2006
      STOCK INCENTIVE PLAN

    


    ARTICLE
      ONE

    


    GENERAL
      PROVISIONS

    


    I. PURPOSE
      OF THE PLAN

    


    This
      2006
      Stock Incentive Plan is intended to promote the interests of Positron
      Corporation (the "Corporation") by providing eligible persons with the
      opportunity to acquire a proprietary interest, or otherwise increase their
      proprietary interest, in the Corporation as an incentive for them to remain
      in
      the Service of the Corporation.

    


    Capitalized
      terms shall have the meanings assigned to such terms in the attached
      Appendix.

    


    II. STRUCTURE
      OF THE PLAN

    


    A. The
      Plan
      shall be divided into two separate equity programs:

    


    
      	
            	-	
              the
                Discretionary Option Grant Program under which eligible persons may,
                at
                the discretion of the Plan Administrator, be granted options to purchase
                shares of Common Stock and stock appreciation rights;
                and

            


    

    


    
      	
            	-	
              the
                Stock Issuance Program under which eligible persons may, at the discretion
                of the Plan Administrator, be issued shares of Common Stock directly,
                either through the immediate purchase of such shares or as a bonus
                for
                services rendered the Corporation (or any Parent or
                Subsidiary).

            


    

    


    B. The
      provisions of Articles One and Four shall apply to all equity programs under
      the
      Plan and shall govern the interests of all persons under the Plan.

    


    III. ADMINISTRATION
      OF THE PLAN

    


    A. The
      Plan
      shall be administered by the Board or an Option Committee appointed by the
      Board. Should administration of the Plan be vested in an Option Committee,
      any
      discretionary option grants or stock issuances to members of the Option
      Committee must be authorized and approved by a disinterested majority of the
      Board.

    


    B. Members
      of the Option Committee shall serve for such period of time as the Board may
      determine and may be removed by the Board at any time.

    


    C. Each
      Plan
      Administrator shall, within the scope of its administrative functions under
      the
      Plan, have full power and authority (subject to the provisions of the Plan)
      to
      establish such rules and regulations as it may deem appropriate for proper
      administration of the Discretionary Option Grant and Stock Issuance Programs
      and
      to make such determinations under, and issue such interpretations of, the
      provisions of such programs and any outstanding options or stock issuances
      thereunder as it may deem necessary or advisable. Decisions of the Plan
      Administrator within the scope of its administrative functions under the Plan
      shall be final and binding on all parties who have an interest in the
      Discretionary Option Grant and Stock Issuance Programs under its jurisdiction
      or
      any option or stock issuance thereunder.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    D. Service
      on the Option Committee shall constitute service as a Board member, and members
      of such committee shall accordingly be entitled to full indemnification and
      reimbursement as Board members for their service on such committee. No member
      of
      the Option Committee shall be liable for any act or omission made in good faith
      with respect to the Plan or any option grants or stock issuances under the
      Plan.

    


    IV. ELIGIBILITY

    


    A. The
      persons eligible to participate in the Discretionary Option Grant and Stock
      Issuance Programs are as follows:

    


    (i) Employees,

    


    (ii) Officers,
      members of the Board or the board of directors of any Parent or Subsidiary,
      and

    


    (iii) consultants
      and other independent advisors who provide services to the Corporation (or
      any
      Parent or Subsidiary).

    


    B. Each
      Plan
      Administrator shall, within the scope of its administrative jurisdiction under
      the Plan, have full authority to determine: (i) with respect to the option
      grants or stock appreciation rights under the Discretionary Option Grant
      Program, which eligible persons are to receive grants, the time or times when
      such grants are to be made, the number of shares to be covered by each such
      grant, the time or times when each option is to become exercisable, the vesting
      schedule (if any) applicable to the option shares and the maximum term for
      which
      the option is to remain outstanding; and (ii) with respect to stock issuances
      under the Stock Issuance Program, which eligible persons are to receive stock
      issuances, the time or times when such issuances are to be made, the number
      of
      shares to be issued to each Participant, the vesting schedule (if any)
      applicable to the issued shares and the consideration for such
      shares.

    


    C. The
      Plan
      Administrator shall have the absolute discretion either to grant options or
      stock appreciation rights in accordance with the Discretionary Option Grant
      Program or to effect stock issuances or grant share right awards in accordance
      with the Stock Issuance Program.

    


    V. STOCK
      SUBJECT TO THE PLAN

    


    A. The
      stock
      issuable under the Plan shall be shares of authorized but unissued or reacquired
      Common Stock, including shares repurchased by the Corporation on the open
      market. The maximum number of shares of Common Stock initially reserved for
      issuance over the term of the Plan shall not exceed five million
      (5,000,000) shares. 

    


    B. Shares
      of
      Common Stock subject to outstanding options shall be available for subsequent
      issuance under the Plan to the extent (i) those options expire or terminate
      for
      any reason prior to exercise in full or (ii) the options are canceled in
      accordance with the cancellation-regrant provisions of Article Two. Unvested
      shares issued under the Plan and subsequently canceled or repurchased by the
      Corporation at the original exercise or issue price paid per share, pursuant
      to
      the Corporation's repurchase rights under the Plan, shall be added back to
      the
      number of shares of Common Stock reserved for issuance under the Plan and shall
      accordingly be available for reissuance through one or more subsequent option
      grants or direct stock issuances under the Plan. In addition, should the
      exercise price of an option under the Plan be paid with shares of Common Stock
      or should shares of Common Stock otherwise issuable under the Plan be withheld
      by the Corporation in satisfaction of the withholding taxes incurred in
      connection with the exercise of an option or the vesting of a stock issuance
      under the Plan, then the number of shares of Common Stock available for issuance
      under the Plan shall be reduced only by the net number of shares of Common
      Stock
      issued to the holder of such option or stock issuance, and not by the gross
      number of shares for which the option is exercised or which vest under the
      stock
      issuance. However, shares of Common Stock underlying one or more stock
      appreciation rights exercised under Section V of Article Two of the Plan shall
      not be available for subsequent issuance under the Plan.

