Document:

exv10w1

EXHIBIT 10.1

March 19, 2010

Mr. Paul Evanson

Chairman of the Board, President

     And Chief Executive Officer

Allegheny Energy, Inc.

800 Cabin Hill Drive

Greensburg, PA 15601

Dear Paul,

The purpose of this letter agreement (“Agreement”) is to set forth the terms and conditions of your
employment with FirstEnergy Service Company (“FirstEnergy” or the “Company”) following the
consummation of the pending merger transaction between a FirstEnergy Corp. subsidiary and Allegheny
Energy, Inc. (“Allegheny”). For purposes of this Agreement, the pending transaction shall be
referred to as the “Merger,” the date of consummation of the Merger shall be referred to as the
“Merger Date,” and Allegheny and its affiliates and subsidiaries shall be referred to as the
“Allegheny Companies.”

	1.	 	Effective on the Merger Date, unless you are unable to commence employment with the Company,
as specified in the last sentence of this Paragraph 1, this Agreement shall supersede and
replace your current Amended and Restated Employment Agreement with Allegheny dated July 9,
2009 (the “Allegheny Employment Agreement”). Consequently, from and after the Merger Date,
neither Allegheny, FirstEnergy, nor you shall have any rights and obligations under the
Allegheny Employment Agreement, except as specifically set forth herein. Nothing herein is
intended to alter any of your rights under the Allegheny Employment Agreement prior to the
Merger Date. The payment of any benefits provided herein and your obligations hereunder are
contingent upon you being able to commence employment with the Company on the Merger Date;
provided, however, that if you are unable to commence employment with the
Company on the Merger Date because of illness or a temporary medical condition lasting less
than one month in duration, but are able to and do commence employment immediately after such
illness or temporary medical condition, then you shall be entitled to all benefits herein and
subject to all obligations hereunder.
	 
	2.	 	Effective upon the Merger Date, you will assume the title of Executive Vice Chairman of
FirstEnergy Corp., reporting directly to the Chief Executive Officer of FirstEnergy Corp.
(“CEO”), and your duties and responsibilities will be commensurate with those customarily
performed, undertaken and exercised by persons situated in a similar executive capacity. Such
services will include, but will not necessarily be limited to, assistance in facilitating the
development, maintenance and transfer of the relationships Allegheny already has established
in its various operating regions and to provide advice and counsel on other business issues,
including but not limited to Merger integration matters; overall corporate strategy; and
talent retention and development. It is anticipated that you will be available at the
discretion of the CEO, and you will also be available at either the FirstEnergy headquarters
or your current office in Greensburg, Pennsylvania, as necessary. You will be provided
appropriate support from an executive assistant at Greensburg and, as necessary, at other
locations. Additionally, you will also be invited to attend all FirstEnergy Board of
Directors’ meetings.

 

 

	3.	 	In consideration of your performance of the duties outlined in paragraph 2 above, you will be
compensated as follows:

	 	(a)	 	Base Salary. Effective on the Merger Date, your initial base salary (the
“Base Salary”) will be set at an annual rate of One Million Dollars ($1,000,000) which
will be payable in accordance with the existing payroll practices of FirstEnergy. The
Base Salary will be reviewed at least annually by the Compensation Committee of the Board
of Directors for FirstEnergy Corp. at the same time as the base salaries of FirstEnergy’s
other executives.
	 
	 	(b)	 	Annual Bonus. You will be a participant in FirstEnergy’s 2007 Incentive
Compensation Plan (“ICP”), or any subsequent or amended plan. As such, you will be
eligible to receive an annual bonus each year under the Short-Term Incentive Program
(“STIP”) component of the ICP (or any successor program) regardless of whether you satisfy
any “productive time” or other eligibility requirements. Your annual target bonus
opportunity will be 80% of your Base Salary. The annual short-term target opportunity
will be reviewed at least annually by the Compensation Committee of the Board of Directors
of FirstEnergy Corp. at the same time as other senior executive officers. Any annual
incentive compensation awarded to you will be payable in accordance with the provisions of
the STIP. The Key Performance Indicators (“KPIs”), which serve as the basis for
determining the amount of the annual bonus earned, will be set similar to those of the
CEO. Seventy percent (70%) of your target opportunity will be based on the achievement of
financial KPIs and thirty percent (30%) will be based on the achievement of operational
KPIs. Your STIP for any year will be payable no later than March 15th of the succeeding
year.
	 
