to which he may be made a party by reason of being an officer
          of
          VeriChip.

         

        (b)   In
          the
          event of any litigation or other proceeding between VeriChip and Executive
          with
          respect to the subject matter of this Agreement, VeriChip will reimburse
          Executive for all costs and expenses related to the litigation or proceedings,
          including attorney’s fees and expenses, providing that the litigation or
          proceedings results in either a settlement requiring VeriChip to make a
          payment
          to Executive or judgment in favor of Executive.

        
          
            
            

          

          
            -11-

            
              

            

          

          
            
            

          

        

        12.   Mitigation.
          Executive will not be required to mitigate the amount of any payment provided
          for hereunder by seeking other employment or otherwise, nor will the amount
          of
          any such payment be reduced by any compensation earned by Executive as
          the
          result of employment by another employer after the date Executive’s employment
          hereunder terminates.

         

        13.   Remedies.
          (a) In
          the event of a breach of this Agreement, the nonbreaching Party may maintain
          an
          action for specific performance against the Party who is alleged to have
          breached any of the terms of this Agreement. This subparagraph (a) of this
          Section 13 of this Agreement will not be construed to limit in any manner
          any
          other rights or remedies an aggrieved Party may have by virtue of any breach
          of
          this Agreement. 

         

        (b)   Each
          of
          the Parties has the right to waive compliance with any obligation of this
          Agreement, but a waiver by any Party of any obligation will not be deemed
          a
          waiver of compliance with any other obligation or of its right to seek
          redress
          for any breach of any obligation on any subsequent occasion, nor will any
          waiver
          be deemed effective unless in writing and signed by the Party so
          waiving.

         

        14.   Consolidation,
          Merger or Sale of Assets.
          Subject
          to the terms of Section 8, this Agreement shall not preclude VeriChip from
          consolidating or merging into or with, or transferring all or substantially
          all
          of its assets to, another corporation which, subject to the express written
          consent of Executive, which consent may be withheld for any reason or for
          no
          reason, may then assume this Agreement and all obligations and undertakings
          of
          VeriChip hereunder. In that event, “VeriChip” will mean the other corporation
          and this Agreement will continue in full force and effect.

        
          
            
            

          

          
            -12-

            
              

            

          

          
            
            

          

        

        15.   Attorney's
          Representations.
          Executive acknowledges that VeriChip’ counsel, COOPER LEVENSON APRIL NIEDELMAN
& WAGENHEIM, P.A., prepared this Agreement on behalf of and in the course
          of
          its representation of VeriChip, and that:

         

        
          
            	 	
                    1.

                  	
                    Executive
                      has been advised to seek the advice of independent counsel;
                      and

                  

          

        

         

        
          	 	
                  2.

                	
                  Executive
                    has had the opportunity to seek and has, in fact, received the
                    advice of
                    independent counsel of his
                    choosing.

                

        

         

        16.   Notices.
          Any
          notices required or permitted by this Agreement or by law to be served
          on, or
          delivered to, any Party to this Agreement, shall be in writing and shall
          be
          signed by the Party giving or delivering it and sent by courier that guarantees
          overnight delivery, or by registered or certified mail, return receipt
          requested, addressed to the Party to whom any communication under this
          Agreement
          is to be made. Notice given as provided herein shall be deemed to have
          been
          given on the mailing date and, unless otherwise provided herein, shall
          be
          effective from that date. Notice shall be sent to the respective Party
          at the
          address set forth below. Any Party may change its address for purposes
          of
          receiving notices by furnishing notice of such change in the manner set
          forth
          above.

         

        If
          to
          VeriChip:

        VERICHIP
          CORP

        1690
          South Congress Avenue- Suite 200

        Delray
          Beach, Florida 33445

        

        
          	 	
                  If
                    to Executive:

                	
                  Scott
                    R. Silverman

                

        

        955
          Iris
          Drive

        Delray
          Beach, Florida 33483

        

        17.   Invalid
          Provisions.
          The
          invalidity or unenforceability of any particular provision of this Agreement
          shall not affect the other provisions hereof, and the Agreement shall be
          construed in all respects as though such invalid or unenforceable provisions
          were omitted. 

        
          
            
            

          

          
            -13-

            
              

            

          

          
            
            

          

        

        18.   Assignment.
          This
          Agreement shall inure to the benefit of and be binding upon VeriChip, its
          successors and assigns, and Executive. This Agreement, being for the personal
          services of Executive, shall not be assignable or subject to anticipation
          by
          Executive. 

         

        19.   Amendments.
          The
          terms and provisions of this Agreement may not be modified except by written
          instrument duly executed by the Parties. 

