Exhibit 10.48
EXECUTIVE EMPLOYMENT
AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT
(this “Agreement”) is made and entered into effective
as of October 30, 2008 by and between Digirad Corporation, a
Delaware Corporation (the “Company”) and Todd P. Clyde
(“Executive”). The Company and Executive are
hereinafter collectively referred to as the “Parties,”
and individually referred to each or any as a
“Party.”
RECITALS
A. WHEREAS, the Company wishes to
employ Executive on the terms and conditions set forth in this
Agreement; and
B. WHEREAS, Executive desires to
become an employee of the Company on the terms and conditions set
forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of
the promises and the mutual covenants herein contained, and for
other good and valuable consideration, the sufficiency of which is
hereby acknowledged, the Parties, intending to be legally bound,
agree as follows:
1. Employment.
1.1 Title/Responsibilities .
Executive shall serve as Chief Executive Officer and President of
Digirad Corporation and President of the Company’s
wholly-owned subsidiary, Digirad Imaging Solutions, Inc.
(“DIS”). Executive shall have the normal duties,
responsibilities and authority of such offices, unless otherwise
determined from time to time by the Company’s Board of
Directors. Executive shall do and perform all services, acts, or
responsibilities necessary or advisable to carry out the job duties
of Chief Executive Officer and President of Digirad Corporation,
and as President of DIS, as assigned by the Company’s Board
of Directors, provided, however, that at all times during his
employment Executive shall be subject to the direction and policies
from time to time established by the Board of Directors of the
Company.
1.2 Full Time Attention .
Executive shall devote his reasonable best efforts and his full
business time and attention to the performance of the services
customarily incident to such office and to such other services as
the Company’s Board of Directors may reasonably
request.
1.3 Other Activities . Except
upon the prior written consent of the Board of Directors, Executive
shall not during the period of employment engage, directly or
indirectly, in any other business activity (whether or not pursued
for pecuniary advantage) that is or may be competitive with, or
that might place him in a competing position to that of the Company
or any other corporation or entity that directly or indirectly
controls, is controlled by, or is under common control with the
Company (an “Affiliated Company”), provided that
Executive may own less than two percent of the outstanding
securities of any such competing corporation. Executive shall also
disclose to and obtain the prior consent of the Board of Directors
for any other, non-competitive business activities in which he may
wish to engage, such as joining the board of directors of another
entity.
2. Term of
Employment.
2.1 Employment At Will .
Executive’s employment is at will, and not for any specific
term. Executive’s employment may be terminated by Executive
or by the Company at any time for any reason, with or without cause
or notice, and without liability of any kind other than as
specifically set forth below.
3. Compensation.
3.1 Base Salary . Beginning
on the date (October 20, 2008) Executive commences his duties as
the Company’s Chief Executive Officer (the “Start
Date”), Company shall pay Executive a salary (the “Base
Salary”) of $300,000 per year, payable every two weeks in
accordance with the Company’s normal payroll practices for
Executives. The Company’s Board of Directors shall provide
Executive with annual performance reviews, and, thereafter,
Executive shall be entitled to such Base Salary as the Board of
Directors may from time to time establish in its sole
discretion.
3.2 Stock Options . Executive
shall also receive from the Company stock options granting
Executive the right to purchase 300,000 shares of the
Company’s common stock with an exercise price equal to the
fair market value of the Company’s common stock on the date
of grant. One forty-eighth (1/48th) of the shares subject to
the option shall vest and become exercisable on the corresponding
day of each month after the date of grant, or to the extent such a
month does not have the corresponding day, on the last day of any
such month, until all the shares are vested and exercisable,
subject to Executive continuing to be an employee on each such
date. The terms and conditions of this stock option grant shall be
governed by the Company’s 2004 Stock Incentive Plan (the
“Plan”) and shall be set forth in a separate stock
option agreement. In addition to the vesting treatment specified in
Section 11 of the Plan, if Executive remains employed with the
Company (or any successor entity) for the entire period beginning
on the date of the consummation of any Change in Control or
Corporate Transaction (as both terms are defined in the Plan) and
ending on the first anniversary of such consummation, all stock
options granted to Executive shall become fully vested and
exercisable as such anniversary date.
3.3 Other Compensation . In
addition to the Base Salary payable to Executive hereunder,
Executive shall be eligible to receive the following
benefits:
3.3.1 Performance Bonus .
Executive shall be eligible to receive an annual performance bonus
of up to a specified percentage of Base Salary conditioned upon
achievement of certain corporate performance milestones as well as
performance milestones personal to Executive, all to be established
and determined by the Company’s Board of Directors after
discussion and consultant with Executive. For the 2009 calendar
year only, the annual performance bonus shall have a target value
of at least sixty percent (60%) of Base Salary. The Board of
Directors or Compensation Committee, as applicable, shall, in their
respective sole discretion, determine whether such performance
milestones have been attained.