	 	(c)	 	Long-Term Incentive Compensation. You will not be eligible for participation
in the Long-Term Incentive Program (“LTIP”) component of the ICP.
	 
	 	(d)	 	Employee Welfare Benefits. The Company maintains a Flexible Benefits Plan
that includes programs providing health care insurance, dental insurance, group term life
insurance, accidental death and dismemberment insurance, long-term disability, long-term
care, dependent care and health care spending accounts. Except as specifically set forth
in this Agreement, you will be eligible to participate in the FirstEnergy Flexible
Benefits Plan, as well as all executive and employee welfare benefit plans, programs,
policies and arrangements sponsored, maintained or contributed to by FirstEnergy on the
same level as other senior executive officers of FirstEnergy, subject to the terms and
conditions of such plans.
	 
	 	(e)	 	Allegheny Entitlements and Benefit in Lieu of Pension.

	 	1)	 	Upon a termination of your employment with FirstEnergy for any
reason, you shall be entitled to a lump-sum cash payment in respect of certain
accrued benefits under the Allegheny Employment Agreement in an amount equal to
the sum of (a) $6,400,000, representing the amounts promised to you under Section
6(c) of the Allegheny Employment Agreement, calculated as if you were employed by
Allegheny until June 15, 2011, and (b) an amount equal to the sum of your annual
base salary plus your target bonus opportunity of one hundred twenty-five percent
(125%) of your annual base salary, at Allegheny on the day preceding the Merger
Date. Such lump-sum cash payment shall be made as soon as practicable following
your termination, but no later than the 15th day of the third calendar month
following the date of your termination of employment.

 

 

	 	2)	 	In addition, you will not be eligible to participate in the
FirstEnergy Corp. Master Pension Plan. Instead, upon a termination of your
employment with FirstEnergy for any reason you shall be entitled to a lump-sum
cash payment (the “Benefit in Lieu of
Pension”) in an amount equal to Eighty-Three Thousand Three Hundred Thirty-Three
Dollars ($83,333) for each month you are employed by FirstEnergy from the Merger
Date through the date that is twenty-four months following the Merger Date. Such
lump-sum cash payment shall be made as soon as practicable following your
termination, but no later than the 15th day of the third calendar month following
the date of your termination of employment.

	 	(f)	 	Termination of Employment. Upon termination of your employment with the
Company you shall be entitled to the following:

	 	1)	 	Upon termination of your employment by the Company for Cause or your
voluntary resignation without Good Reason (as hereinafter defined), you shall be
entitled to receive (a) the Base Salary through the date of termination, to the
extent not theretofore paid, payable within thirty (30) days of termination, (b) any
unpaid prior year’s bonus and any deferred compensation, payable under the terms of
any Company plans, programs or arrangements, and (c) any expense reimbursements
accrued in accordance with Company policy as of the date of termination, to the
extent not theretofor paid, payable within thirty (30) days of such termination, and
(d) the amounts set forth in Paragraphs 3(e)(1) and (2) to be paid as set forth
therein (collectively, the amounts in (a), (b), (c) and (d) are referenced as the
“Accrued Amounts”).
	 
	 	2)	 	Upon termination of your employment as a result of your death or
Disability (as hereinafter defined) or upon termination of your employment at the
expiration of the Term, you shall be entitled to receive (a) the Accrued Amounts
paid in accordance with Paragraph 3(f)(1), and (b) the amount of your STIP for the
year of your termination prorated as defined by the ICP (the “Pro Rata Bonus”)
regardless of whether you satisfy any “productive time” or other eligibility
requirements. The Pro Rata Bonus will be paid to you (or your estate or
beneficiaries) no later than March 15th of the year following the date of your
termination of employment.
	 