         

        20.   Entire
          Agreement.
          This
          Agreement supersedes all other oral and written agreements between the
          Parties
          with respect to the matters contained in this Agreement and, except as
          otherwise
          provided herein, this Agreement contains all of the covenants and agreements
          between the Parties with respect to those matters.

         

        21.   Law
          Governing Agreement.
          This
          Agreement shall be governed by and construed in accordance with the laws
          of the
          State of Florida. Any terms and conditions of this Agreement which apply
          to
          Executive and/or govern Executive’s behavior after Executive’s termination of
          employment and/or after the termination of this Agreement shall automatically
          survive the termination of this Agreement. 

         

        22.   Consent
          to Jurisdiction and Venue.
          The
          Parties hereby consent and submit to the jurisdiction and venue of any
          state or
          federal court within the State of Florida, Palm Beach County in any litigation
          arising out of this Agreement. 

         

        23.   Captions
          and Gender.
          The
          headings contained in this Agreement are inserted for convenience and reference
          purposes only and are not intended to describe, interpret, define or limit
          the
          scope, extent or intent of this Agreement or any provisions hereof, and
          shall
          not affect in any way the meaning or interpretation of this Agreement or
          any
          provisions hereof. All personal pronouns used in this Agreement shall include
          the other genders whether used in the masculine or feminine or neuter gender,
          and the singular shall include the plural and vice versa whenever and as
          often
          as may be appropriate.

        
          
            
            

          

          
            -14-

            
              

            

          

          
            
            

          

        

        24.   Counterpart
          Execution.
          This
          Agreement may be executed in two or more counterparts either by facsimile
          or
          otherwise, each of which shall be deemed an original, but all of which
          together
          shall constitute one and the same instrument.

         

         

        IN
          WITNESS WHEREOF,
          the
          Parties hereto have set their hands and seals as of the date set forth
          on the
          first page of this Agreement.

         

        
           

          
            	
                    ATTEST:

                  	 	
                    VERICHIP
                      CORP

                  
	 	 	 	 
	 	 	 	 
	 /s/
                    Courtney Cady	 	
                    /s/
                      Michael J.
                      Feder                                              
                       12/5/06

                  

          

          
            	
                     

                  	 	By:	 Michael
                    J. Feder	
                    ,
                      Vice President 

                  

          

          

          
            	
                    WITNESS:

                  	 	EXECUTIVE:
	 	 	 
	 /s/
                    Courtney Cady	 	 /s/
                    Scott R. Silverman
	 	 	
                    SCOTT
                      R. SILVERMAN

                  

          

           

           

        

      

      -15-Exhibit 4.1

ARTICLES OF AMENDMENT TO THE

RESTATED ARTICLES OF INCORPORATION

OF

ZIONS BANCORPORATION

Pursuant to the authority vested in the Board of
Directors of Zions Bancorporation, a Utah corporation (the “Corporation”), by
and through the Restated Articles of Incorporation, as amended (the “Articles
of Incorporation”), of the Corporation, as permitted by Sections 16-10a-602, 16-10a-1002
and 16-10a-1006, et seq. of the Utah Revised Business Corporation Act (the “UBCA”),
the Board of Directors of the Corporation hereby adopts these Articles of Amendment
to the Articles of Incorporation, without shareholder action, dated effective as
of December 5, 2006.  Shareholder action
was not required.

1.                                       The
name of the Corporation is Zions Bancorporation.

2.                                       By
this amendment (the “Amendment”), Article VIII of the Restated Articles of
Incorporation of the Corporation is hereby amended to read in its entirety as
follows:

Section
1.  Authorized Shares.  The aggregate number of shares of capital
stock which this Corporation shall have authority to issue is 353,000,000,
divided into two classes as follows:

(A)                              350,000,000
shares of Common Stock, without par value, which shares shall be entitled to
one vote per share; and

(B)           3,000,000
shares of Preferred Stock, without par value.

The Board of
Directors of this Corporation is expressly vested with the authority to
determine, with respect to any class of Preferred Stock, the dividend rights
(including rights as to cumulative, noncumulative or partially cumulative
dividends) and preferences, dividend rate, conversion rights, voting rights,
rights and terms of redemption (including sinking fund provisions), redemption
price or prices, and the liquidation preferences of any such class of Preferred
Stock.  As to any series of Preferred
Stock, the Board of Directors is authorized to determine the number of shares
constituting such series, and to increase or decrease (but not below the number
of shares of such series then outstanding) the number of shares of that series.

