Exhibit 10.2
DIGIRAD CORPORATION
2005 INDUCEMENT STOCK INCENTIVE PLAN
NOTICE OF STOCK OPTION AWARD
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Grantee's Name and Address:
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You (the "Grantee") have been granted, as an inducement material to your
decision to accept employment with Digirad Corporation (the "Company"), an
option to purchase shares of Common Stock, subject to the terms and conditions
of this Notice of Stock Option Award (the "Notice"), the Digirad Corporation
2005 Inducement Stock Incentive Plan, as amended from time to time (the "Plan")
and the Stock Option Award Agreement (the "Option Agreement") attached hereto,
as follows. Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Notice.
Date of Award
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Vesting Commencement Date
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Exercise Price per Share
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Total Number of Shares Subject
to the Option (the "Shares")
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Expiration Date:
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Post-Termination Exercise Period: Three (3) Months
Vesting Schedule:
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Subject to the Grantee's Continuous Service and other limitations set forth
in this Notice, the Plan and the Option Agreement, the Option may be exercised,
in whole or in part, in accordance with the following schedule:
25% of the Shares subject to the Option shall vest twelve months after the
Vesting Commencement Date, and 1/36 of the remaining Shares subject to the
Option shall vest on each monthly anniversary of the Vesting Commencement Date
thereafter.
During any authorized leave of absence, the vesting of the Option as
provided in this schedule shall be suspended after the leave of absence exceeds
a period of ninety (90) days. Vesting of the Option shall resume upon the
Grantee's termination of the leave of absence and return to service to the
Company or a Related Entity. The Vesting Schedule of the Option shall be
extended by the length of the suspension.
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In the event of the Grantee's change in status from Employee to Consultant
or from an Employee whose customary employment is 20 hours or more per week to
an Employee whose customary employment is fewer than 20 hours per week, vesting
of the Option shall continue only to the extent determined by the Administrator
as of such change in status.
In the event of termination of the Grantee's Continuous Service for Cause,
the Grantee's right to exercise the Option shall terminate concurrently with the
termination of the Grantee's Continuous Service, except as otherwise determined
by the Administrator.
IN WITNESS WHEREOF, the Company and the Grantee have executed this Notice
and agree that the Option is to be governed by the terms and conditions of this
Notice, the Plan, and the Option Agreement.
Digirad Corporation,
a Delaware corporation
By:
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Title: President and CEO
THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL
VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE'S CONTINUOUS SERVICE (NOT
THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR ACQUIRING SHARES
HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS
NOTICE, THE OPTION AGREEMENT, OR THE PLAN SHALL CONFER UPON THE GRANTEE ANY
RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF THE GRANTEE'S CONTINUOUS
SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE'S RIGHT OR THE RIGHT
OF THE COMPANY OR RELATED ENTITY TO WHICH THE GRANTEE PROVIDES SERVICES TO
TERMINATE THE GRANTEE'S CONTINUOUS SERVICE, WITH OR WITHOUT CAUSE, AND WITH OR
WITHOUT NOTICE. THE GRANTEE ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS A WRITTEN
EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY, THE GRANTEE SHALL BE
CONSIDERED AN AT-WILL EMPLOYEE.
The Grantee acknowledges receipt of a copy of the Plan and the Option
Agreement, and represents that he or she is familiar with the terms and
provisions thereof, and hereby accepts the Option subject to all of the terms
and provisions hereof and thereof. The Grantee has reviewed this Notice, the
Plan, and the Option Agreement in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Notice, and fully
understands all provisions of this Notice, the Plan and the Option Agreement.
The Grantee hereby agrees that all questions of interpretation and
administration relating to this Notice, the Plan and the Option Agreement shall
be resolved by the Administrator in accordance with Section 13 of the Option
Agreement. The Grantee further agrees to the venue selection and waiver of a
jury trial in accordance with Section 14 of the Option Agreement. The Grantee
further agrees to notify the Company upon any change in the residence address
indicated in this Notice.