	 	3)	 	Upon termination of your employment by the Company without Cause or your
resignation for Good Reason, you shall be entitled to receive (a) the Accrued
Amounts paid in accordance with Paragraph 3(f)(1), (b) a Pro Rata Bonus, payable no
later than March 15th of the year following the date of your termination of
employment, and (c) the following additional amounts:

	 	(i)	 	an amount, payable as a lump sum within thirty (30) days of
the date of such termination, equal to the lesser of (A) $1,000,000, or (B)
the total amount of Base Salary that would have been payable to you for
services during the period after such termination date had you remained
employed hereunder through the end of the Term (determined without regard to
any reduction in your Base Salary which constitutes Good Reason),
	 
	 	(ii)	 	an amount, paid in a lump sum within thirty (30) days of the
date of such termination of employment, equal to the lesser of (A) $800,000,
or (B) the total amount of STIP (calculated at your target level) that would
have been payable to you for services during the period after such termination
date had you remained employed hereunder through the end of the Term
(determined without regard to any reduction in your Base Salary or STIP
-calculated at your target level- which constitutes Good Reason), and

 

 

	 	(iii)	 	an amount, paid in the time and form specified in Paragraph
3(e)(2), equal to the lesser of (A) $1,000,000, or (B) the total amount of
Benefit in Lieu of Pension that would have been payable to you for services
during the period after such termination date, had you remained employed
hereunder through the end of the Term.

	 	4)	 	For purposes, hereof, the following terms shall have the following
meanings:

“Cause” shall mean either of the following:

     (A) you engage in willful gross misconduct or willful gross neglect in
connection with your employment, which misconduct or neglect is committed in
bad faith or without reasonable belief that such misconduct or neglect is in
the best interests of the Company and which causes material economic harm to
the Company; or

     (B) your conviction of a felony involving theft or moral turpitude, or you
plead guilty or nolo contendere with respect to such a felony.

You may not be terminated for Cause unless you receive a notice setting forth
in detail the purported grounds upon which such termination is based and you
have been granted the opportunity for a hearing before the Board of Directors
of the Company and the Board of Directors furnishes you written notice
confirming, in its judgment, grounds for termination for Cause exist on the
basis set forth in the original notice.

“Disability” shall be deemed the reason for the termination of your employment,
if, as a result of your incapacity due to physical or mental illness, you shall
have been absent from the performance of your duties with the Company for a
period of six (6) consecutive months, the Company shall have given you a notice
of termination for Disability, and, within thirty (30) days after such notice
of termination is given, you shall not have returned to the performance of your
duties. At any time and from time to time, upon reasonable request by the
Company, you shall submit to a reasonable medical examination for the purpose
of determining the existence, nature and extent of any such Disability.

“Good Reason” shall mean, without your written consent:

     (A) Any failure to continue to employ you as Executive Vice Chairman of
FirstEnergy Corp., the material diminution in your title or duties in such
position, or the assignment to you of any duties inconsistent in any material
respect with your authority, duties, responsibilities or reporting relationship
in such position as contemplated by Paragraph 2 above, excluding any isolated
and inadvertent action not taken in bad faith and which is remedied by
FirstEnergy within ten (10) days after receipt of notice thereof given by you;

     (B) Any failure by the Company to comply with any of the provisions of
Paragraph 3 hereof, other than an isolated and inadvertent failure not
committed in bad faith and which is remedied by the Company within ten (10)
days after receipt of notice thereof given by you;

 

 

     (C) Your being required to relocate to a principal place of employment
which is more than fifty (50) miles from Greensburg, Pennsylvania or Akron,
Ohio;

     (D) Any purported termination by the Company of your employment otherwise
than as expressly permitted herein; or

     (E) Any reduction in your Base Salary or in your target STIP as a
percentage of your Base Salary.

	 	5)	 	The Company agrees that you are not required to seek other employment or
attempt in any way to reduce the amounts payable to you under Paragraph 3(e) or this
Paragraph 3(f). Further, the amount of any payment or benefit provided for
hereunder shall not be reduced by any compensation earned by you as a result of
employment by another employer, by retirement benefits, by offset against any amount
claimed to be owed by you to FirstEnergy, or otherwise.