    


    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    C. If
      any
      change is made to the Common Stock by reason of any stock split, stock dividend,
      recapitalization, combination of shares, exchange of shares or other change
      affecting the outstanding Common Stock as a class without the Corporation's
      receipt of consideration, appropriate adjustments shall be made to: (i) the
      maximum number and/or class of securities issuable under the Plan; and (ii)
      the
      number and/or class of securities and the exercise price per share in effect
      under each outstanding option under the Plan. Such adjustments to the
      outstanding options are to be effected in a manner which shall preclude the
      enlargement or dilution of rights and benefits under such options. The
      adjustments determined by the Plan Administrator shall be final, binding and
      conclusive.

    


    ARTICLE
      TWO

    


    DISCRETIONARY
      OPTION GRANT PROGRAM

    


    I. OPTION
      TERMS

    


    Each
      option shall be evidenced by one or more documents in the form approved by
      the
      Plan Administrator; provided, however, that each such document shall comply
      with
      the terms specified below. 

    


    A. EXERCISE
      PRICE.

    


    1. The
      exercise price per share shall be fixed by the Plan Administrator.

    


    2. The
      exercise price shall become immediately due upon exercise of the option and
      may,
      subject to the provisions of Section I of Article Four and the documents
      evidencing the option, be payable in one or more of the forms specified
      below:

    


    (i) cash
      or
      check made payable to the Corporation, or

    


    (ii) shares
      of
      Common Stock held for the requisite period necessary to avoid a charge to the
      Corporation's earnings for financial reporting purposes and valued at Fair
      Market Value on the Exercise Date, or

    


    (iii) to
      the
      extent the sale complies with all applicable laws relating to the regulation
      and
      sale of securities, through a special sale and remittance procedure pursuant
      to
      which the Optionee shall concurrently provide irrevocable written instructions
      to: (a) a Corporation-designated brokerage firm to effect the immediate sale
      of
      the purchased shares and remit to the Corporation, out of the sale proceeds
      available on the settlement date, sufficient funds to cover the aggregate
      exercise price payable for the purchased shares plus all applicable Federal,
      state and local income and employment taxes required to be withheld by the
      Corporation by reason of such exercise; and (b) the Corporation to deliver
      the
      certificates for the purchased shares directly to such brokerage firm in order
      to complete the sale, or

    


    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    (iv) subject
      to such additional terms and conditions as the plan administrator shall
      determine, to have the number of shares deliverable to the option holder as
      a
      result of the exercise reduced by a number of shares sufficient to pay the
      amount the Corporation determines to be necessary to withhold for federal,
      state, local and other taxes as a result of the exercise of the option and,
      as
      long as no additional accounting expenses would result to the Corporation,
      to
      pay the exercise price of the option.

    


    Except
      to
      the extent such sale and remittance procedure is utilized, payment of the
      exercise price for the purchased shares must be made on the Exercise
      Date.

    


    B. EXERCISE
      AND TERM OF OPTIONS. Each option shall be exercisable at such time or times,
      during such period and for such number of shares as shall be determined by
      the
      Plan Administrator and set forth in the documents evidencing the option.
      However, no option shall have a term in excess of ten (10) years measured from
      the option grant date.

    


    C. EFFECT
      OF
      TERMINATION OF SERVICE.

    


    1. The
      following provisions shall govern the exercise of any options held by the
      Optionee at the time of cessation of Service or death:

    


    (i) Subject
      to subparagraph (iv) below, any option outstanding at the time of the
      Optionee's cessation of Service for any reason shall remain exercisable for
      such
      period of time thereafter as shall be determined by the Plan Administrator
      and
      set forth in the documents evidencing the option.

    


    (ii) Any
      option held by the Optionee at the time of death and exercisable in whole or
      in
      part at that time may be subsequently exercised by the personal representative
      of the Optionee's estate or by the person or persons to whom the option is
      transferred pursuant to the Optionee's will or in accordance with the laws
      of
      descent and distribution or by the Optionee's designated beneficiary or
      beneficiaries of that option.

    


    (iii) Except
      as
      otherwise determined in the discretion of the Plan Administrator either at
      the
      time the option is granted or at any time the option remains outstanding, should
      the Optionee's Service be terminated for Misconduct or should the Optionee
      otherwise engage in Misconduct while one or more options granted to the Optionee
      under this Article Two are outstanding, then all those options shall terminate
      immediately and cease to be outstanding.

    


    (iv) During
      the applicable post-Service exercise period, the option may not be exercised
      in
      the aggregate for more than the number of vested shares for which the option
      is
      exercisable on the date of the Optionee's cessation of Service. Upon the
      expiration of the applicable exercise period or (if earlier) upon the expiration
      of the option term, the option shall terminate and cease to be outstanding
      for
      any vested shares for which the option has not been exercised. However, the
      option shall, immediately upon the Optionee's cessation of Service, terminate
      and cease to be outstanding to the extent the option is not otherwise at that
      time exercisable for vested shares.

    


    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    2. The
      Plan
      Administrator shall have complete discretion, either at the time an option
      is
      granted or at any time while the option remains outstanding, to:

    


    (i) extend
      the period of time for which the option is to remain exercisable following
      the
      Optionee's cessation of Service from the limited exercise period otherwise
      in
      effect for that option to such greater period of time as the Plan Administrator
      shall deem appropriate, but in no event beyond the expiration of the option
      term, and/or

    


    (ii) permit
      the option to be exercised, during the applicable post-Service exercise period,
      not only with respect to the number of vested shares of Common Stock for which
      such option is exercisable at the time of the Optionee's cessation of Service
      but also with respect to one or more additional installments in which the
      Optionee would have vested had the Optionee continued in Service.