Dated: Signed:
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Grantee
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Award Number: ___________
DIGIRAD CORPORATION
2005 INDUCEMENT STOCK INCENTIVE PLAN
STOCK OPTION AWARD AGREEMENT
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1. Grant of Option. Digirad Corporation, a Delaware corporation (the
"Company"), hereby grants to the Grantee (the "Grantee") named in the Notice of
Stock Option Award (the "Notice"), an option (the "Option") to purchase the
Total Number of Shares of Common Stock subject to the Option (the "Shares") set
forth in the Notice, at the Exercise Price per Share set forth in the Notice
(the "Exercise Price") subject to the terms and provisions of the Notice, this
Stock Option Award Agreement (the "Option Agreement") and the Company's 2005
Inducement Stock Incentive Plan, as amended from time to time (the "Plan"),
which are incorporated herein by reference. Unless otherwise defined herein, the
terms defined in the Plan shall have the same defined meanings in this Option
Agreement.
The Option is a non-qualified stock option and is not intended to
qualify as an incentive stock option as defined in Section 422 of the Code.
2. Exercise of Option.
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a) Right to Exercise. The Option shall be exercisable during its
term in accordance with the Vesting Schedule set out in the Notice and with
the applicable provisions of the Plan and this Option Agreement. The Option
shall be subject to the provisions of Section 0 of the Plan relating to the
exercisability or termination of the Option in the event of a Corporate
Transaction or Change in Control. The Grantee shall be subject to
reasonable limitations on the number of requested exercises during any
monthly or weekly period as determined by the Administrator. In no event
shall the Company issue fractional Shares.
b) Method of Exercise. The Option shall be exercisable by delivery
of an exercise notice (a form of which is attached as Exhibit A) or by such
other procedure as specified from time to time by the Administrator which
shall state the election to exercise the Option, the whole number of Shares
in respect of which the Option is being exercised, and such other
provisions as may be required by the Administrator. The exercise notice
shall be delivered in person, by certified mail, or by such other method
(including electronic transmission) as determined from time to time by the
Administrator to the Company accompanied by payment of the Exercise Price.
The Option shall be deemed to be exercised upon receipt by the Company of
such notice accompanied by the Exercise Price, which, to the extent
selected, shall be deemed to be satisfied by use of the broker-dealer sale
and remittance procedure to pay the Exercise Price provided in Section 0,
below.
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c) Taxes. No Shares will be delivered to the Grantee or other person
pursuant to the exercise of the Option until the Grantee or other person
has made arrangements acceptable to the Administrator for the satisfaction
of applicable income tax and employment tax withholding obligations,
including,without limitation, such other tax obligations of the Grantee
incident to the receipt of Shares. Upon exercise of the Option, the Company
or the Grantee's employer may offset or withhold (from any amount owed by
the Company or the Grantee's employer to the Grantee) or collect from the
Grantee or other person an amount sufficient to satisfy such tax
withholding obligations.
3. Method of Payment. Payment of the Exercise Price shall be made by any
of the following, or a combination thereof, at the election of the Grantee;
provided, however, that such exercise method does not then violate any
Applicable Law and, provided further, that the portion of the Exercise Price
equal to the par value of the Shares must be paid in cash or other legal
consideration permitted by the Delaware General Corporation Law:
a) cash;
b) check;
c) surrender of Shares or delivery of a properly executed form of
attestation of ownership of Shares as the Administrator may require which
have a Fair Market Value on the date of surrender or attestation equal to
the aggregate Exercise Price of the Shares as to which the Option is being
exercised, provided, however, that Shares acquired under the Plan or any
other equity compensation plan or agreement of the Company must have been
held by the Grantee for a period of more than six (6) months (and not used
for another Award exercise by attestation during such period); or
d) payment through a broker-dealer sale and remittance procedure
pursuant to which the Grantee (i) shall provide written instructions to a
Company-designated brokerage firm to effect the immediate sale of some or
all of the purchased Shares and remit to the Company sufficient funds to
cover the aggregate exercise price payable for the purchased Shares and
(ii) shall provide written directives to the Company to deliver the
certificates for the purchased Shares directly to such brokerage firm in
order to complete the sale transaction.