	 	(g)	 	Stock Options. Your Allegheny stock options shall be converted to
FirstEnergy stock options, and your options, along with the grant price and number of
options, will be adjusted in accordance with the formula set forth in the Agreement and
Plan of Merger dated as of February 10, 2010. Following the termination of your
employment with FirstEnergy for any reason, your options will remain exercisable for the
full stated term of such options (determined as if your employment had not terminated).
Notwithstanding the preceding, any awards intended to be exempt from Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”) will be converted subject to the
requirements of Code Section 409A in order to maintain such exemption.
	 
	 	(h)	 	Other Benefit Plans. You are eligible to participate in FirstEnergy’s
Executive Deferred Compensation Plan and other programs, policies and arrangements as
they relate to FirstEnergy’s senior executive officers with the exception of the
following: FirstEnergy Corp. Master Pension Plan, the Supplemental Pension Benefit
component of the FirstEnergy Corp. Executive Deferred Compensation Plan, the Supplemental
Executive Retirement Program (the “SERP”), any other non-qualified pension, the Company’s
Executive Severance Benefit Plan or any successor or similar plan, and the other plans
expressly excluded above in this Agreement. Through your signature below, you hereby
waive any rights you may have to participation in these plans, programs, policies and
arrangements which are excepted. Your participation in any of the programs for which you
are eligible will be on the same terms and conditions as applicable to other participants
in those programs and will be governed by the applicable plan documents. Any benefits
accrued under any qualified or non-qualified benefit plans of the Allegheny Companies will
be paid in accordance with such plans. Except as provided in the preceding sentence, as
of the Merger Date, you shall not be eligible thereafter to participate in any qualified
and non-qualified benefit plans, programs, policies and arrangements of the Allegheny
Companies and, through your signature below, you hereby waive any rights you may have to
participation in these plans.
	 
	 	(i)	 	Executive Perquisites. You will be entitled to executive perquisites to the
same extent as those available to the CEO as of the date of this letter which, at this
time, include financial planning benefits and personal use of the Company aircraft during
your employment with the Company. You will be entitled to continue to receive the

 

 

	 	 	 	financial planning benefits for one (1) year following the termination of your employment,
provided that the Company continues to offer this benefit to other similarly situated
executives of FirstEnergy. To the extent such financial planning benefits are exempt
under Code Section 409A and are provided through reimbursement, such reimbursements must
be paid by the Company no later than the end of the third calendar year following the
calendar year in which the termination of employment occurred.
	 
	 	(j)	 	Share Ownership Guidelines. Share ownership guidelines, defined as a
multiple of Base Salary, are in place for executives at FirstEnergy. As such, you are
required to maintain an ownership status of four times your Base Salary while actively
employed. The following currently are included in determining ownership status: a) shares directly or jointly owned in certificate form on in a stock investment plan,
b) shares owned through the FirstEnergy Corp. Savings Plan, c) brokerage shares, d) shares
held in the Executive Deferred Compensation Plan, or e) shares granted under the ICP.
	 
	 	(k)	 	Welfare Benefits upon Termination. Upon your termination of employment from
FirstEnergy for any reason, you will be provided with life, disability, medical and dental
coverage, whether insured or not insured, for one year thereafter, at FirstEnergy’s cost,
providing substantially similar benefits to those which you and your dependents were
receiving immediately prior to such termination. Any medical coverage provided through a
plan pursuant to this paragraph shall be treated as taxable income to you to the extent
necessary to prevent the applicable FirstEnergy benefit plan from being discriminatory
under Code Section 105(h).
	 
	 	(l)	 	Indemnification. The Company shall assume all the obligations of the
Allegheny Companies pursuant to Article 12 of the Allegheny Employment Agreement. As an
executive officer with FirstEnergy and to the fullest extent provided under its bylaws,
you shall be provided indemnification for any threatened or actual action or suit or
proceeding that arises as a result of the performance of your duties with the Company.
	 
	 	(m)	 	Expense Reimbursement. With respect to expenses incurred on and after the
Merger Date, the Company shall reimburse you for reasonable and necessary business
expenses and disbursements incurred in the course of performance of your duties under this
Agreement and in accordance with the policies and procedures applicable to other senior
executive officers of FirstEnergy. With respect to expenses incurred prior to the Merger
Date, you shall be reimbursed for such expenses pursuant to the terms of your Allegheny
Employment Agreement.