The Board of
Directors of this Corporation is expressly vested with the authority to divide
the above-described class of Preferred Stock into series and to fix and
determine the variations in the relative rights and preferences of the shares
of Preferred Stock of any series so established, including, without limitation,
the following:

 
  

(i)                                     the
rate of dividend;

(ii)                                  the
price at and the terms and conditions on which shares may be redeemed;

(iii)                               the amount payable upon
shares in event of involuntary liquidation;

(iv)                              the
amount payable upon shares in event of voluntary liquidation;

(v)                                 sinking
fund provisions for the redemption or purchase of shares;

(vi)                              the
terms and conditions on which shares may be converted, if the shares of any
series are issued with the privilege of conversion; and

(vii)                           such other variations in the
relative rights and preferences of such shares which at the time of the
establishment of such series are not prohibited by law.

Section 2. 
Designation of Series A Floating-Rate Non-Cumulative Perpetual Preferred
Stock.  A series of Preferred
Stock shall be hereby designated “Series A Floating-Rate Non-Cumulative
Perpetual Preferred Stock” (hereinafter referred to as the “Series A
Preferred Stock”).  Each share of Series A
Preferred Stock shall be identical in all respects to every other share of Series A
Preferred Stock.  Series A Preferred
Stock will rank equally with Parity Stock, as defined below, if any, and will
rank senior to Junior Stock in each case with respect to the payment of
dividends and the distribution of assets in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation.

Section 3. 
Number of Shares. 
The number of authorized shares of Series A Preferred Stock shall
be 240,000.  Such number may from time to
time be increased (but not in excess of the then total number of authorized
shares of preferred stock) or decreased (but not below the number of shares of Series A
Preferred Stock then outstanding) by further resolution duly adopted by the
Board of Directors of the Corporation or any duly authorized committee of the
Board of Directors of the Corporation and by the filing of Articles of
Amendment pursuant to the provisions of the UBCA stating that such increase or
reduction, as the case may be, has been so authorized.  The Corporation shall have the authority to
issue fractional shares of Series A Preferred Stock.

 2
 

 
  

Section 4. 
Definitions.  As
used herein with respect to Series A Preferred Stock:

“Business Day” means any day that is a Monday,
Tuesday, Wednesday, Thursday or Friday that is not a day on which banking
institutions in Salt Lake City, Utah or New York City generally are authorized
or required by law or executive order to close.

“Calculation Agent” means Zions First National Bank or
such other bank as may be acting as calculation agent for the Corporation with
respect to the Series A Preferred Stock.

“Depositary Company” shall have the meaning set forth
in Section 7(d) hereof.

“Determination Date” means, with respect to any Dividend
Period, the second London Business Day immediately preceding the first day of
such Dividend Period.

“Dividend Payment Date” shall have the meaning set
forth in Section 5(a) hereof.

“Dividend Period” shall have the meaning set forth in Section 5(a)
hereof.

“DTC” means The Depository Trust Company, together
with its successors and assigns.

“Junior Stock” means the Corporation’s common stock
and any other class or series of stock of the Corporation hereafter authorized and
issued over which Series A Preferred Stock has preference or priority in
the payment of dividends or in the distribution of assets on any liquidation,
dissolution or winding up of the affairs of the Corporation.

“London Business Day” means any day in which dealings
in U.S. dollars are transacted or, with respect to any future date, are
expected to be transacted in the London interbank market.

“Nonpayment” shall have the meaning set forth in
Section 8(c)(i) hereof.

“Parity Stock” means any other class or series of
stock of the Corporation that ranks on par with Series A Preferred Stock
in the payment of dividends and in the distribution of assets on any
liquidation, dissolution or winding up of the affairs of the Corporation.

“Preferred Director” shall have the meaning set forth
in Section 8(c)(i) hereof.

“Representative Amount” means, with respect to the
determination of Three-Month LIBOR, an amount that, in the Calculation Agent’s
judgment, is representative of a single transaction in the relevant market at
the relevant time.

 3
 

 
  

“Telerate Page 3750” means the display page so
designated on the Moneyline Telerate Service (or such other page as may replace
that page on that service, or such other service as may be nominated as the
information vendor, for the purpose of displaying rates or prices comparable to
the London Interbank Offered Rate for U.S. dollar deposits).