4. Restrictions on Exercise. The Option may not be exercised if the
issuance of the Shares subject to the Option upon such exercise would constitute
a violation of any Applicable Laws. If the exercise of the Option within the
applicable time periods set forth in Section 6, 7 and 8 of this Option Agreement
is prevented by the provisions of this Section 5, the Option shall remain
exercisable until one (1) month after the date the Grantee is notified by the
Company that the Option is exercisable, but in any event no later than the
Expiration Date set forth in the Notice.
5. Termination or Change of Continuous Service. In the event the
Grantee's Continuous Service terminates, other than for Cause, the Grantee may,
but only during the Post-Termination Exercise Period, exercise the portion of
the Option that was vested at the date of such termination (the "Termination
Date"). The Post-Termination Exercise Period shall commence on the Termination
Date. In the event of termination of the Grantee's Continuous Service for Cause,
the Grantee's right to exercise the Option shall, except as otherwise determined
by the Administrator, terminate concurrently with the termination of the
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Grantee's Continuous Service (also the "Termination Date"). In no event,
however, shall the Option be exercised later than the Expiration Date set forth
in the Notice. In the event of the Grantee's change in status from Employee,
Director or Consultant to any other status of Employee, Director or Consultant,
the Option shall remain in effect. In the event of the Grantee's change in
status from Employee to Director or Consultant, vesting of the Option shall
continue only to the extent determined by the Administrator as of such change in
status. Except as provided in Sections 0 and 0 below, to the extent that the
Option was unvested on the Termination Date, or if the Grantee does not exercise
the vested portion of the Option within the Post-Termination Exercise Period,
the Option shall terminate.
6. Disability of Grantee. In the event the Grantee's Continuous Service
terminates as a result of his or her Disability, the Grantee may, but only
within twelve (12) months commencing on the Termination Date (but in no event
later than the Expiration Date), exercise the portion of the Option that was
vested on the Termination Date. To the extent that the Option was unvested on
the Termination Date, or if the Grantee does not exercise the vested portion of
the Option within the time specified herein, the Option shall terminate.
7. Death of Grantee. In the event of the termination of the Grantee's
Continuous Service as a result of his or her death, or in the event of the
Grantee's death during the Post-Termination Exercise Period or during the twelve
(12) month period following the Grantee's termination of Continuous Service as a
result of his or her Disability, the person who acquired the right to exercise
the Option pursuant to Section 8 may exercise the portion of the Option that was
vested at the date of termination within twelve (12) months commencing on the
date of death (but in no event later than the Expiration Date). To the extent
that the Option was unvested on the date of death, or if the vested portion of
the Option is not exercised within the time specified herein, the Option shall
terminate.
8. Transferability of Option. The Option may not be transferred in any
manner other than by will or by the laws of descent and distribution, provided,
however, that the Option may be transferred during the lifetime of the Grantee
to the extent and in the manner authorized by the Administrator. Notwithstanding
the foregoing, the Grantee may designate one or more beneficiaries of the
Grantee's Option in the event of the Grantee's death on a beneficiary
designation form provided by the Administrator. Following the death of the
Grantee, the Option, to the extent provided in Section 7, may be exercised (a)
by the person or persons designated under the deceased Grantee's beneficiary
designation or (b) in the absence of an effectively designated beneficiary, by
the Grantee's legal representative or by any person empowered to do so under the
deceased Grantee's will or under the then applicable laws of descent and
distribution. The terms of the Option shall be binding upon the executors,
administrators, heirs, successors and transferees of the Grantee.
9. Term of Option. The Option must be exercised no later than the
Expiration Date set forth in the Notice or such earlier date as otherwise
provided herein. After the Expiration Date or such earlier date, the Option
shall be of no further force or effect and may not be exercised.