    


    D. STOCKHOLDER
      RIGHTS. The holder of an option shall have no stockholder rights with respect
      to
      the shares subject to the option until such person shall have exercised the
      option, paid the exercise price and become a holder of record of the purchased
      shares.

    


    E. REPURCHASE
      RIGHTS. The Plan Administrator shall have the discretion to grant options which
      are exercisable for unvested shares of Common Stock. Should the Optionee cease
      Service while holding such unvested shares, the Corporation shall have the
      right
      to repurchase, at the purchase price paid per share, any or all of those
      unvested shares. The terms upon which such repurchase right shall be exercisable
      (including the period and procedure for exercise and the appropriate vesting
      schedule for the purchased shares) shall be established by the Plan
      Administrator and set forth in the document evidencing such repurchase
      right.

    


    F. LIMITED
      TRANSFERABILITY OF OPTIONS. During the lifetime of the Optionee, the options
      shall be exercisable only by the Optionee and shall not be assignable or
      transferable other than by will or by the laws of descent and distribution
      following the Optionee's death, provided
      however,
      that an
      option may be assigned in whole or in part during Optionee's lifetime to one
      or
      more members of the Optionee's Immediate Family or to a trust established for
      the exclusive benefit of Optionee or one or more members of the Optionee's
      Immediate Family or to the Optionee's former spouse, to the extent such
      assignment is in connection with Optionee's estate plan or pursuant to a
      domestic relations order. The assigned portion shall be exercisable only by
      the
      person or persons who acquire a proprietary interest in the option pursuant
      to
      such assignment. The terms applicable to the assigned portion shall be the
      same
      as those in effect for this option immediately prior to such assignment and
      shall be set forth in such documents issued to the assignee as the Plan
      Administrator may deem appropriate. Notwithstanding the foregoing, the Optionee
      may also designate one or more persons as the beneficiary or beneficiaries
      of
      his or her outstanding options under this Article Two, and those options shall,
      in accordance with such designation, automatically be transferred to such
      beneficiary or beneficiaries upon the Optionee's death while holding those
      options. Such beneficiary or beneficiaries shall take the transferred option
      subject to all the terms and conditions of the applicable agreement evidencing
      each such transferred option, including (without limitation) the limited time
      period during which the option may be exercised following the Optionee's
      death.

    


    II. CANCELLATION
      AND REGRANT OF OPTIONS

    


    The
      Plan
      Administrator shall have the authority to effect, at any time and from time
      to
      time, with the consent of the affected option holders, the cancellation of
      any
      or all outstanding options under the Discretionary Option Grant Program and
      to
      grant in substitution new options covering the same or different number of
      shares of Common Stock but with an exercise price per share based on the Fair
      Market Value per share of Common Stock on the new grant date.

    


    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    III. CHANGE
      IN
      CONTROL/HOSTILE TAKE-OVER

    


    A. No
      option
      outstanding at the time of a Change in Control shall become exercisable on
      an
      accelerated basis if and to the extent: (i) that option is, in connection with
      the Change in Control, assumed by the successor corporation (or parent thereof)
      or otherwise continued in full force and effect pursuant to the terms of the
      Change in Control transaction, (ii) such option is replaced with a cash
      incentive program of the successor corporation which preserves the spread
      existing at the time of the Change in Control on the shares of Common Stock
      for
      which the option is not otherwise at that time exercisable and provides for
      subsequent payout in accordance with the same exercise/vesting schedule
      applicable to those option shares or (iii) the acceleration of such option
      is
      subject to other limitations imposed by the Plan Administrator at the time
      of
      the option grant. However, if none of the foregoing conditions are satisfied,
      then each option outstanding at the time of the Change in Control but not
      otherwise exercisable for all the shares of Common Stock at that time subject
      to
      such option shall automatically accelerate so that each such option shall,
      immediately prior to the effective date of the Change in Control, become
      exercisable for all the shares of Common Stock at the time subject to such
      option and may be exercised for any or all of those shares as fully vested
      shares of Common Stock.

    


    B. All
      of
      the Corporation's outstanding repurchase rights under the Discretionary Option
      Grant Program shall also terminate automatically, and the shares of Common
      Stock
      subject to those terminated rights shall immediately vest in full, in the event
      of any Change in Control, except to the extent: (i) those repurchase rights
      are
      assigned to the successor corporation (or parent thereof) or otherwise continued
      in full force and effect pursuant to the terms of the Change in Control
      transaction or (ii) such accelerated vesting is precluded by other limitations
      imposed by the Plan Administrator at the time the repurchase right is
      issued.

    


    C. Immediately
      following the consummation of the Change in Control, all outstanding options
      shall terminate and cease to be outstanding, except to the extent assumed by
      the
      successor corporation (or parent thereof) or otherwise expressly continued
      in
      full force and effect pursuant to the terms of the Change in Control
      transaction.

    


    D. Each
      option which is assumed in connection with a Change in Control or otherwise
      continued in effect shall be appropriately adjusted, immediately after such
      Change in Control, to apply to the number and class of securities which would
      have been issuable to the Optionee in consummation of such Change in Control
      had
      the option been exercised immediately prior to such Change in Control.
      Appropriate adjustments to reflect such Change in Control shall also be made
      to:
      (i) the exercise price payable per share under each outstanding option, provided
      the aggregate exercise price payable for such securities shall remain the same;
      (ii) the maximum number and/or class of securities available for issuance over
      the remaining term of the Plan; and (iii) the maximum number and/or class of
      securities for which any one person may be granted options, direct stock
      issuances and share right awards under the Plan per calendar year. To the extent
      the actual holders of the Corporation's outstanding Common Stock receive cash
      consideration for their Common Stock in consummation of the Change in Control
      transaction, the successor corporation may, in connection with the assumption
      of
      the outstanding options under the Discretionary Option Grant Program, substitute
      one or more shares of its own common stock with a fair market value equivalent
      to the cash consideration paid per share of Common Stock in such Change in
      Control transaction.