“Three-Month LIBOR” means, with respect to any
Dividend Period, the offered rate (expressed as a percentage per annum) for
deposits in U.S. dollars for a three-month period commencing on the first day
of such Dividend Period that appears on Telerate Page 3750 as of
11:00 a.m. (London time) on the Determination Date.  If such rate does not appear on Telerate Page
3750 or if Telerate Page 3750 is not available on the Determination Date,
Three-Month LIBOR will be determined on the basis of the rates at which
deposits in U.S. dollars for a three-month period commencing on the first day
of such Dividend Period and in a Representative Amount are offered to prime
banks in the London interbank market by four major banks in the London
interbank market selected by the Calculation Agent, at approximately 11:00 a.m.,
London time, on the Determination Date.  The
Calculation Agent will request the principal London office of each of such banks
to provide a quotation of such rate (expressed as a percentage per annum).  If at least two such quotations are provided,
Three-Month LIBOR with respect to such Dividend Period will be the arithmetic
mean (rounded upward if necessary to the nearest .00001 of 1%) of such
quotations.  If fewer than two such quotations
are provided, Three-Month LIBOR with respect to such Dividend Period will be determined
on the basis of the rates quoted by three major banks in New York City selected
by the Calculation Agent, at approximately 11:00 a.m., New York City time, on
the Determination Date for loans in U.S. dollars in a Representative Amount to
leading European banks for a three-month period commencing on the first day of such
Dividend Period.  If at least two such quotations
are provided, Three-Month LIBOR with respect to such Dividend Period will be
the arithmetic mean (rounded upward if necessary to the nearest .00001 of 1%)
of such quotations.  If fewer than two
such quotations are provided, Three-Month LIBOR for such Dividend Period will
be the same as Three-Month LIBOR as determined for the immediately previous
Dividend Period, or in the case of the first Dividend Period, the most recent
rate that could have been determined in accordance with the first sentence of
this paragraph had Series A Preferred Stock been outstanding.  The Calculation Agent’s determination of
Three-Month LIBOR and calculation of the amount of dividends for each Dividend
Period will be on file at the principal offices of the Corporation, will be
made available to any holder of Series A Preferred Stock upon request and
will be final and binding in the absence of manifest error.

“Voting Parity Stock” means the Series A Preferred
Stock and each class or series of preferred stock that ranks on parity with the
Series A Preferred Stock as to payment of dividends and has voting rights similar
to those described in Section 8(c).

 4
 

 
  

Section 5. 
Dividends.

(a) Rate.  Holders of Series A Preferred Stock
shall be entitled to receive, if, as and when declared by the Board of
Directors of the Corporation or any duly authorized committee of the Board of
Directors of the Corporation, but only out of assets legally available for the
payment of dividends under the UBCA, non-cumulative cash dividends on the
liquidation preference of $1,000 per share of Series A Preferred Stock,
and no more, payable quarterly in arrears on the 15th day of March, June, September
and December of each year commencing March 15, 2007; provided, however, if any
such day is not a Business Day, then payment of any dividend otherwise payable
on that date will be made on the next succeeding day that is a Business Day
(without any interest or other payment in respect of such delay) (each such day
on which dividends are payable, a “Dividend Payment Date”).  The period from and including any Dividend
Payment Date to but excluding the next Dividend Payment Date is a “Dividend
Period”; provided, however, that the first Dividend Period shall be the period
from and including the date of original issuance of the Series A Preferred
Stock to but excluding the next Dividend Payment Date; provided, further, that
if additional shares of Series A Preferred Stock are issued subsequently,
the first Dividend Period with respect to such shares shall be (i) if the
date of such subsequent issuance is a Dividend Payment Date, the period from
and including such Dividend Payment Date to but excluding the next Dividend
Payment Date and (ii) if the date of such subsequent issuance is not a
Dividend Payment Date, the period from and including the most recent Dividend
Payment Date preceding the date of such subsequent issuance to but excluding
the next Dividend Payment Date.  Dividends
on each share of Series A Preferred Stock will be payable, if, as and when
declared by the Board of Directors of the Corporation or any duly authorized
committee of the Board of Directors of the Corporation, on the liquidation
preference of $1,000 per share at a rate per annum equal to the greater of (i)
Three-Month LIBOR plus 0.520% or (ii) 4.000%. 
The record date for payment of dividends on the Series A Preferred
Stock shall be the March 1, June 1, September 1 and December 1 immediately
preceding the respective Dividend Payment Date. 
The amount of dividends payable per share of Series A Preferred
Stock on each Dividend Payment Date shall be calculated by multiplying
(i) the per annum rate described above in effect for the related Dividend
Period by (ii) a fraction, the numerator of which shall be the actual
number of days in such Dividend Period and the denominator of which shall be
360, and by (iii) $1,000.  No
interest will be payable in respect of any dividend payment on shares of
Series A Preferred Stock that may be in arrears.

