Document:

EX 10.2

    EXHIBIT
      10.2

    

    POSITRON
      CORPORATION

     

    2005
      STOCK OPTION AGREEMENT

     

    (Joseph
      G. Oliverio)

     

    R
      E C
      I T A L S
      :

     

     

    WHEREAS
      the Board has adopted the Plan for the purpose of retaining the services of
      selected Employees, Officers, members of the Board or of the board of directors
      of any Parent or Subsidiary and consultants and other independent advisors
      who
      provide services to the Corporation (or any Parent or Subsidiary);

     

    WHEREAS
      the Optionee is to render valuable services to the Corporation (or a Parent
      or
      Subsidiary), and this Agreement is executed pursuant to, and is intended to
      carry out the purposes of, the Plan in connection with the Corporation's grant
      of an option to Optionee; and

     

    WHEREAS
      all capitalized terms in this Agreement shall have the meaning assigned to
      them
      in the attached Appendix.

     

    NOW,
      THEREFORE, it is hereby agreed as follows:

     

    1.    Grant
      of Option.
      The
      Corporation hereby grants to Optionee, as of the Grant Date, an option to
      purchase up to the number of Option Shares specified in the Grant Notice. The
      Option Shares shall be purchasable from time to time during the option term
      specified in Section 2 hereof at the Exercise Price.

     

    2.    Option
      Term.
      This
      Option shall expire at the close of business on the Expiration Date, unless
      sooner terminated in accordance with Sections 5 or 6 hereof.

     

    3.    Limited
      Transferability.
      This
      Option shall be neither transferable nor assignable by Optionee other than
      by
      will or by the laws of descent and distribution following Optionee's death
      and
      may be exercised, during Optionee's lifetime, only by Optionee. However, if
      this
      Option is designated a Non-Statutory Option in the Grant Notice, then this
      Option may, (i) in connection with the Optionee's estate plan, 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 the Optionee and/or one or more such family members or (ii) be assigned
      in
      whole or in part to the Optionee's former spouse 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.
      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 this Agreement, including (without limitation) the limited time
      period during which the option may be exercised following the Optionee's
      death.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    4.    Dates
      of Exercise.
      This
      Option shall become exercisable for the Option Shares in one or more
      installments as specified in the Grant Notice, subject to the special vesting
      acceleration provisions of Paragraph 6. As the Option becomes exercisable for
      such installments, those installments shall accumulate and the Option shall
      remain exercisable for the accumulated installments until the Expiration Date
      or
      sooner termination of the option term under Sections 5 or 6 hereof.

     

    5.    Cessation
      of Service.
      The
      option term specified in Section 2 hereof shall terminate (and this Option
      shall
      cease to be outstanding) prior to the Expiration Date should any of the
      following provisions become applicable:

     

    (a)    Should
      Optionee cease to remain in Service for any reason (other than death, Permanent
      Disability or Misconduct) while this Option is outstanding, then the period
      for
      exercising this Option shall be reduced to a three (3) month period commencing
      with the date of such cessation of Service, but in no event shall this Option
      be
      exercisable at any time after the Expiration Date.

     

    (b)    Should
      Optionee die while this Option is outstanding, then the personal representative
      of Optionee's estate or the person or persons to whom the Option is transferred
      pursuant to Optionee's will or in accordance with the laws of descent and
      distribution, or any person or trust to whom all or a portion of this Option
      was
      previously transferred in accordance with Section 3 hereof or the
      designated beneficiary or beneficiaries of this option shall have the right
      to
      exercise this Option. Such right shall lapse, and this Option shall cease to
      be
      outstanding, upon the earlier of: (i) the expiration of the twelve (12) month
      period measured from the date of Optionee's death; or (ii) the Expiration
      Date.

     

    (c)    Should
      Optionee cease Service by reason of Permanent Disability while this Option
      is
      outstanding, then the period for exercising this Option shall be reduced to
      a
      twelve (12) month period commencing with the date of such cessation of Service,
      but in no event shall this Option be exercisable at any time after the
      Expiration Date.