    


    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    E. The
      Plan
      Administrator shall have the discretionary authority to structure one or more
      outstanding options under the Discretionary Option Grant Program so that those
      options shall, immediately prior to the effective date of a Change in Control,
      become exercisable for all the shares of Common Stock at that time subject
      to
      such options on an accelerated basis and may be exercised for any or all of
      such
      shares as fully vested shares of Common Stock, whether or not those options
      are
      to be assumed or otherwise continued in full force and effect or replaced with
      a
      cash incentive program pursuant to the express terms of the Change in Control
      transaction. In addition, the Plan Administrator shall have the discretionary
      authority to structure one or more of the Corporation's repurchase rights under
      the Discretionary Option Grant Program so that those rights shall immediately
      terminate at the time of such Change in Control and shall not be assignable
      to
      the successor corporation (or parent thereof), and the shares subject to those
      terminated rights shall accordingly vest in full at the time of such Change
      in
      Control.

    


    F. The
      Plan
      Administrator shall have full power and authority to structure one or more
      outstanding options under the Discretionary Option Grant Program so that those
      options shall vest and become exercisable for all the shares of Common Stock
      at
      that time subject to such options on an accelerated basis in the event the
      Optionee's Service is subsequently terminated by reason of an Involuntary
      Termination within a designated period (not to exceed eighteen (18) months)
      following the effective date of any Change in Control in which those options
      do
      not otherwise accelerate. Any options so accelerated shall remain exercisable
      for fully vested shares of Common Stock until the expiration or sooner
      termination of the option term. In addition, the Plan Administrator may
      structure one or more of the Corporation's repurchase rights under the
      Discretionary Option Grant Program so that those rights shall immediately
      terminate with respect to any shares of Common Stock held by the Optionee at
      the
      time of his or her Involuntary Termination, and the shares subject to those
      terminated repurchase rights shall accordingly vest in full at that
      time.

    


    G. The
      Plan
      Administrator shall have the discretionary authority to structure one or more
      outstanding options under the Discretionary Option Grant Program so that those
      options shall, immediately prior to the effective date of a Hostile Take-Over,
      vest and become exercisable for all the shares of Common Stock at that time
      subject to such options on an accelerated basis and may be exercised for any
      or
      all of such shares as fully vested shares of Common Stock. In addition, the
      Plan
      Administrator shall have the discretionary authority to structure one or more
      of
      the Corporation's repurchase rights under the Discretionary Option Grant Program
      so that those rights shall terminate automatically upon the consummation of
      such
      Hostile Take-Over, and the shares subject to those terminated rights shall
      thereupon immediately vest in full. Alternatively, the Plan Administrator may
      condition the automatic acceleration of one or more outstanding options under
      the Discretionary Option Grant Program and the termination of one or more of
      the
      Corporation's outstanding repurchase rights under such program upon the
      Involuntary Termination of the Optionee's Service within a designated period
      (not to exceed eighteen (18) months) following the effective date of such
      Hostile Take-Over. Each option so accelerated shall remain exercisable for
      fully
      vested shares of Common Stock until the expiration or sooner termination of
      the
      option term.

    


    H. The
      grant
      of options under the Discretionary Option Grant Program shall in no way affect
      the right of the Corporation to adjust, reclassify, reorganize or otherwise
      change its capital or business structure or to merge, consolidate, dissolve,
      liquidate or sell or transfer all or any part of its business or
      assets.

    


    V. STOCK
      APPRECIATION RIGHTS

    


    The
      Plan
      Administrator may, subject to such conditions as it may determine, grant to
      selected Optionees stock appreciation rights which will allow the holders of
      those rights to elect between the exercise of the underlying option for shares
      of Common Stock and the surrender of that option in exchange for a distribution
      from the Corporation in an amount equal to the excess of: (A) the Option
      Surrender Value of the number of shares for which the option is surrendered;
      over (B) the aggregate exercise price payable for such shares. The distribution
      may be made in shares of Common Stock valued at Fair Market Value on the option
      surrender date, in cash, or partly in shares and partly in cash, as the Plan
      Administrator shall in its sole discretion deem appropriate.

    


    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    ARTICLE
      THREE

    


    STOCK
      ISSUANCE PROGRAM

    


    I. STOCK
      ISSUANCES

    


    Shares
      of
      Common Stock may be issued under the Stock Issuance Program through direct
      and
      immediate issuances without any intervening option grants. Each such stock
      issuance shall be evidenced by a Stock Issuance Agreement which complies with
      the terms specified below. Shares of Common Stock may also be issued under
      the
      Stock Issuance Program pursuant to share right awards which entitle the
      recipients to receive those shares upon the attainment of designated performance
      goals. 

    


    II. STOCK
      ISSUANCE TERMS

    


    A. PURCHASE
      PRICE.

    


    1. The
      purchase price per share shall be fixed by the Plan Administrator.

    


    2. Subject
      to the provisions of Section I of Article Four, shares of Common Stock may
      be
      issued under the Stock Issuance Program for any of the following items of
      consideration which the Plan Administrator may deem appropriate in each
      individual instance:

    


    (i) cash
      or
      check made payable to the Corporation, or

    


    (ii) services
      rendered or to be rendered to the Corporation (or any Parent or
      Subsidiary).

