EXHIBIT
10.22


 


DIGIRAD CORPORATION 2004
STOCK INCENTIVE PLAN


 


NOTICE OF STOCK OPTION AWARD


 


	
  Grantee’s Name
  and Address:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  



 


You (the “Grantee”) have been granted 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 2004 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.


 


	
  Award Number

  	
   

  
	
   

  	
   

  
	
  Date of Award

  	
   

  
	
   

  	
   

  
	
  Vesting
  Commencement Date

  	
   

  
	
   

  	
   

  
	
  Exercise Price
  per Share

  	
  $

  
	
   

  	
   

  
	
  Total Number of
  Shares Subject

  to the Option (the “Shares”)

  	
   

  
	
   

  	
   

  
	
  Total Exercise
  Price

  	
  $

  
	
   

  	
   

  
	
  Type of Option:

  	
  Non-Qualified
  Stock Option

  
	
   

  	
   

  
	
  Expiration Date:

  	
   

  
	
   

  	
   

  
	
  Post-Termination
  Exercise Period:

  	
  Three (3) Months

  



 


Vesting Schedule:


 


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:


 


[New Hires:  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.]


 


[Refresher Grants:  1/48 of the Shares subject to the Option
shall vest on each monthly anniversary of the Vesting Commencement Date.]


 


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.


 


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 


 


1





















 


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:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					



 


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’S STATUS IS AT WILL.


 


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:

  	
   

  	
   

  
	
   

  	
   

  	
  Grantee

  	
   

  



 


2





















 


Award Number: 
                         


 


 


DIGIRAD CORPORATION 2004
STOCK INCENTIVE PLAN


 


STOCK OPTION AWARD AGREEMENT


 


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 2004 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 intended to qualify as a Non-Qualified
Stock Option and not as an Incentive Stock Option as defined in Section 422
of the Code.


 


2.                                       Exercise
of Option.


 


(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 11 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 3(d), below.


 


(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 


 


1





















 


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 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


 


2





















 


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 6 and 7 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.


 


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.


 


3





















 


(a)                                  Exercise
of Non-Qualified Stock Option.  On
exercise of a Non-Qualified Stock 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.  In the case of a
Non-Qualified Stock Option, if Shares 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 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 


 


4





















 


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


 


5





















 


EXHIBIT A


 


DIGIRAD CORPORATION 2004
STOCK INCENTIVE PLAN


 


EXERCISE NOTICE


 


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 2004 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 10 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 3(d)
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.


 


1





















 


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.


 


2





















 


	
  Submitted by:

  	
  Accepted by:

  
	
   

  	
   

  
	
  GRANTEE:

  	
  DIGIRAD CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
  (Signature)

  	
   

  	
   

  
						



 


	
  Address:

  	
  Address:

  
	
   

  	
   

  
	
   

  	
   

  	
  13950 Stowe Drive 

  
	
   

  	
   

  	
  Poway, California 92064-8803

  



 


3