	4.	 	You acknowledge that all information including, but not limited to, proprietary information
and/or trade secrets, and all information disclosed to you as a consequence of your job
duties, which is not generally known to the public or industry concerning FirstEnergy’s
businesses, shall, except as required by law or legal process, remain confidential and shall
remain the property of FirstEnergy. You agree that during your employment period with
FirstEnergy that you will not work with or advise any persons conducting a business similar to
the business conducted by FirstEnergy except as part of your duties assigned by FirstEnergy.
For a period of one year following a termination of your employment with FirstEnergy for any
reason, you will not accept employment from or aid or render services, directly or indirectly,
as it relates to the non-regulated/competitive lines of business, to the following companies
or any of their affiliates, subsidiaries or successors: American Electric Power, Inc.; Exelon
Corporation; PPL, Inc.; Constellation Energy Group, Inc.; Potomac Electric and Power Company;
Dominion Resources,

 

 

	 	 	Inc.; Florida Power and Light Company; Edison International; Public
Service Enterprise Group; or DQE, Inc.
	 
	5.	 	The term of this Agreement (“Term”) shall be from the Merger Date until twenty-four months
following the Merger Date. Your employment status is considered to be “at will”, but if your
employment is terminated earlier for any reason, then the benefits payable per this Agreement
shall be paid in accordance with this Agreement.
	 
	6.	 	It is the intention and purpose of the Company that this Agreement shall be, at all relevant
times, in compliance with (or exempt from) Code Section 409A and all other applicable laws,
and this Agreement shall be so interpreted and administered.
	 
	 	 	For purposes of this Agreement, all references to “termination of employment” or forms and
derivations thereof shall refer to events which constitute a “separation from service” as
defined under and for purposes of Code Section 409A, and no amounts or benefits payable
hereunder in connection with your termination of employment shall be payable prior to the date
of such separation from service.
	 
	 	 	Notwithstanding anything in this Agreement to the contrary: (a) if you are a specified employee
(as defined in Code Section 409A(a)(2)(B)(i)) on the date of your separation from service and
any stock of the Company is then publicly traded on an established securities market or
otherwise, any payments made on account of your separation from service and, to the extent not
eligible to be made without the imposition of “additional tax” under Section 409(a)(1)(B) of
the Code, for the six-month period after the date of separation from service shall be
accumulated and paid in a lump-sum on the first business day after the six-month anniversary of
the date of your separation from service (or, if earlier, the date of your death) and (b) in
the event, and to the extent that, the provision or reimbursement of costs, including but not
limited to costs incurred in connection with any post-termination welfare benefits provided
under this Agreement, results in the deferral of compensation within the meaning of Code
Section 409A because the benefits are outside the scope of Section 1.409A-1(b)(9)(v) of the
Treasury Regulations or other relevant exemption under Code Section 409A, then the
reimbursement or provision of such benefits shall be provided as described in Section 13(b) of
the Allegheny Employment Agreement.
	 
	 	 	You and the Company may agree to take other actions to avoid the imposition of additional tax
on you under Section 409A(a)(1)(B) of the Code at such time and in such manner as permitted
under Code Section 409A. If you are entitled to a distribution within a period following an
event as permitted by Code Section 409A, you will have no right to designate the taxable year
of payment. For purposes of this Agreement, for payments designated to be made no later than
the 15th day of the third calendar month following the date of your termination of employment,
the month in which the termination of employment occurs is deemed to be the first calendar
month in that calculation (e.g., for a termination of employment on January 1, 2013, the
payment must be made no later than March 15, 2013).
	 
	 	 	Any benefits provided for under this Agreement that were earned while providing services to the
Allegheny Companies shall be paid by the company for which the services were performed.
FirstEnergy and FirstEnergy Corp. will, however, guarantee the payment of such benefits earned
with an Allegheny Company. In addition, FirstEnergy Corp. hereby also guarantees all the
obligations of the Company hereunder. In no event, however, shall this section or any other
provisions of this Agreement be construed to require the Company to provide any gross-up for
the tax consequences of any provisions of, or payments under, this Agreement and the Company
shall have no responsibility for tax or legal consequences to you (or your beneficiary)
resulting from the terms or operation of this Agreement.