    


    B. VESTING
      PROVISIONS.

    


    1. Shares
      of
      Common Stock issued under the Stock Issuance Program may, in the discretion
      of
      the Plan Administrator, be fully and immediately vested upon issuance or may
      vest in one or more installments over the Participant's period of Service or
      upon attainment of specified performance objectives. The elements of the vesting
      schedule applicable to any unvested shares of Common Stock issued under the
      Stock Issuance Program shall be determined by the Plan Administrator and
      incorporated into the Stock Issuance Agreement. Shares of Common Stock may
      also
      be issued under the Stock Issuance Program pursuant to share right awards which
      entitle the recipients to receive those shares upon the attainment of designated
      performance goals. Upon the attainment of such performance goals, fully vested
      shares of Common Stock shall be issued upon satisfaction of those share right
      awards.

    


    2. Any
      new,
      substituted or additional securities or other property (including money paid
      other than as a regular cash dividend) which the Participant may have the right
      to receive with respect to the Participant's unvested shares of Common Stock
      by
      reason of any stock dividend, stock split, recapitalization, combination of
      shares, exchange of shares or other change affecting the outstanding Common
      Stock as a class without the Corporation's receipt of consideration shall be
      issued subject to: (i) the same vesting requirements applicable to the
      Participant's unvested shares of Common Stock; and (ii) such escrow arrangements
      as the Plan Administrator shall deem appropriate.

    


    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    3. The
      Participant shall have full stockholder rights with respect to any shares of
      Common Stock issued to the Participant under the Stock Issuance Program, whether
      or not the Participant's interest in those shares is vested. Accordingly, the
      Participant shall have the right to vote such shares and to receive any regular
      cash dividends paid on such shares.

    


    4. Should
      the Participant cease to remain in Service while holding one or more unvested
      shares of Common Stock issued under the Stock Issuance Program or should the
      performance objectives not be attained with respect to one or more such unvested
      shares of Common Stock, then those shares shall be immediately surrendered
      to
      the Corporation for cancellation, and the Participant shall have no further
      stockholder rights with respect to those shares. To the extent the surrendered
      shares were previously issued to the Participant for consideration paid in
      cash
      or cash equivalent (including the Participant's purchase-money indebtedness
      but
      not including services rendered by the Participant), the Corporation shall
      repay
      to the Participant the cash consideration paid for the surrendered shares and
      shall cancel the unpaid principal balance of any outstanding purchase-money
      note
      of the Participant attributable to the surrendered shares.

    


    5. The
      Plan
      Administrator may in its discretion waive the surrender and cancellation of
      one
      or more unvested shares of Common Stock which would otherwise occur upon the
      cessation of the Participant's Service or the non-attainment of the performance
      objectives applicable to those shares. Such waiver shall result in the immediate
      vesting of the Participant's interest in the shares as to which the waiver
      applies. Such waiver may be effected at any time, whether before or after the
      Participant's cessation of Service or the attainment or non-attainment of the
      applicable performance objectives.

    


    6. Outstanding
      share right awards under the Stock Issuance Program shall automatically
      terminate, and no shares of Common Stock shall actually be issued in
      satisfaction of those awards, if the performance goals or Service requirements
      established for such awards are not attained. The Plan Administrator, however,
      shall have the discretionary authority to issue shares of Common Stock under
      one
      or more outstanding share right awards as to which the designated performance
      goals or Service requirements have not been attained.

    


    III. CHANGE
      IN
      CONTROL/HOSTILE TAKE-OVER

    


    A. All
      of
      the Corporation's outstanding repurchase rights under the Stock Issuance Program
      shall terminate automatically, and all the shares of Common Stock subject to
      those terminated rights shall immediately vest in full, in the event of any
      Change in Control, except to the extent (i) those repurchase rights are assigned
      to the successor corporation (or parent thereof) or otherwise continued in
      full
      force and effect pursuant to the express terms of the Change in Control
      transaction or (ii) such accelerated vesting is precluded by other limitations
      imposed in the Stock Issuance Agreement.

    


    B. The
      Plan
      Administrator shall have the discretionary authority to structure one or more
      of
      the Corporation's repurchase rights under the Stock Issuance Program so that
      those rights shall automatically terminate in whole or in part upon the
      occurrence of a Change in Control and shall not be assignable to the successor
      corporation (or parent thereof), and the shares of Common Stock subject to
      those
      terminated rights shall immediately vest in full at the time of such Change
      in
      Control.

    


    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    C. The
      Plan
      Administrator shall also have the discretionary authority to structure one
      or
      more of the Corporation's repurchase rights under the Stock Issuance Program
      so
      that those rights shall automatically terminate in whole or in part, and the
      shares of Common Stock subject to those terminated rights shall immediately
      vest
      in full, upon the Involuntary Termination of the Participant's Service within
      a
      designated period (not to exceed eighteen (18) months) following the effective
      date of any Change in Control in which those repurchase rights do not otherwise
      terminate. 

    


    D. The
      Plan
      Administrator shall also have the discretionary authority to structure one
      or
      more of the Corporation's repurchase rights under the Stock Issuance Program
      so
      that those rights shall automatically terminate in whole or in part upon the
      occurrence of a Hostile Take-Over, and the shares of Common Stock subject to
      those terminated rights shall immediately vest in full at the time of such
      Hostile Take-Over.

    


    ARTICLE
      FOUR

    


    MISCELLANEOUS

    


    I. FINANCING

    


    The
      Plan
      Administrator may permit any Optionee or Participant to pay the option exercise
      price under the Discretionary Option Grant Program or the purchase price of
      shares issued under the Stock Issuance Program by delivering a full-recourse,
      interest bearing promissory note payable in one or more installments. The terms
      of any such promissory note (including the interest rate and the terms of
      repayment) shall be established by the Plan Administrator in its sole
      discretion. In no event may the maximum credit available to the Optionee or
      Participant exceed the sum of (i) the aggregate option exercise price or
      purchase price payable for the purchased shares plus (ii) any Federal, state
      and
      local income and employment tax liability incurred by the Optionee or the
      Participant in connection with the option exercise or share
      purchase.