3.3.2 Benefits . Benefits to
which other executive officers of the Company are entitled as
determined by the Company’s Board of Directors, on terms
comparable thereto, including but not limited to, participation in
any and all pension and profit sharing plans, bonus and incentive
payment programs, group life insurance policies and plans, medical,
health, dental and disability insurance policies and plans, and the
like, which may be maintained by the Company, in the sole
discretion of the Company’s Board of Directors, for the
benefit of its executive officers.
3.3.3 Paid Time Off .
Executive shall be eligible to receive ten (10) days of paid
holidays and twenty-one (21) days of paid time off per year,
accruing annually beginning on the Start Date, and such paid-time
off may be adjusted pursuant to Company policies.
3.3.4 Expense Reimbursement .
The Company shall reimburse Executive for all reasonable
out-of-pocket expenses incurred by him in the course of performing
his duties under this Agreement, which conform to the
Company’s policies in effect from time to time with respect
to travel, entertainment and other business expenses, subject to
the Company’s requirements with respect to reporting and
documentation of such expenses pursuant to Company
policy.
3.4 Withholdings . Except as
expressly stated herein, all of Executive’s compensation
shall be subject to customary federal, state, local and other
withholding taxes and any other employment taxes as are commonly
required to be collected or withheld by the Company.
4. Termination.
4.1 Termination for Cause .
The Company shall terminate this Agreement for Cause (as defined
herein) by delivery of written notice to Executive specifying the
cause or causes relied upon for such termination. If
Executive’s employment under this Agreement is terminated by
the Company for Cause before the last day of any calendar month,
Executive shall be entitled to receive as compensation for such
calendar month, only the Base Salary set forth in Section 4.1
prorated to the date of termination on the basis of a 30-day
calendar month, and will forfeit any claims to a bonus or other
compensation or benefits. Grounds for the Company to terminate this
Agreement for “Cause” shall include only the occurrence
of any of the following events:
4.1.1 Executive’s willful
misconduct or gross negligence in the performance of his duties
hereunder;
4.1.2 Executive’s willful
failure or refusal to perform in the usual manner at the usual time
those duties which he regularly and routinely performs in
connection with the business of the Company or such other duties
reasonably related to the capacity in which he is employed
hereunder which may be assigned to him by the Company’s Board
of Directors, if such failure or refusal has not been substantially
cured to the satisfaction of the Company’s Board of Directors
within thirty (30) days after written notice of such failure
or refusal has been given by the Company to Executive;
4.1.3 Executive’s performance
of any material action when specifically and reasonably instructed
not to do so by the Company’s Board of Directors;
4.1.4 Executive engaging or in any
manner participating in any activity which is directly competitive
with or intentionally injurious to the Company;
4.1.5 Executive’s commission
of any fraud, or use or appropriation for his personal use or
benefit of any funds, properties or opportunities of the Company
not authorized by the Company’s Board of Directors to be so
used or appropriated; or
4.1.6 Executive’s conviction
of any felony involving moral turpitude; or
4.1.7 Executive’s willful or
grossly negligent violation of the Company’s Code of
Ethics.
For this purpose of this definition,
no act or failure to act by the Executive shall be considered
“willful” or “grossly negligent” if the
Executive acted (or failed to act) in good faith with the
reasonable belief that his actions or omissions were in the
Company’s best interest.
Any notice of termination given
pursuant to Section 4.1 shall effect termination as of the
date specified in such notice, or in the event no such date is
specified, on the last day of the month in which such notice is
delivered.
4.2 Termination Without Cause
. The Company may voluntarily terminate this Agreement, and
Executive’s employment, without Cause by giving written
notice to Executive. Any such notice shall specify the exact date
of termination (the “Termination Date”). If
Executive’s employment under this Agreement is terminated by
the Company without Cause (as defined herein), Executive shall be
entitled to receive severance payments in an amount equal to the
higher of (A) his Base Salary at the rate currently being paid
as of the Termination Date for an additional twelve
(12) months of service as an employee, or (B) $300,000
(with such severance payments being paid over the twelve
(12) months following such termination in accordance with the
Company’s general payroll practices, as and when such amounts
would have been paid had Executive’s employment not been
terminated). The Company also agrees to provide Executive with the
same level of health coverage and benefits as in effect for
Executive (and his eligible dependants) on the day immediately
preceding the Termination Date; provided, however, that
(1) Executive constitutes a qualified beneficiary, as defined
in Section 4980(B)(g)(1) of the Code; and (2) Executive
elects continuation coverage pursuant to the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended
(“COBRA”), within the time prescribed pursuant to
COBRA. The Company will continue to provide such continuation
coverage through the earlier of (A) the date twelve
(12) months after the Termination Date, or (B) the date
upon which the Executive and Executive’s eligible dependents
become covered under another health plan. Executive will thereafter
be responsible for the payment of COBRA premiums (including,
without limitation, all administrative expenses) for the remaining
COBRA period. Notwithstanding the foregoing, Executive shall not be
entitled to any options granted to Executive to purchase
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