 

 

	7.	 	This Agreement shall be governed by the laws of the State of Ohio, without regard to
conflicts of law principles.
	 
	8.	 	This Agreement may be executed by the parties hereto in two counterparts, each of which will
be deemed an original, but all such counterparts shall constitute one and the same instrument
and all signatures need not appear on any one counterpart.

 

 

If the above is agreeable to you, please sign where indicated and return a copy to me for our
records. You should retain a copy for yourself. If you have any questions, please do not hesitate
to call.

Sincerely,

Anthony J. Alexander

President & Chief Executive Officer

FirstEnergy Corp.

FirstEnergy Service Company

Accepted
and agreed this
22nd day of March, 2010

/s/ Paul J. Evanson

Paul J. EvansonExhibit 10(vv)

Exhibit 10(vv)

iCAD, INC.

INCENTIVE STOCK OPTION AGREEMENT

AGREEMENT, entered into                      (the “Date of Grant”), by and between iCAD, Inc. (the
“Company”) and                      (“Optionee”).

WHEREAS, the Company has adopted the 2007 Stock Incentive Plan (the “Plan”);

WHEREAS, the Company wishes to grant to the Optionee an option to purchase shares of the Company’s
common stock, $.01 par value, (the “Common Stock”) under the Plan pursuant to the terms of the
Plan;

WHEREAS, the Company desires to memorialize the grant of the option to the Optionee by entering
into this stock option agreement with the Optionee;

WHEREAS, the Company and the Optionee understand and agree that unless otherwise defined herein any
terms used herein have the same meanings as in the Plan.

THEREFORE, in consideration of the promises set forth below, the parties hereto agree as follows:

	1.	 	GRANT OF OPTION

The Company hereby grants to the Optionee the option (the “Option”) to purchase all or any part of
an aggregate of                      shares of its Common Stock (the “Shares”), on the terms and conditions
and subject to all the limitations set forth herein and in the Plan, which is incorporated herein
by reference. The Optionee acknowledges receipt of a copy of the Plan.

	2.	 	OPTION EXERCISE PRICE

The per share purchase price to be paid by Optionee for the Shares covered by the Option in the
event of an exercise of the Option shall be $_____.

	3.	 	WHEN OPTIONS ARE EXERCISABLE

The Option shall become exercisable as to one third or 
 _____ 

shares commencing twelve months from
the Date of Grant, one third or 
 _____ 

shares commencing twenty four months from the Date of Grant
and one third or
 _____ 

shares commencing thirty six months from the Date of Grant. The option
expires at midnight (Nashua, New Hampshire USA time) five years from the Date of Grant or earlier
subject to paragraph 4 below.

	4.	 	TERMINATION OF EMPLOYMENT

	 	4.1	 	Generally: Regardless of what Paragraph 3 hereof says, if Optionee’s employment with
the Company should be terminated other than by Early Retirement, Death or Disability (as
defined below) or for Cause, then Optionee has until the earlier of (i) the expiration
date of the Options set forth in Paragraph 3 hereof or (ii) ninety (90) days after the
date of termination, to exercise those Options which were exercisable on the date of
termination. If Optionee’s employment with the Company should be terminated by the
Company for Cause or due to Early Retirement the unexercised portion of the Option shall
terminate on the date of termination of Optionee’s employment.

 

 

 

	 	4.2	 	Death or Disability: In the event of the Death or Disability of Optionee prior to the
expiration of this Option, the following provisions shall apply:

	 	4.2.1	 	If Optionee, at the time of Death or Disability, has been continuously
employed by the Company (as determined by the Compensation Committee or other
committee that at the time is responsible for administration of the Plan (the
“Committee”)in its sole discretion) since the Date of Grant, then the Option may be
exercised; (A) by Optionee within the earlier of (i) the expiration date of the
Options set forth in Paragraph 3 hereof or (ii) one (1) year following the date
Disability commenced, but only to the extent Optionee is entitled to exercise such
Option on the date his or her Disability commenced; or (B) by Optionee’s estate, or
by a person who acquired the right to exercise the Option because of Optionee’s will
or the laws of descent or distribution, within the earlier of (i) the expiration date
of the Options set forth in Paragraph 3 hereof or (ii) one (1) year from the date of
Optionee’s Death, but only to the extent of which Optionee is entitled to exercise
the Option at the date of Death. For the purpose of this Agreement, the term
“Disability” shall have the meaning given to it in section 22(e)(3) of the Code.
Whether Optionee suffers a Disability shall be determined by the Committee in its
sole discretion.
	 