(b) Non-Cumulative Dividends.  Dividends on shares of Series A
Preferred Stock shall be non-cumulative. 
To the extent that any dividends payable on the shares of Series A
Preferred Stock on any Dividend Payment Date are not declared and paid, in full
or otherwise, on such Dividend Payment Date, then such unpaid dividends shall
not accrue or be payable and the Corporation shall have no obligation to pay
dividends for such Dividend Period, whether or not dividends on the
Series A Preferred Stock are declared for any future Dividend Period.

(c) Priority of Dividends.  During any Dividend Period, so long as any
share of Series A Preferred Stock remains outstanding, unless dividends in
an amount computed in accordance with Section 5(a) for each share of Series A
Preferred Stock as

 5
 

 
  

of the Dividend Payment Date for the then-current Dividend
Period have been paid, or declared and funds set aside therefor, and the
Corporation is not in default on its obligations to redeem any shares of
Series A Preferred Stock that have been called for redemption, (i) no
dividend shall be declared or paid or set aside for payment and no distribution
shall be declared or made or set aside for payment on any Junior Stock, other
than a dividend payable solely in Junior Stock, (ii) no shares of Junior Stock
shall be repurchased, redeemed or otherwise acquired for consideration by the
Corporation, directly or indirectly (other than as a result of a
reclassification of Junior Stock for or into other Junior Stock, or the
exchange or conversion of one share of Junior Stock for or into another share
of Junior Stock, and other than through the use of the proceeds of a
substantially contemporaneous sale of other shares of Junior Stock), nor shall
any monies be paid to or made available for a sinking fund for the redemption
of any such shares by the Corporation, and (iii) no shares of Parity Stock
shall be repurchased, redeemed or otherwise acquired for consideration by the
Corporation otherwise than pursuant to pro rata offers to purchase all, or a
pro rata portion, of the Series A Preferred Stock and such Parity Stock,
except by conversion into or exchange for Junior Stock.  On any Dividend Payment Date for which dividends
are not paid in full upon the shares of Series A Preferred Stock and any
Parity Stock, all dividends declared upon shares of Series A Preferred
Stock and any Parity Stock for payment on such Dividend Payment Date shall be
declared on a proportionate basis.  Subject
to the foregoing, and not otherwise, such dividends (payable in cash, stock or
otherwise) as may be determined by the Board of Directors of the Corporation or
any duly authorized committee of the Board of Directors of the Corporation may
be declared and paid on any Junior Stock or Parity Stock from time to time out
of any assets legally available therefor, and the shares of Series A
Preferred Stock shall not be entitled to participate in any such dividend.

Section 6. 
Liquidation Rights.

(a) Liquidation. 
In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation,
holders of Series A Preferred Stock shall be entitled to receive out of
assets of the Corporation available for distribution to shareholders, after
satisfaction of liabilities to creditors and subject to the rights of the
holders of any class or series of securities ranking senior to Series A
Preferred Stock, before any distribution of assets of the Corporation is made
to the holders of Junior Stock, a liquidating distribution in the amount of the
liquidation preference of $1,000 per share, plus any declared and unpaid
dividends, without accumulation of any undeclared dividends, to the date of
liquidation.  The holders of Series A
Preferred Stock shall not be entitled to any other amounts from the Corporation
after they have received their full liquidating distribution.

(b) Partial Payment.  If the assets of the
Corporation are not sufficient to pay in full the liquidation preference plus
any declared and unpaid dividends to the date of liquidation to all holders of Series A
Preferred Stock and all holders of any Parity Stock, the amounts paid to the
holders of Series A Preferred Stock and to the holders of all Parity Stock
shall be paid pro rata in accordance with the respective aggregate

 6
 

 
  

liquidation preferences plus any declared and unpaid
dividends of Series A Preferred Stock and all such Parity Stock to the
date of liquidation.

(c) Residual Distributions.  If the liquidation
preference plus any declared and unpaid dividends to the date of liquidation has
been paid in full to all holders of Series A Preferred Stock and all
holders of any Parity Stock, the holders of Junior Stock shall be entitled to
receive all remaining assets of the Corporation according to their respective
rights and preferences.

(d) Merger, Consolidation and Sale of Assets Not
Liquidation.  For purposes
of this Section 6, the merger or consolidation of the Corporation with any
other entity, including a merger or consolidation in which the holders of
Series A Preferred Stock receive cash, securities or property for their
shares, or the sale, lease or exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the assets of
the Corporation for cash, securities or other property shall not constitute a
voluntary or involuntary dissolution, liquidation or winding up of the affairs
of the Corporation.

Section 7. 
Redemption.

