Exhibit
10.1
EXECUTIVE
EMPLOYMENT AGREEMENT
THIS
EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is
made and entered into effective as of February 7, 2009 by and
between Digirad Corporation, a Delaware Corporation (the
“Company”) and Richard Slansky
(“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:
1.1
Title/Responsibilities . Executive shall serve as
Chief Financial Officer of the Company and each of its subsidiary
companies, Digirad Imaging Solutions, Inc. (“DIS”) and
Digirad Ultrascan Solutions, Inc.
(“DUS”). 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 Financial Officer of the Company, and
as Chief Financial Officer of DIS and DUS, 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 that is publicly traded. 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.
2.1
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.
3.1
Base Salary. Beginning on or before March 9,
2009 Executive commences his duties as the Company’s Chief
Financial Officer (the “Start Date”), the Company shall
pay Executive a salary (the “Base Salary”) of $9,423.08
paid bi-weekly ($245,000 on an annual equivalence), payable 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 be granted,
effective as of March 9, 2009, a stock option granting Executive
the right to purchase 225,000 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. Twenty-five percent (25%) of the shares subject
to the option shall vest and become exercisable on the one (1) year
anniversary of the date of grant, and one forty-eighth (1/48
th
) of
the shares subject to the option shall vest each become exercisable
each month thereafter on the same day of the month, 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.
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 or Chief Executive Officer after
discussion and consultant with Executive. For the 2009
calendar year only, the annual performance bonus shall have a
target value of at least forty percent (40%) of Base
Salary. The Board of Directors or the Compensation
Committee of the Board of Directors, as applicable, in its sole
discretion, shall 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 sixteen (16) 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, if proportional to paid-time off adjustments then made as
to all the Company’s other executive officers.
3.3.4
Expense Reimbursement . The Company may 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.
4.1
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, all
accrued but unused paid-time off plus 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, except as provided by
law. 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 or Resignation for Good Reason
.
4.2.1 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), or if Executive resigns for Good Reason (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
six (6) months of service as an employee, or (B) $122,500 (with
such severance payments being paid over the six (6) 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 six (6) 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 exercise any options granted to Executive to
purchase shares of the Company’s stock that are unvested at
the time of such termination. The severance payments provided for
in this paragraph shall be in lieu of, and not in addition to,
severance, if any, payable under any other plan or policy now in
effect or adopted or modified from time to time by the
Company. Notwithstanding anything in this agreement to
the contrary, Executive’s right to receive severance pay is
conditi