	 	4.2.2	 	If Optionee dies within thirty (30) days after the date of termination of
employment (other than termination for Cause, Disability or Early Retirement, the
Option may be exercised at any time within the earlier of (i) the expiration date of
the Options set forth in Paragraph 3 hereof or (ii) one (1) year following the date
of Death, by Optionee’s estate or by a person who acquired the right to exercise the
Option because of Optionee’s will or the laws of descent or distribution, but only to
the extent Optionee is entitled to exercise the Option at the date of termination.

	 	4.3	 	Cancellation of Options: By giving written notice to the Optionee, the Company in
its sole discretion may cancel this Option, in whole or in part, in the following circumstance (i)
where Optionee enters into competition with the Company.

	5.	 	MANNER OF OPTION EXERCISE

	 	5.1	 	Notice: Optionee may exercise this Option, in whole or in part from time to time,
subject to the
conditions contained in the Plan and this Agreement, by giving
written notice of exercise to the Company at its principal executive office. That notice
must specify the number of Shares with respect to which the Option is being exercised.
Optionee must also pay in full the total purchase price for the Option Shares purchased.
Subject to Paragraph 5.3 below, as soon as practical after receipt of notice and payment,
Optionee shall be recorded on the books of the Company as the owner of the Option Shares
and the Company shall deliver to Optionee one or more duly issued stock certificates
evidencing such ownership. Until certificates for the Option Shares are issued to
Optionee, Optionee shall not have any rights as a stockholder of the Company.
	 
	 	5.2	 	Payment: Optionee can pay the total purchase price of the Shares to be purchased upon
exercise of the Option solely in cash or may ask the Company’s Board of Directors (the
“Board”) or other administrator of the Plan for permission to be allowed to pay either by
transfer to the Company of previously acquired shares of Common Stock of the Company with a
then current aggregate Fair Market Value equal to such total purchase price, or by a
combination of cash and previously acquired shares of Common Stock. For purposes of the
Agreement; (i) “Previously Acquired Shares” shall mean only shares of Common Stock of the
Company that are already owned by the Optionee at the time of exercise and (ii) “Fair
Market Value” shall be determined as set forth in the Plan.

 

 

 

	 	5.3	 	Limitation on Obligation to Issue: The Company shall not be required to sell or issue
any Shares under this Option if, in the sole opinion of the Committee or other
administrator of the Plan; (i) the issuance of such shares would constitute a violation by
Optionee or the Company of any applicable law or regulation including, without limitation,
federal and state securities law, or (ii) the consent or approval of any governmental body
is necessary or desirable in connection with the issuance of such Shares. The Company
shall also not be required to issue any Shares under this Option if it requests and does
not receive from the Optionee any investment representations or other information in order
for the Company to comply with applicable laws or regulations. Among other things, the
Company may request that the Optionee provide it with an opinion of counsel reasonably
acceptable to the Company that the Shares to be issued upon exercise of the Option may be
issued without registration under the Securities Act of 1933, as amended.

	6.	 	LEGENDS

Each certificate representing any shares of Stock issued to Optionee hereunder may have endorsed
thereon a legend in a form as may be determined by the Company to be necessary, in its sole
discretion, reflecting any limitations on resale.

	7.	 	CHANGES IN CAPITAL STRUCTURE

	 	7.1	 	If the Company effects a stock dividend of its Common Stock or a split of its Common
Stock, the number of Shares that may be purchased upon the exercise of the unexercised
portion of this Option shall be increased proportionately and the exercise price per Share
proportionately decreases. In the event the Company declares or authorizes a reverse stock
split of its Common Stock or combination of shares of its Common Stock, the number of
Shares that may be purchased upon the exercise of the unexercised portion of this Option
shall be shall be proportionately reduced and the exercise price per Share shall be
proportionately increased.
	 