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10. Tax Consequences. Set forth below is a brief summary as of the date of
this Option Agreement of some of the federal tax consequences of exercise of the
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE GRANTEE SHOULD
CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES.
a) Exercise of Option. On exercise of the Option, the Grantee will
be treated as having received compensation income (taxable at ordinary
income tax rates) equal to the excess, if any, of the Fair Market Value of
the Shares on the date of exercise over the Exercise Price. If the Grantee
is an Employee or a former Employee, the Company will be required to
withhold from the Grantee's compensation or collect from the Grantee and
pay to the applicable taxing authorities an amount in cash equal to a
percentage of this compensation income at the time of exercise, and may
refuse to honor the exercise and refuse to deliver Shares if such
withholding amounts are not delivered at the time of exercise.
b) Disposition of Shares. If the Shares received upon exercise of
the Option are held for more than one year, any gain realized on
disposition of the Shares will be treated as long-term capital gain for
federal income tax purposes.
11. Entire Agreement: Governing Law. The Notice, the Plan and this Option
Agreement constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee's interest except by
means of a writing signed by the Company and the Grantee. Nothing in the Notice,
the Plan and this Option Agreement (except as expressly provided therein) is
intended to confer any rights or remedies on any persons other than the parties.
The Notice, the Plan and this Option Agreement are to be construed in accordance
with and governed by the internal laws of the State of California without giving
effect to any choice of law rule that would cause the application of the laws of
any jurisdiction other than the internal laws of the State of California to the
rights and duties of the parties. Should any provision of the Notice, the Plan
or this Option Agreement be determined to be illegal or unenforceable, such
provision shall be enforced to the fullest extent allowed by law and the other
provisions shall nevertheless remain effective and shall remain enforceable.
12. Construction. The captions used in the Notice and this Option
Agreement are inserted for convenience and shall not be deemed a part of the
Option for construction or interpretation. Except when otherwise indicated by
the context, the singular shall include the plural and the plural shall include
the singular. Use of the term "or" is not intended to be exclusive, unless the
context clearly requires otherwise.
13. Administration and Interpretation. Any question or dispute regarding
the administration or interpretation of the Notice, the Plan or this Option
Agreement shall be submitted by the Grantee or by the Company to the
Administrator. The resolution of such question or dispute by the Administrator
shall be final and binding on all persons.
14. Venue and Waiver of Jury Trial. The Company, the Grantee, and the
Grantee's assignees pursuant to Section 8 (the "parties") agree that any suit,
action, or proceeding arising out of or relating to the Notice, the Plan or this
Option Agreement shall be brought in the United States District Court for the
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Southern District of California (or should such court lack jurisdiction to hear
such action, suit or proceeding, in a California state court in the County of
San Diego) and that the parties shall submit to the jurisdiction of such court.
The parties irrevocably waive, to the fullest extent permitted by law, any
objection the party may have to the laying of venue for any such suit, action or
proceeding brought in such court. THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT
THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING. If
any one or more provisions of this Section 14 shall for any reason be held
invalid or unenforceable, it is the specific intent of the parties that such
provisions shall be modified to the minimum extent necessary to make it or its
application valid and enforceable.
15. Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery, upon
deposit for delivery by an internationally recognized express mail courier
service or upon deposit in the United States mail by certified mail (if the
parties are within the United States), with postage and fees prepaid, addressed
to the other party at its address as shown in these instruments, or to such
other address as such party may designate in writing from time to time to the
other party.
END OF AGREEMENT
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EXHIBIT A
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DIGIRAD CORPORATION
2005 INDUCEMENT STOCK INCENTIVE PLAN
EXERCISE NOTICE
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Digirad Corporation
13950 Stowe Drive
Poway, California 92064-8803
Attention: Secretary
1. Exercise of Option. Effective as of today, ______________, ___ the
undersigned (the "Grantee") hereby elects to exercise the Grantee's option to
purchase ___________ shares of the Common Stock (the "Shares") of Digirad
Corporation (the "Company") under and pursuant to the Company's 2005 Inducement
Stock Incentive Plan, as amended from time to time (the "Plan") and the
Non-Qualified Stock Option Award Agreement (the "Option Agreement") and Notice
of Stock Option Award (the "Notice") dated ______________, ________. Unless
otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Exercise Notice.
