and $5,000, respectively. All committee members will receive $1,000 per committee meeting attended.
Item 5.02. Departure of Directors or Certain
Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On February 6,
2008, the Board of Directors of the Company approved the salaries to be paid to the Companys executive officers for the 2008 fiscal year and adopted the Companys 2008 Executive Bonus Plan for the 2008 fiscal year (the 2008 Bonus
Plan).
For the 2008 fiscal year, the base salaries for Mark Casner, the President and Chief Executive Officer of the Company, Todd
Clyde, the Executive Vice President and Chief Financial Officer of the Company, Michael Keenan, the President of the Companys wholly-owned subsidiary, Digirad Imaging Solutions, Inc., and Marc Shapiro, the Senior Vice President of Human
Resources, will be increased to $335,000, $270,000, $250,000 and $210,000, respectively.
Under the terms of the 2008 Bonus Plan, the
Company will create a bonus pool payable to the Companys executive officers upon the achievement of certain revenue and net income goals. Bonuses shall be payable if the Company has positive net income and the Companys revenue is greater
than or equal to $85,433,000 for the 2008 fiscal year. Bonuses shall also be payable if the Companys net income, excluding stock-based compensation expense, is greater than or equal to $1,851,000 for the 2008 fiscal year. Lesser individual
bonus awards are payable at increments of 95% and 98% of the revenue and net income goals, as revenue and net income meets each such level. If the Companys revenue and net income goals are achieved, the bonus payable to Mr. Casner,
Mr. Clyde, Mr. Keenan and Mr. Shapiro shall be $202,000, $121,500, $112,500 and $75,600, respectively. If the Company exceeds 105% of its revenue and net income goals, then additional bonuses shall be payable to Mr. Casner,
Mr. Clyde, Mr. Keenan and Mr. Shapiro in the amount of $50,000, $24,000, $24,000 and $20,000, respectively.
The Company
also approved a grant of stock options pursuant to the 2004 Stock Incentive Plan to Mr. Casner, Mr. Clyde, Mr. Keenan and Mr. Shapiro in the amounts of 75,000, 40,000, 45,000 and 15,000, respectively. The options shall vest over
a four-year period in 48 monthly increments and be exercisable subject to optionee continuing to be a service provider on each such date.
The Board of Directors had discretion to pay up to $40,000 per executive officer for reaching personal goals regardless of whether the Company achieves its revenue or net income goals. For reaching personal goals in fiscal year 2007,
Mr. Casner, Mr. Clyde, Mr. Keenan and Mr. Shapiro earned discretionary cash bonuses in the amount of $25,000, $15,000, $15,000 and $10,000, respectively.
To the extent executive officers are eligible to receive a bonus under the 2008 Bonus Plan any bonus will be paid following the audit of the
Companys financial statements for the 2008 fiscal year.