    


    II. SHARE
      ESCROW/LEGENDS

    


    Unvested
      shares issued under the Plan may, in the Plan Administrator's discretion, be
      held in escrow by the Corporation until the Participant's interest in such
      shares vests or may be issued directly to the Participant with restrictive
      legends on the certificates evidencing those unvested shares.

    


    III. TAX
      WITHHOLDING

    


    A. The
      Corporation's obligation to deliver shares of Common Stock upon the exercise
      of
      options or the issuance or vesting of such shares under the Plan shall be
      subject to the satisfaction of all applicable Federal, state and local income
      and employment tax withholding requirements.

    


    B. The
      Plan
      Administrator may, in its discretion, provide any or all holders of options
      or
      unvested shares of Common Stock under the Plan with the right to use shares
      of
      Common Stock in satisfaction of all or part of the Taxes incurred by such
      holders in connection with the exercise of their options or the vesting of
      their
      shares. Such right may be provided to any such holder in either or both of
      the
      following formats:

    


    1. Stock
      Withholding: The election to have the Corporation withhold, from the shares
      of
      Common Stock otherwise issuable upon the exercise of such option or the vesting
      of such shares, a portion of those shares with an aggregate Fair Market Value
      equal to the amount of the Taxes (not to exceed one hundred percent (100%)
      of
      such Taxes) to be satisfied in such manner as designated by the holder in
      writing; or

    


    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    2. Stock
      Delivery: The election to deliver to the Corporation, at the time the option
      is
      exercised or the shares vest, one or more shares of Common Stock previously
      acquired by such holder (other than in connection with the option exercise
      or
      share vesting triggering the Taxes) with an aggregate Fair Market Value equal
      to
      the amount of the Taxes (not to exceed one hundred percent (100%) of such Taxes)
      to be satisfied in such manner as designated by the holder in
      writing.

    


    IV. EFFECTIVE
      DATE AND TERM OF THE PLAN

    


    A. The
      Plan
      shall become effective immediately upon the Plan Effective Date. Options may
      be
      granted under the Discretionary Option Grant at any time on or after the Plan
      Effective Date.

    


    B. The
      Plan
      shall terminate upon the EARLIEST of (i) the tenth anniversary of the Plan
      Effective Date, (ii) the date on which all shares available for issuance under
      the Plan shall have been issued as fully-vested shares or (iii) the termination
      of all outstanding options in connection with a Change in Control. Upon such
      plan termination, all outstanding option grants and unvested stock issuances
      shall thereafter continue to have force and effect in accordance with the
      provisions of the documents evidencing such grants or issuances.

    


    V. AMENDMENT
      OF THE PLAN

    


    A. The
      Board
      shall have complete and exclusive power and authority to amend or modify the
      Plan in any or all respects. However, no such amendment or modification shall
      adversely affect the rights and obligations with respect to stock options or
      unvested stock issuances at the time outstanding under the Plan unless the
      Optionee or the Participant consents to such amendment or modification. In
      addition, certain amendments may require stockholder approval pursuant to
      applicable laws or regulations.

    


    B. Options
      to purchase shares of Common Stock may be granted under the Discretionary Option
      Grant Program and shares of Common Stock may be issued under the Stock Issuance
      Program that are in each instance in excess of the number of shares then
      available for issuance under the Plan, provided any excess shares actually
      issued under those programs shall be held in escrow until there is obtained
      any
      required approval of an amendment sufficiently increasing the number of shares
      of Common Stock available for issuance under the Plan. If such approval is
      not
      obtained within twelve (12) months after the date the first such excess
      issuances are made, then (i) any unexercised options granted on the basis of
      such excess shares shall terminate and cease to be outstanding and (ii) the
      Corporation shall promptly refund to the Optionees and the Participants the
      exercise or purchase price paid for any excess shares issued under the Plan
      and
      held in escrow, together with interest (at the applicable Short Term Federal
      Rate) for the period the shares were held in escrow, and such shares shall
      thereupon be automatically canceled and cease to be outstanding.

    


    VI. USE
      OF
      PROCEEDS

    


    Any
      cash
      proceeds received by the Corporation from the sale of shares of Common Stock
      under the Plan shall be used for general corporate purposes.

    


    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    VII. REGULATORY
      APPROVALS

    


    A. The
      implementation of the Plan, the granting of any stock option under the Plan
      and
      the issuance of any shares of Common Stock (i) upon the exercise of any granted
      option or (ii) under the Stock Issuance Program shall be subject to the
      Corporation's procurement of all approvals and permits required by regulatory
      authorities having jurisdiction over the Plan, the stock options granted under
      it and the shares of Common Stock issued pursuant to it.

    


    B. No
      shares
      of Common Stock or other assets shall be issued or delivered under the Plan
      unless and until there shall have been compliance with all applicable
      requirements of Federal and state securities laws, including the filing and
      effectiveness of the Form S-8 registration statement for the shares of Common
      Stock issuable under the Plan, and all applicable listing requirements of the
      stock exchange or automated quotation system, as applicable, on which Common
      Stock is then quoted for trading.

    


    VIII. NO
      EMPLOYMENT/SERVICE RIGHTS

    


    Nothing
      in the Plan shall confer upon the Optionee or the Participant any right to
      continue in Service for any period of specific duration or interfere with or
      otherwise restrict in any way the rights of the Corporation (or any Parent
      or
      Subsidiary employing or retaining such person) or of the Optionee or the
      Participant, which rights are hereby expressly reserved by each, to terminate
      such person's Service at any time for any reason, with or without
      cause.