	 	7.2	 	If the Company’s Common Stock shall be changed into a different class of shares or if,
because of reorganization, recapitalization, merger or consolidation it is necessary to
exchange the Shares for shares of another company, then the appropriate substitution or
exchange shall be made in the Shares subject to this Option. The Committee or other
administrator of the Plan may make such adjustments in the number, kind, exercise date of
the Shares as is necessary. However, none of these changes shall give the Optionee
additional benefits or increase the differential between the exercise price and the Fair
Market Value.
	 
	 	7.3	 	If the Company is dissolved or liquidated, or if the Company is not the surviving or
resulting corporation in connection with a merger or consolidation, the Committee or other
administrator of the Plan (in its sole discretion) may allow Optionee the right to exercise
this Option prior to the occurrence of the event which would otherwise terminate this
Option.

	8.	 	DISPOSITION OF STOCK

Prior to making a disposition (as defined in Section 425(c) of the Code) of any Shares acquired
pursuant to the exercise of this Option before the expiration of two years after the Date of Grant
or before the expiration of one year after the date on which such shares of Stock were transferred
to the Optionee pursuant to exercise of this Option, the Optionee shall send written notice to the
Company of the proposed date of such disposition, the number of shares to be disposed of, the
amount of proceeds to be received from such disposition and any other information relating to such
disposition that the Company may reasonably request.

	9.	 	WITHHOLDING TAXES

The Optionee hereby authorizes the Company to withhold and deduct from future wages of Optionee all
legally required amounts necessary to satisfy any federal, state or local withholding tax
requirements attributable to any action by Optionee that causes the Option to cease to qualify as an
Incentive Stock Option including, without limitation, a disposition of shares of Shares described in Paragraph 8,
above. In the event that the Company is unable to withhold such
amounts, for whatever reason, Optionee hereby
agrees to pay to the Company an amount equal to the amount the Company would otherwise be required to withhold
under federal, state or local law.

 

 

 

	10.	 	NON TRANSFERABILITY

This Option shall not be transferable by Optionee, either voluntarily or involuntarily, except by
will or the laws of descent and distribution, and then only to the extent provided in Paragraph
4.2. Any attempt to transfer this Option other than as permitted shall void the Option. The
Option shall be exercisable during Optionee’s lifetime only by Optionee.

	11.	 	LIMITATION ON LIABILITY

Nothing in this agreement shall be construed to: (i) limit in any way the right of the Company to
terminate the employment of Optionee at any time, or (ii) be evidence of any agreement or
understanding, express or implied, that the Company will employ Optionee in any particular
position, at any particular rate of compensation or for any particular period of time.

	12.	 	BINDING EFFECT

This agreement shall be binding upon the heirs, executors, administrators and successors of the
parties hereto.

	13.	 	GOVERNING LAW

This Agreement and all rights and obligations in it shall be construed in accordance with the Plan
and governed by the laws of the State of Delaware. The parties hereto agree to submit to the
personal jurisdiction of courts sitting in the State of New Hampshire for the purpose of resolving
any dispute under this Agreement.

	14.	 	INTEGRATION

This Agreement supersedes any prior agreement, discussions or understandings between the parties on
the subject matter covered by this Agreement.

	15.	 	SEVERABILITY

Should any provision of the Agreement be deemed by a court of competent jurisdiction to be
unenforceable, the remaining provisions shall continue to be in full force and effect.

	16.	 	AMENDMENT

This Agreement may only be amended by written agreement signed by both parties, by amendment of the
Plan or as provided for in the Plan document.

IN WITNESS WHEREOF, the parties have executed this Agreement effective on the Date of Grant.

ICAD, INC.

BY:                                        

ITS: Executive Vice President and Chief Financial Officer

OPTIONEE:                                        

Name Printed:                                        

 

 

 

iCAD Inc.

INCENTIVE STOCK OPTION AGREEMENT

EXHIBIT 1

NAME OF OPTIONEE:

DATE OF GRANT:

NUMBER OF OPTION SHARES ISSUABLE UPON FULL OPTION EXERCISE:

EXERCISE PRICE:

EXERCISE SCHEDULE

	 	 	 
	Initial Date of Exercisability
	 	Number of Shares with respect to which Option

Is initially exercisable

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