2. Representations of the Grantee. The Grantee acknowledges that the
Grantee has received, read and understood the Notice, the Plan and the Option
Agreement and agrees to abide by and be bound by their terms and conditions.
3. Rights as Stockholder. Until the stock certificate evidencing such
Shares is issued (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company), no right to vote
or receive dividends or any other rights as a stockholder shall exist with
respect to the Shares, notwithstanding the exercise of the Option. The Company
shall issue (or cause to be issued) such stock certificate promptly after the
Option is exercised. No adjustment will be made for a dividend or other right
for which the record date is prior to the date the stock certificate is issued,
except as provided in Section 0 of the Plan.
4. Delivery of Payment. The Grantee herewith delivers to the Company the
full Exercise Price for the Shares, which, to the extent selected, shall be
deemed to be satisfied by use of the broker-dealer sale and remittance procedure
to pay the Exercise Price provided in Section 0 of the Option Agreement.
5. Tax Consultation. The Grantee understands that the Grantee may suffer
adverse tax consequences as a result of the Grantee's purchase or disposition of
the Shares. The Grantee represents that the Grantee has consulted with any tax
consultants the Grantee deems advisable in connection with the purchase or
disposition of the Shares and that the Grantee is not relying on the Company for
any tax advice.
6. Taxes. The Grantee agrees to satisfy all applicable foreign, federal,
state and local income and employment tax withholding obligations and herewith
delivers to the Company the full amount of such obligations or has made
arrangements acceptable to the Company to satisfy such obligations.
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7. Successors and Assigns. The Company may assign any of its rights under
this Exercise Notice to single or multiple assignees, and this agreement shall
inure to the benefit of the successors and assigns of the Company. This Exercise
Notice shall be binding upon the Grantee and his or her heirs, executors,
administrators, successors and assigns.
8. Construction. The captions used in this Exercise Notice are inserted for
convenience and shall not be deemed a part of this agreement for construction or
interpretation. Except when otherwise indicated by the context, the singular
shall include the plural and the plural shall include the singular. Use of the
term "or" is not intended to be exclusive, unless the context clearly requires
otherwise.
9. Administration and Interpretation. The Grantee hereby agrees that any
question or dispute regarding the administration or interpretation of this
Exercise Notice shall be submitted by the Grantee or by the Company to the
Administrator. The resolution of such question or dispute by the Administrator
shall be final and binding on all persons.
10. Governing Law; Severability. This Exercise Notice is to be construed in
accordance with and governed by the internal laws of the State of California
without giving effect to any choice of law rule that would cause the application
of the laws of any jurisdiction other than the internal laws of the State of
California to the rights and duties of the parties. Should any provision of this
Exercise Notice be determined by a court of law to be illegal or unenforceable,
such provision shall be enforced to the fullest extent allowed by law and the
other provisions shall nevertheless remain effective and shall remain
enforceable.
11. Notices. Any notice required or permitted hereunder shall be given in
writing and shall be deemed effectively given upon personal delivery, upon
deposit for delivery by an internationally recognized express mail courier
service or upon deposit in the United States mail by certified mail (if the
parties are within the United States), with postage and fees prepaid, addressed
to the other party at its address as shown below beneath its signature, or to
such other address as such party may designate in writing from time to time to
the other party.
12. Further Instruments. The parties agree to execute such further
instruments and to take such further action as may be reasonably necessary to
carry out the purposes and intent of this agreement.
13. Entire Agreement. The Notice, the Plan and the Option Agreement are
incorporated herein by reference and together with this Exercise Notice
constitute the entire agreement of the parties with respect to the subject
matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee's interest except by
means of a writing signed by the Company and the Grantee. Nothing in the Notice,
the Plan, the Option Agreement and this Exercise Notice (except as expressly
provided therein) is intended to confer any rights or remedies on any persons
other than the parties.
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Submitted by: Accepted by:
GRANTEE: DIGIRAD CORPORATION
By:
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Title:
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(Signature)
Address: Address:
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- ----------------------------------- 13950 Stowe Drive
- ----------------------------------- Poway, California 92064-8803
SSN:
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