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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
January 9, 2006
DIGIRAD CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 000-50789 33-0145723
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
13950 Stowe Drive
Poway, California 92064
(Address of principal executive offices, including zip code)
(858) 726-1600
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01. Entry into a Material Definitive Agreement.
As set forth in Section 5.02 below, effective January 15, 2006, the annual
compensation for Mark L. Casner, the new President and Chief Executive Officer
of Digirad Corporation (the "Company"), will be increased to $295,000, and he
was granted options, effective January 9, 2006, to purchase up to 35,000 shares
of common stock pursuant to the Company's 2004 Stock Incentive Plan, which
options will vest in equal monthly increments over a four year period and have a
per share exercise price equal to the closing price per share of the Company's
common stock as quoted on the Nasdaq National Market on January 9, 2006. Mr.
Casner is also eligible to participate in the Company's management incentive
bonus program for 2006.
The description of the employment arrangement in this current report is
qualified in its entirety by reference to Mr. Casner's written employment
agreement that will be filed as an exhibit to the Company's Annual Report on
Form 10-K for the fiscal year ending December 31, 2005.
In addition, effective January 15, 2006, pursuant to an oral employment
agreement, the annual compensation for Peter Sullivan, the Company's new
President, Digirad Imaging Products, will be increased to $230,000, and he was
granted options, effective January 9, 2006, to purchase up to 25,000 shares of
common stock pursuant to the Company's 2004 Stock Incentive Plan, which options
will vest in equal monthly increments over a four year period and have a per
share exercise price equal to the closing price per share of the Company's
common stock as quoted on the Nasdaq National Market on January 9, 2006. Mr.
Sullivan is also eligible to participate in the Company's management incentive
bonus program for 2006.
In addition, pursuant to an oral employment agreement, effective January 15,
2006, the annual compensation for Todd Clyde, the Company's Chief Financial
Officer, will be increased to $240,000.
All other terms of such officers' employment arrangements are unchanged.
In connection with Gerhard Burbach's resignation as the Company's President and
Chief Executive Officer as set forth in Section 5.02 below, Mr. Burbach will
cease to receive compensation as an officer of the Company effective January 15,
2006. As a non-employee director of the Company, Mr. Burbach will receive the
same compensation paid to all non-employee directors, prorated to January 15,
2006.
Item 1.02. Termination of a Material Definitive Agreement.
As set forth in Section 5.02 below, Gerhard Burbach's will resign as the
Company's President and Chief Executive Officer effective as of January 15,
2006. Mr. Burbach was employed by the Company pursuant to an oral, at-will
employment arrangement described in the Current Report on Form 8-K filed by the
Company with the Securities and Exchange Commission on April 22, 2005. Such
arrangement shall be terminated effective as of January 15, 2006. Mr. Burbach
will remain a member of the Company's Board of Directors.
Item 5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Principal Officers.
On January 10, 2006, the Company announced that Gerhard Burbach will resign as
the Company's President and Chief Executive Officer effective as of January 15,
2006. Mr. Burbach will remain a member of the Company's Board of Directors.
The Company also announced that Mark L. Casner will replace Mr. Burbach as the
Company's President and Chief Executive Officer, effective as of January 15,
2006. In addition, Mr. Casner will be appointed to the Company's Board of
Directors, effective as of January 15, 2006, to serve until his successor is
duly elected and qualified. Mr. Casner will remain as President of Digirad
Imaging Solutions, Inc. ("DIS"), a wholly-owned subsidiary of the Company, a
position he has held since September 2005. Prior to joining DIS, Mr. Casner, age
50, was President of DMS Imaging, a mobile imaging company offering MRI, CT,
PET/CT and nuclear imaging services through its fleet of 200 systems. From 1995
through 2003 he was a member of Radiologix and its predecessor organizations,
most recently as the Senior Vice President of Operations. Mr. Casner holds a BA
from Miami University of Ohio, an MA from the University of Maryland, and an MBA
from Marymount University. As President and Chief Executive Officer of the
Company and President of DIS, Mr. Casner will be paid a new annual base salary
of $295,000, and was granted options on January 9, 2006, to purchase up to
35,000 shares of common stock pursuant to the Company's 2004 Stock Incentive
Plan, which options will vest in equal monthly increments over a four year
period and have a per share exercise price equal to the closing price per share
of the Company's common stock as quoted on the Nasdaq National Market on January
9, 2006. Mr. Casner is also eligible to participate in the Company's management
incentive bonus program for 2006.
The Company also announced that, effective January 15, 2006, Peter Sullivan will
be appointed President, Digirad Imaging Products, reporting directly to Mr.
Casner. In such capacity, Mr. Sullivan will be paid a new annual base salary of
$230,000, and was granted options on January 9, 2006, to purchase up to 25,000
shares of common stock pursuant to the Company's 2004 Stock Incentive Plan,
which options will vest in equal monthly increments over a four year period and
have a per share exercise price equal to the closing price per share of the
Company's common stock as quoted on the Nasdaq National Market on January 9,
2006. Mr. Sullivan is also eligible to participate in the Company's management
incentive bonus program for 2006.
A copy of the press release announcing Mr. Burbach's termination and Mr.
Casner's and Mr. Sullivan's appointments is furnished as Exhibit 99.1 to this
Current Report on Form 8-K. The press release and the information therein are
being furnished and shall not be deemed to be "filed" for purposes of Section 18
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
otherwise subject to the liability of that section, nor shall they be deemed
incorporated by reference in any filing under the Securities Act of 1933, as
amended, or the Exchange Act, except as expressly set forth by specific
reference in such a filing.
Item 9.01. Financial Statements and Exhibits
(c) Exhibits.
Exhibit No. Description
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99.1 Press Release dated January 10, 2006.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
DIGIRAD CORPORATION
By:/s/ Todd P. Clyde
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Todd P. Clyde
Chief Financial Officer
Date: January 10, 2006