(a) Optional Redemption.  The Series A Preferred Stock shall not
be redeemable by the Corporation prior to December 15, 2011.  On and after such date, the Corporation, at
the option of its Board of Directors or any duly authorized committee of the
Board of Directors of the Corporation, may redeem in whole or in part the
shares of Series A Preferred Stock at the time outstanding upon notice
given as provided in Section 7(b) below.  The redemption price for shares of Series A
Preferred Stock shall be $1,000 per share plus any declared and unpaid dividends,
without accumulation of any undeclared dividends, through but not including the
redemption date.  Holders of
Series A Preferred Stock shall not have any right to require the
redemption or repurchase of any shares of Series A Preferred Stock.

(b) Notice of Redemption.  Notice of every redemption of shares of Series A
Preferred Stock shall be mailed by first class mail to the holders of record of
the Series A Preferred Stock to be redeemed at their respective last
addresses appearing on the stock register of the Corporation.  Such mailing shall be at least 30 days and
not more than 60 days before the date fixed for redemption (provided that, if depositary
shares representing the Series A Preferred Stock or the Series A Preferred
Stock are held in book-entry form through the DTC, the Corporation may give
notice in any manner permitted by the DTC). 
Any notice mailed as provided in this Section 7(b) shall be
conclusively presumed to have been duly given, whether or not the holder
receives such notice, but failure duly to give such notice by mail, or any
defect in such notice or in the mailing thereof, to any holder of shares of Series A
Preferred Stock designated for redemption shall not affect the validity of the
proceedings for the redemption of any other shares of Series A Preferred
Stock.  Each notice shall state (i) the
redemption date; (ii) the number of shares of Series A Preferred Stock to
be redeemed and, if fewer than all the shares held by such holder are to be
redeemed, the number of such shares to be redeemed

 7
 

 
  

from such holder; (iii) the redemption price; (iv) the
place or places where the certificates for such shares of Series A
Preferred Stock are to be surrendered for payment of the redemption price; and
(v) that dividends on the shares to be redeemed will cease to accrue on the
redemption date.

(c) Partial Redemption.  In case of any redemption
of only part of the shares of Series A Preferred Stock at the time
outstanding, the shares of Series A Preferred Stock to be redeemed shall
be selected either pro rata from the holders of record of Series A
Preferred Stock in proportion to the number of Series A Preferred Stock
held by such holders or by lot or in such other manner as the Board of
Directors of the Corporation or any duly authorized committee of the Board of
Directors of the Corporation may determine to be fair and equitable.  Subject to the provisions of this Section 7,
the Board of Directors of the Corporation or any duly authorized committee of
the Board of Directors of the Corporation shall have full power and authority
to prescribe the terms and conditions upon which shares of Series A
Preferred Stock shall be redeemed from time to time.

(d) Effectiveness of Redemption.  If notice of redemption of
any shares of Series A Preferred Stock has been duly given and if the funds
necessary for the redemption have been set aside by the Corporation for the
benefit of the holder of any shares of Series A Preferred Stock so called
for redemption, separate and apart from its other assets, in trust, so as to be
and continue to be available therefor, or deposited by the Corporation with a
bank or trust company selected by the Board of Directors of the Corporation or
any duly authorized committee of the Board of Directors of the Corporation (the
“Depositary Company”) in trust for the pro rata benefit of the holders of the
shares called for redemption, then, notwithstanding that any certificate for
any share so called for redemption has not been surrendered for cancellation,
on and after the redemption date (i) all shares so called for redemption
shall cease to be outstanding, (ii) all declared but unpaid dividends with
respect to such shares shall cease to accrue, and (iii) all rights with
respect to such shares shall forthwith on such redemption date cease and
terminate, except only the right of the holders thereof to receive the amount
payable on such redemption from the Depositary Company at any time after the
redemption date from the funds so deposited, without interest.  The Corporation shall be entitled to receive,
from time to time, from the Depositary Company any interest accrued on such
funds, and the holders of any shares called for redemption shall have no claim
to any such interest.  Any funds so
deposited and unclaimed at the end of three years from the redemption date
shall, to the extent permitted by law, be released or repaid to the
Corporation, and in the event of such repayment to the Corporation, the holders
of record of the shares so called for redemption shall be deemed to be
unsecured creditors of the Corporation for an amount equivalent to the amount
deposited as stated above for the redemption of such shares and so repaid to
the Corporation, but shall in no event be entitled to any interest.

