Exhibit
10.107
Compensation and Change
of Control Agreement
This
Compensation and Change of Control Agreement (this
“Agreement”) dated as of this 18 th day of
December, 2007, is entered into between Digital Angel Corporation
(the “Company”) and Thomas J. Hoyer (the
“Executive).
BACKGROUND
A. The Company
desires to employ Executive as its Vice President, Chief Financial
Officer, and Treasurer, and Executive desires to accept such
employment with the Company.
B. The Company
desires to provide to Executive certain compensation, stock option
grants, and benefits in connection with his employment, and the
Company further desires to provide Executive with certain
additional compensation in the event of a change of control event
at the Company. The Company and Executive, by this Agreement,
desire to set forth the details of such compensation
arrangements.
AGREEMENT
1.
Compensation and Benefits . The compensation and benefits
payable and provided to Executive for services rendered shall
include the following:
1.1 Base salary
of $265,000 per year, payable bi-weekly in accordance with the
Company’s normal payroll practices.
1.2 Car
allowance of $10,000 per year, payable bi-weekly in accordance with
the Company’s normal payroll practices.
1.3 Target
annual bonus of 60% of base salary based upon plan metrics, the
Company’s performance, and individual contribution. Bonus
will have a cap equal to 120% of base salary.
1.4 Grant of
stock options for 250,000 shares of Company stock with a strike
price equal to market closing price as of the date that Executive
begins working for the Company. The stock options will vest ratably
over the next five years and will be subject to the terms of the
Company’s stock option plan.
1.5 Executive
will be eligible to participate in the Company’s 401(k) plan,
health insurance, disability and life insurance, and any other
welfare benefit plan, program, or fringe benefit of employment made
available to similarly situated employees that may be in effect
from time to time.
2. Change
of Control Benefit .
2.1 In the event
of a Change of Control event (defined below), Company will pay to
Executive the Change of Control Payment set forth in this
Agreement. The Change of Control Payment is payable only upon a
Change of Control and a termination of Executive’s Employment
within three (3) months following such Change of Control (whether
through voluntary resignation or involuntary
termination).
2.2 The Change
of Control Payment is equal to the sum of: (a) 200% of
Executive’s base salary in effect at the time of the Change
of Control, plus (b) 200% of Executive’s target bonus (or
average annual bonus of the most recent three (3) years if this is
larger). In addition, in the event of a Change of Control, all
unvested stock options will be immediately vested. Except as
provided in Section 3 of this Agreement, the Change of Control
Payment will be paid in one lump sum within fifteen (15) business
days following the date on which the Release Agreement required
pursuant to Section 4 of this Agreement becomes
irrevocable.
2.3 For purposes
of this Agreement, “Change of Control” means the
occurrence of any of the following events, each of which shall be
determined independently of the others:
2.3.1 a
transaction or series of transactions (other than an offering of
stock to the general public through a registration statement filed
with the Securities and Exchange Commission) whereby any
“person” or related “group” of
“persons” (as such terms are used in Sections 13(d) and
14(d)(2) of the Exchange Act) (other than the Company, any of its
Affiliates, any trustee or other fiduciary holding securities under
an employee benefit plan of the Company or any Affiliate, or any
“person” that, prior to such transaction, directly or
indirectly controls, is controlled by, or is under common control
with, the Company) becomes a “beneficial owner” (as
such term is used in Rule 13d-3 promulgated under the Exchange Act)
of fify percent (50%) or more of the stock of the Company entitled
to vote in the election of directors; or
2.3.2 the Company
(whether directly or indirectly involving one or more
intermediaries) completes a (1) merger, consolidation,
reorganization, or business combination, or (2) sale or other
disposition of all or substantially all of its assets in any single
transaction or series of related transactions, or (3) the
acquisition of assets or stock of another entity, in each case
excepting any transaction:
2.3.2.1 which
results in the Company’s voting securities outstanding
immediately before the transaction continuing to represent (either
by remaining outstanding or by being converted into voting
securities of the Company or the person that, as a result of the
transaction, controls, directly or indirectly, the Company or owns,
directly or indirectly, all or substantially all of the
Company’s assets or otherwise succeeds to the business of
the
Company (the
Company or such person, the “Successor Entity”))
directly or indirectly, at least a majority of the combined voting
power of the Successor Entity’s outstanding voting securities
immediately after the transaction, and
2.3.2.2 after which,
no Person or group beneficially owns voting securities representing
50% or more of the combined voting power of the Successor Entity;
provided, however, that no Person or group shall be treated for
purposes of this provision as beneficially owning 50% or more of
the combined voting power of the Successor Entity solely as a
result of the voting power held in the Company prior to the
consummation of the transaction.
2.3.3
Notwithstanding the foregoing, if, immediately after the
occurrence of any event enumerated above, the Continuing Directors
control the majority of the Board of Directors of the Company (or,
in the case of any merger or combination in which the Company is
not the surviving entity, continue to constitute a majority of the
board of directors of such successor entity), such event shall not
constitute a Change of Control for purposes of this Agreement until
such time as (a) the Continuing Directors no longer constitute a
majority of the Board of Directo