     

    (d)    Should
      Optionee's Service be terminated for a reason other than "Without Cause" (as
      defined in Optionee's Employment Agreement dated December 27, 2005), during
      the
      limited period of post-Service exercisability, this Option may be exercised
      for
      the number of vested Option Shares at the time of Optionee's cessation of
      Service. Should Optionee's Service be terminated "Without Cause" (as defined
      in
      Optionee's Employment Agreement dated December 27, 2005), during the limited
      period of post-Service exercisability, this Option may be exercised in the
      aggregate for the number of vested Option Shares for which the Option would
      have
      been exercisable for had Optionee continued in Service through the remainder
      of
      the applicable calendar year. Upon the expiration of such limited exercise
      period or (if earlier) upon the Expiration Date, this Option shall terminate
      and
      cease to be outstanding for any otherwise exercisable Option Shares for which
      the Option has not been exercised. However, this Option shall, immediately
      upon
      Optionee's cessation of Service for any reason, terminate and cease to be
      outstanding with respect to any Option Shares for which this Option is not
      otherwise at that time exercisable.

     

    
      
         

      

      
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    (e)    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
      Optionee's Service be terminated for Misconduct or should Optionee otherwise
      engage in Misconduct while this option is outstanding, then this Option shall
      terminate immediately and cease to remain outstanding.

     

    6.    Special
      Acceleration of Option.

     

    (a)    The
      Option, to the extent outstanding at the time of a Change in Control transaction
      but not otherwise fully exercisable, shall automatically accelerate so that
      this
      Option shall, immediately prior to the effective date of such Change in Control,
      become exercisable for all of the Option Shares at the time subject to this
      option and may be exercised for any or all of those Option Shares as fully
      vested shares of Common Stock. Notwithstanding the foregoing, this Option shall
      not become exercisable on such an accelerated basis if and to the extent: (i)
      this Option is, in connection with the Change in Control, to be 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; or (ii) this Option
      is to be 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
      Option Shares for which this Option is not otherwise at that time exercisable
      (the excess of the Fair Market Value of those Option Shares over the aggregate
      Exercise Price payable for such shares) and provides for subsequent payout
      in
      accordance with the same option exercise/vesting schedule set forth in the
      Grant
      Notice.

     

    (b)    Immediately
      following the Change in Control, this Option shall terminate and cease to be
      outstanding, except to the extent 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.

     

    (c)    If
      this
      Option is assumed in connection with a Change in Control (or otherwise continued
      in full force and effect), then this Option shall be appropriately adjusted,
      immediately after such Change in Control, to apply to the number and class
      of
      securities or other property which would have been issuable to Optionee in
      consummation of such Change in Control had the Option been exercised immediately
      prior to such Change in Control, and appropriate adjustments shall also be
      made
      to the Exercise Price, provided the aggregate Exercise Price shall remain the
      same.

     

    (d)    Notwithstanding
      the foregoing, immediately upon an Involuntary Termination of Optionee's Service
      within eighteen (18) months following a Change in Control transaction, the
      Option, to the extent outstanding at the time but not otherwise fully
      exercisable, shall automatically accelerate so that the Option shall become
      immediately exercisable for all the Option Shares at the time subject to the
      Option and may be exercised for any or all of those Option Shares as fully
      vested shares. The Option as accelerated shall remain so exercisable until
      the
      earlier of: (i) the Expiration Date; or (ii) the expiration of the one (1)
      year
      period measured from the date of the Optionee's Involuntary
      Termination.

     

    
      
         

      

      
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    (e)    This
      Option may also be subject to acceleration in accordance with the terms of
      any
      special Addendum attached to this Agreement.

     

    2.    Adjustment
      in Option Shares.
      Should
      any change be 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 total number and/or class of securities subject to this Option;
      and
      (ii) the Exercise Price in order to reflect such change and thereby preclude
      a
      dilution or enlargement of benefits hereunder.

     

    3.    Stockholder
      Rights.
      The
      holder of this Option shall not have any stockholder rights with respect to
      the
      Option Shares until such person shall have exercised the Option, paid the
      Exercise Price and become a holder of record of the purchased
      shares.

     

    4.    Manner
      of Exercising Option.

     

    (a)    In
      order
      to exercise this Option with respect to all or any part of the Option Shares
      for
      which this Option is at the time exercisable, Optionee (or any other person
      or
      persons exercising the Option) must take the following actions:

     

    (i)    To
      the
      extent the Option is exercised for vested Option Shares, execute and deliver
      to
      the Corporation a Notice of Exercise for the Option Shares for which the Option
      is exercised. To the extent the Option is exercised for unvested Option Shares,
      execute and deliver to the Corporation a Purchase Agreement for those unvested
      Option Shares. In connection with the Purchase Agreement, any certificate issued
      upon the exercise of the Option shall bear legends as set forth in the Purchase
      Agreement.