Section 8. 
Voting Rights.  The
holders of Series A Preferred Stock will have no voting rights and will
not be entitled to elect any directors, except as expressly provided by law and
as provided in this Section 8.  Each
holder of Series A Preferred

 8
 

 
  

Stock will have one vote per share on any matter in
which holders of such shares are entitled to vote, including when acting by
written consent.  The voting rights
provided in this Section 8 shall not apply if, at or prior to the time
when the act with respect to which such vote or consent would otherwise be
required shall be effected, all outstanding shares of Series A Preferred Stock
have been redeemed or called for redemption upon proper notice and sufficient
funds have been set aside in accordance with Section 7(d).

(a) Supermajority Voting Rights – Priority.  Unless the vote or consent of the holders of
a greater number of shares shall then be required by law, the affirmative vote
or consent of the holders of at least 66 2/3% of all of the shares of the
Series A Preferred Stock and any Parity Stock that is preferred stock at
the time outstanding, voting together as a class, shall be required to issue,
authorize or increase the authorized amount of, or to issue or authorize any
obligation or security convertible into or evidencing the right to purchase,
any additional class or series of stock ranking senior to the shares of the
Series A Preferred Stock with respect to the payment of dividends or the
distribution of assets on any liquidation, dissolution or winding up of the
affairs of the Corporation.

(b) Supermajority Voting Rights – Amendments.  Unless the vote or consent of the holders of
a greater number of shares shall then be required by law, the affirmative vote
or consent of the holders of at least 66 2/3% of all of the shares the Series A
Preferred Stock at the time outstanding, voting separately as a class, shall be
required to authorize any amendment of the Articles of Incorporation or of any articles
of amendment creating the Series A Preferred Stock or any other series of
preferred stock, whether by merger, consolidation or otherwise, so as to materially
and adversely affect the powers, preferences, privileges or rights of the Series A
Preferred Stock, taken as a whole; provided, however, that the following shall
be deemed not to materially and adversely affect any power, preference or right
of the Series A Preferred Stock: (i) any increase in the amount of
the authorized or issued shares of Series A Preferred Stock or the amount
of the authorized shares of common stock or preferred stock of the Corporation
or the creation and issuance, or an increase in the authorized or issued
amount, of any other class or series of common stock or other equity securities
ranking equally with and/or junior to the Series A Preferred Stock with
respect to the payment of dividends (whether such dividends are cumulative or
non-cumulative) and/or the distribution of assets upon a liquidation, dissolution
or winding up of the affairs of the Corporation; (ii) any change to the
number of directors or classification of or number of classes of directors of
the Corporation; and (iii) the occurrence of a merger or consolidation
involving the Corporation, so long as any of the shares of Series A Preferred
Stock remains outstanding with the terms thereof materially unchanged or new
shares of the surviving corporation or entity are issued with the same terms as
the Series A Preferred Stock, in each case taking into account that upon the
occurrence of this event the Corporation may not be the surviving entity.

 9
 

 
  

(c) Special Voting Right.

(i) Voting Right.  If and whenever dividends on the Series A
Preferred Stock or any other class or series of Voting Parity Stock have not
been declared and paid in an aggregate amount at least equal as to any such class
or series, to the amount of dividends payable on such class and series at its
respective stated dividend rate for a period of six quarterly dividend periods,
whether or not for consecutive dividend periods (a “Nonpayment”), the number of
directors then constituting the Board of Directors of the Corporation shall be
increased by two.  Holders of all classes
and series of any Voting Parity Stock as to which a Nonpayment exists
(including, if applicable, the Series A Preferred Stock) will be entitled
to vote together as a single class for the election of the two additional
members of the Corporation’s Board of Directors (the “Preferred Directors”), provided
that the election of such directors must not cause the Corporation to violate
the listing standards of the Nasdaq Stock Market (or other exchange on which
the Corporation’s securities may be listed) or the rules and regulations of any
other regulatory or self-regulatory body. 
At no time will the Corporation’s Board of Directors include more than
two Preferred Directors.

(ii) Election.  The election of the Preferred Directors will
take place at any annual meeting of shareholders or any special meeting of the
holders of Voting Parity Stock with respect to which a Nonpayment exists
(including, if applicable, the Series A Preferred Stock), called as
provided herein.  In the event of a
Nonpayment, the Secretary of the Corporation, upon the written request of any
holder of record of at least 20% of the outstanding shares of any Voting Parity
Stock with respect to which a Nonpayment exists (including, if applicable, the Series A
Preferred Stock) addressed to the Secretary at the Corporation’s principal
office, must (unless such request is received less than 90 days before the date
fixed for the next annual or special meeting of the shareholders, in which
event such election shall be held at such next annual or special meeting of shareholders),
call a special meeting of the holders of all Voting Parity Stock with respect
to which a Nonpayment exists for the election of the Preferred Directors to be
elected by them as provided in Section 8(c)(iii) below.  So long as these voting rights granted
pursuant to Section 8(c)(i) have not ceased, holders of any and all Voting
Parity Stock with respect to which a Nonpayment exists (including, if
applicable, the Series A Preferred Stock), voting together as a single
class, will continue to elect such directors at each subsequent annual meeting.  The Preferred Directors shall each be
entitled to one vote per director on any matter.