    


    


    [REMAINDER
      OF THIS PAGE INTENTIONALLY LEFT BLANK]

    


    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    


    APPENDIX

    


    The
      following definitions shall be in effect under the Plan:

    


    A. BOARD
      shall mean the Corporation's Board of Directors.

    


    B. CHANGE
      IN
      CONTROL shall mean a change in ownership or control of the Corporation effected
      through any of the following transactions:

    


    (i) a
      stockholder-approved merger or consolidation in which securities possessing
      more
      than fifty percent (50%) of the total combined voting power of the Corporation's
      outstanding securities are transferred to a person or persons different from
      the
      persons holding those securities immediately prior to such transaction;
      or

    


    (ii) a
      sale,
      transfer or other disposition of all or substantially all of the Corporation's
      assets; or

    


    (iii) the
      acquisition, directly or indirectly by any person or related group of persons
      (other than the Corporation or a person that directly or indirectly controls,
      is
      controlled by, or is under common control with, the Corporation), of beneficial
      ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities
      possessing more than fifty percent (50%) of the total combined voting power
      of
      the Corporation's outstanding securities pursuant to a tender or exchange offer
      made directly to the Corporation's stockholders which the Board recommends
      such
      stockholders accept;

    


    provided,
      however, the Plan Administrator shall have the discretionary authority to
      determine that a transaction or series of transactions does not constitute
      a
      Change in Control. Such determination by the Plan Administrator shall govern
      notwithstanding the fact that the determination is contrary to paragraphs (i)
      through (iii) set forth above.

    


    C. CODE
      shall mean the Internal Revenue Code of 1986, as amended.

    


    D. COMMON
      STOCK shall mean the Corporation's common stock.

    


    E. CORPORATION
      shall mean Positron Corporation, a Texas corporation, and its
      successors.

    


    F. DISCRETIONARY
      OPTION GRANT PROGRAM shall mean the discretionary option grant program in effect
      under the Plan.

    


    G. EMPLOYEE
      shall mean an "employee" of the Corporation (or any Parent or Subsidiary),
      within the meaning of Section 3401(c) of the Code and the regulations
      thereunder. 

    


    H. EXERCISE
      DATE shall mean the date on which the Corporation shall have received written
      notice of the option exercise.

    


    I. FAIR
      MARKET VALUE per share of Common Stock on any relevant date shall be determined
      by the Plan Administrator in its sole, reasonable discretion. In determining
      the
      fair market value, the Plan Administrator may consider the following
      items:

    


    
      
        APPENDIX

      

      
        -1-

        
          

        

      

      
        
        

      

    

    
      	 	
              (i)

            	
              the
                closing
                selling price per share of common stock on the date of grant.
                

            


    

    


    This
      closing selling price shall be determined as follows:

    


    
      	 	
              a.

            	
              If
                the Common Stock is at the time listed on the Nasdaq Stock Market,
                then
                the closing
                selling price per
                share of Common Stock on the date in question shall be used, as such
                price
                is reported by the National Association of Securities Dealers on
                the
                Nasdaq Stock Market and published in The
                Wall Street Journal.
                If there is no closing selling price for the Common Stock on the
                date in
                question, then the closing selling price on the last preceding date
                for
                which such quotation exists shall be
                used;

            


    

    


    
      	 	
              b.

            	
              If
                the Common Stock is at the time listed on any stock exchange, then
                the
                closing
                selling price per
                share of Common Stock on the date in question on the stock exchange
                determined by the Plan Administrator to be the primary market for
                the
                Common Stock shall be used, as such price is officially quoted in
                the
                composite tape of transactions on such exchange and published in
                The
                Wall Street Journal.
                If there is no closing selling price for the Common Stock on the
                date in
                question, then the closing selling price on the last preceding date
                for
                which such quotation exists shall be used;
                or

            


    

    


    
      	 	
              c.

            	
              If
                the Common Stock is regularly quoted by a recognized securities dealer
                but
                selling prices are not reported, the mean between the high bid and
                low
                asked prices for the Common Stock on the date of determination shall
                be
                used, as published in The
                Wall Street Journal
                or
                such other source as the Plan Administrator deems
                reliable.

            


    

    


    
      	 	
              (ii)

            	
              the
                average trading volume of the Common Stock and the trading volume
                on the
                date of the grant;

            


    

    


    
      	 	
              (iii)

            	
              the
                closing selling price per share of Common Stock on recent
                dates;

            


    

    


    
      	 	
              (iv)

            	
              the
                spread between the "bid" and "ask" prices on the date of grant and
                on
                recent dates;

            


    

    


    
      	 	
              (v)

            	
              the
                price of the Corporation's securities in recently closed private
                offerings; 

            


    

    


    
      	 	
              (vi)

            	
              appropriate
                volume discounts based on the number of shares subject to the option
                grant; and

            


    

    


    
      	 	
              (vii)

            	
              any
                other information the plan administrator determines is applicable
                in
                determining the fair market value.

            


    

    


    J. HOSTILE
      TAKE-OVER shall mean:

    


    (i) the
      acquisition, directly or indirectly, by any person or related group of persons
      (other than the Corporation or a person that directly or indirectly controls,
      is
      controlled by, or is under common control with, the Corporation) of beneficial
      ownership (within the meaning of Rule 13d-3 of the 1934 Act) of securities
      possessing more than fifty percent (50%) of the total combined voting power
      of
      the Corporation's outstanding securities pursuant to a tender or exchange offer
      made directly to the Corporation's stockholders which the Board does not
      recommend such stockholders to accept; or 

    


    
      
        APPENDIX

      

      
        -2-

        
          

        

      

      
        
        

      

    

    (ii) a
      change
      in the composition of the Board over a period of thirty-six (36) consecutive
      months or less such that a majority of the Board members ceases, by reason
      of
      one or more contested elections for Board membership, to be comprised of
      individuals who either: (a) have been Board members continuously since the
      beginning of such period; or (b) have been elected or nominated for election
      as
      Board members during such period by at least a majority of the Board members
      described in clause (a) who were still in office at the time the Board approved
      such election or nomination.