(iii) Notice for Special Meeting.  Notice for a special meeting will be given in
a similar manner to that provided in the Corporation’s bylaws for a special
meeting of the shareholders.  If the
secretary of the Corporation does not call a special meeting within 20 days
after receipt of any such request, then any holder of Series A Preferred
Stock may (at our expense) call such meeting, upon notice as provided in this Section 8(c)(iii),
and for that purpose will have access to the stock register of the Corporation.  The Preferred Directors elected at any such
special meeting will hold office until the next annual meeting of our shareholders
unless they have been previously terminated or removed pursuant to Section 8(c)(iv).

 10
 

 
  

(iv) Termination; Removal; Vacancy.  If and when full dividends have been paid for
at least four quarterly dividend periods following a Nonpayment on any class or
series of Voting Parity Stock with respect to which a Nonpayment exists or
existed, the voting right granted pursuant to Section 8(c)(i) will cease with
respect to that class or series (subject to revesting in the event of each
subsequent Nonpayment).  If and when full
dividends have been paid for at least four quarterly dividend periods on all
classes and series of Voting Parity Stock as to which a Nonpayment exists or
existed, the terms of office of the Preferred Directors will immediately
terminate and the number of directors constituting the Board of Directors of
the Corporation will be automatically decreased by two.  Any Preferred Director may be removed at any
time without cause by the holders of record of a majority of the outstanding
shares of all classes and series of Voting Parity Stock with respect to which a
Nonpayment then exists voting together as a single class.  So long as the voting rights granted pursuant
to Section 8(c)(i) remain in effect, any vacancy in the office of a Preferred
Director (other than prior to the initial election of the Preferred Directors)
may be filled by the written consent of the Preferred Director remaining in
office or, if none remains in office, by the vote or consent of the holders of
record of a majority of the outstanding shares of all classes and series of Voting
Parity Stock with respect to which a Nonpayment then exists voting together as
a single class, with the successor to serve until the next annual meeting of
shareholders.

Section 9. 
Conversion; Exchange.  The
holders of Series A Preferred Stock shall not have any rights to convert
such Series A Preferred Stock into, or exchange such Series A
Preferred Stock for, shares of any other class of capital stock of the
Corporation.

Section 10. 
Other Issuances.  Notwithstanding
anything set forth in the Articles of Incorporation or the Articles of Amendment
establishing the rights and preferences of the Series A Preferred Stock to the
contrary, the Board of Directors of the Corporation, or any authorized
committee of the Board of Directors of the Corporation, without the vote or
consent of the holders of the Series A Preferred Stock, may authorize and
issue additional shares of Junior Stock, Parity Stock or, subject to the voting
rights granted in Section 8(a), any class of securities ranking senior to
the Series A Preferred Stock as to the payment of dividends and the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation.

Section 11. 
Repurchase.  Subject
to the limitations imposed herein, the Corporation may purchase and sell Series A
Preferred Stock from time to time to such extent, in such manner, and upon such
terms as the Board of Directors of the Corporation or any duly authorized
committee of the Board of Directors of the Corporation may determine; provided,
however, that the Corporation shall not use any of its funds for any such
purchase when there are reasonable grounds to believe that the Corporation is,
or by such purchase would be, rendered insolvent.

Section 12. 
Unissued or Reacquired Shares.  Shares
of Series A Preferred Stock not issued or which have been issued and
converted, redeemed or

 11
 

 
  

otherwise purchased or acquired by the Corporation
shall be restored to the status of authorized but unissued shares of preferred
stock without designation as to series.

Section 13. 
No Sinking Fund.  Shares
of Series A Preferred Stock are not subject to the operation of a sinking
fund.

 12
 

 
  

The undersigned does hereby acknowledge, under
penalties of perjury, that this document is the act and deed of the
Corporation, and that the facts herein stated are true.

DATED this 5th day of December 2006.

	
  

  	
  ZIONS
  BANCORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Harris H.
  Simmons

  	
   

  
	
   

  	
  Name: Harris H.
  Simmons

  
	
   

  	
  Title:   Chief
  Executive Officer

  

 

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