    


    K. IMMEDIATE
      FAMILY shall mean any child, stepchild, grandchild, parent, stepparent,
      grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law,
      daughter-in-law, brother-in-law, or sister-in-law, and shall include adoptive
      relationships.

    


    L. INVOLUNTARY
      TERMINATION shall mean the termination of the Service of any individual which
      occurs by reason of:

    


    (i) such
      individual's involuntary dismissal or discharge by the Corporation for reasons
      other than Misconduct, or

    


    (ii) such
      individual's voluntary resignation following (A) a change in his or her position
      with the Corporation which materially reduces his or her level of responsibility
      or the level of management to which Optionee reports, (B) a reduction in his
      or
      her level of compensation (including base salary, fringe benefits and
      participation in any corporate-performance based bonus or incentive programs)
      by
      more than fifteen percent (15%) or (C) a relocation of such individual's place
      of employment by more than fifty (50) miles, provided and only if such change,
      reduction or relocation is effected by the Corporation without the individual's
      consent.

    


    M. MISCONDUCT
      shall mean the commission of any act of fraud, embezzlement or dishonesty by
      the
      Optionee or Participant, any unauthorized use or disclosure by such person
      of
      confidential information or trade secrets of the Corporation (or any Parent
      or
      Subsidiary), or any other intentional misconduct by such person adversely
      affecting the business or affairs of the Corporation (or any Parent or
      Subsidiary) in a material manner. The foregoing definition shall not be deemed
      to be inclusive of all the acts or omissions which the Corporation (or any
      Parent or Subsidiary) may consider as grounds for the dismissal or discharge
      of
      any Optionee, Participant or other person in the Service of the Corporation
      (or
      any Parent or Subsidiary).

    


    N. 1934
      ACT
      shall mean the Securities Exchange Act of 1934, as amended.

    


    O. OFFICER
      shall mean any person serving as the president, chief executive officer, chief
      financial officer, chief operating officer, treasurer, secretary or in any
      other
      managerial or administrative capacity for the Corporation or a Parent or
      Subsidiary of the Corporation, as determined in the Administrator's
      discretion.

    


    P. OPTION
      COMMITTEE shall mean the committee of two (2) or more non-employee Board members
      appointed by the Board to administer the Discretionary Option Grant and Stock
      Issuance Programs.

    


    Q. OPTIONEE
      shall mean any person to whom an option is granted under the Discretionary
      Option Grant Program.

    


    R. OPTION
      SURRENDER VALUE shall mean the Fair Market Value per share of Common Stock
      on
      the date the option is surrendered to the Corporation or, in the event of a
      Hostile Take-Over, effected through a tender offer, the highest reported price
      per share of Common Stock paid by the tender offer or in effecting such Hostile
      Take-Over, if greater.

    


    
      
        APPENDIX

      

      
        -3-

        
          

        

      

      
        
        

      

    

    S. PARENT
      shall mean any corporation (other than the Corporation) in an unbroken chain
      of
      corporations ending with the Corporation, provided each corporation in the
      unbroken chain (other than the Corporation) owns, at the time of the
      determination, stock possessing fifty percent (50%) or more of the total
      combined voting power of all classes of stock in one of the other corporations
      in such chain.

    


    T. PARTICIPANT
      shall mean any person who is issued shares of Common Stock under the Stock
      Issuance Program.

    


    U. PLAN
      shall mean the Corporation's 2006 Stock Incentive Plan, as set forth in this
      document.

    


    V. PLAN
      ADMINISTRATOR shall mean the particular entity, whether the Option Committee
      or
      the Board, which is authorized to administer the Discretionary Option Grant
      and
      Stock Issuance Programs with respect to one or more classes of eligible persons,
      to the extent such entity is carrying out its administrative functions under
      those programs with respect to the persons under its jurisdiction.

    


    W. PLAN
      EFFECTIVE DATE shall mean the date on which the Plan was adopted by the
      Board.

    


    X. SECTION
      16 INSIDER shall mean an officer or director of the Corporation subject to
      the
      short-swing profit liabilities of Section 16 of the 1934 Act.

    


    AA. SERVICE
      shall mean the performance of services for the Corporation (or any Parent or
      Subsidiary) by a person in the capacity of an Employee, Officer, member of
      the
      board of directors or a consultant or independent advisor, except to the extent
      otherwise specifically provided in the documents evidencing the option grant
      or
      stock issuance.

    


    BB. SHORT
      TERM FEDERAL RATE shall mean the federal short-term rate in effect under Section
      1274(d) of the Code for the period the shares were held in escrow.

    


    CC. STOCK
      ISSUANCE AGREEMENT shall mean the agreement entered into by the Corporation
      and
      the Participant at the time of issuance of shares of Common Stock under the
      Stock Issuance Program.

    


    DD. STOCK
      ISSUANCE PROGRAM shall mean the stock issuance program in effect under the
      Plan.

    


    EE. SUBSIDIARY
      shall mean any corporation (other than the Corporation) in an unbroken chain
      of
      corporations beginning with the Corporation, provided each corporation (other
      than the last corporation) in the unbroken chain owns, at the time of the
      determination, stock possessing fifty percent (50%) or more of the total
      combined voting power of all classes of stock in one of the other corporations
      in such chain.

    


    FF. TAXES
      shall mean the Federal, state and local income and employment tax liabilities
      incurred by the holder of options or unvested shares of Common Stock in
      connection with the exercise of those options or the vesting of those
      shares.

    


    
      
        APPENDIX

      

      
        -4-

        
          

        

      

      
        
        

      

    

    GG. 10%
      STOCKHOLDER shall mean the owner of stock (as determined under Code Section
      424(d)) possessing more than ten percent (10%) of the total combined voting
      power of all classes of stock of the Corporation (or any Parent or
      Subsidiary).

     

    
      
        APPENDIX

      

      
        -5-