     

    (ii)    Pay
      the
      aggregate Exercise Price for the purchased shares in one or more of the
      following forms: 

     

    (A)    cash
      or
      check made payable to the Corporation; or 

     

    (B)    a
      promissory note payable to the Corporation, but only to the extent authorized
      by
      the Plan Administrator in accordance with Section 14 hereof;
      or

     

    (C)    shares
      of
      Common Stock held by Optionee (or any other person or persons exercising the
      option) 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 

     

    (D)    through
      a
      special sale and remittance procedure pursuant to which Optionee (or any other
      person or persons exercising the option) shall concurrently provide irrevocable
      instructions to 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 to the Corporation to deliver
      the
      certificates for the purchased shares directly to such brokerage firm in order
      to complete the sale.

     

    
      
         

      

      
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    Except
      to
      the extent the sale and remittance procedure is utilized in connection with
      the
      Option exercise, payment of the Exercise Price must accompany the Notice of
      Exercise or Purchase Agreement, as applicable, delivered to the Corporation
      in
      connection with the Option exercise.

     

    (iii)    Furnish
      to the Corporation appropriate documentation that the person or persons
      exercising the Option (if other than Optionee) have the right to exercise this
      Option.

     

    (iv)    Make
      appropriate arrangements with the Corporation (or Parent or Subsidiary employing
      or retaining Optionee) for the satisfaction of all Federal, state and local
      income and employment tax withholding requirements applicable to the option
      exercise.

     

    (b)    As
      soon
      as practical after the Exercise Date, the Corporation shall issue to or on
      behalf of Optionee (or any other person or persons exercising this Option)
      a
      certificate for the purchased Option Shares, with the appropriate legends
      affixed thereto.

     

    (c)    In
      no
      event may this Option be exercised for any fractional shares.

     

    5.    No
      Impairment of Rights.
      This
      Agreement shall not in any way affect the right of the Corporation to adjust,
      reclassify, reorganize or otherwise make changes in its capital or business
      structure or to merge, consolidate, dissolve, liquidate or sell or transfer
      all
      or any part of its business or assets. In addition, this Agreement shall not
      in
      any way be construed or interpreted so as to affect adversely or otherwise
      impair the rights of the Corporation (or any Parent or Subsidiary employing
      or
      retaining Optionee) or of Optionee, which rights are hereby expressly reserved
      by each, to terminate Optionee's Service at any time for any reason, with or
      without cause.

     

    6.    Compliance
      with Laws and Regulations.

     

    (a)    The
      exercise of this Option and the issuance of the Option Shares upon such exercise
      shall be subject to compliance by the Corporation and Optionee with all
      applicable requirements of law relating thereto and with all applicable
      regulations of any Stock Exchange, if applicable, on which the Common Stock
      may
      be listed for trading at the time of such exercise and issuance.

     

    (b)    The
      inability of the Corporation to obtain approval from any regulatory body having
      authority deemed by the Corporation to be necessary to the lawful issuance
      and
      sale of any Common Stock pursuant to this Option shall relieve the Corporation
      of any liability with respect to the non-issuance or sale of the Common Stock
      as
      to which such approval shall not have been obtained. The Corporation, however,
      shall use its best efforts to obtain all such approvals.

     

    7.    Successors
      and Assigns.
      Except
      to the extent otherwise provided in Sections 3 and 6 hereof, the provisions
      of
      this Agreement shall inure to the benefit of, and be binding upon, the
      Corporation and its successors and assigns and Optionee, Optionee's assigns
      and
      the legal representatives, heirs and legatees of Optionee's estate.

     

    
      
         

      

      
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    8.    Notices.
      Any
      notice required to be given or delivered to the Corporation under the terms
      of
      this Agreement shall be in writing and addressed to the Corporation at its
      principal corporate offices. Any notice required to be given or delivered to
      Optionee shall be in writing and addressed to Optionee at the address indicated
      below Optionee's signature line on the Grant Notice. All notices shall be deemed
      effective upon personal delivery or upon deposit in the U.S. mail, postage
      prepaid and properly addressed to the party to be notified.

     

    9.    Financing.
      The
      Plan Administrator may, in its absolute discretion and without any obligation
      to
      do so, permit Optionee to pay the Exercise Price for the purchased Option Shares
      by delivering a full-recourse promissory note payable to the Corporation. The
      terms of any such promissory note (including the interest rate, the requirements
      for collateral and the terms of repayment) shall be established by the Plan
      Administrator in its sole discretion.

     

    10.    Construction.
      This
      Agreement and the Option evidenced hereby are made and granted pursuant to
      the
      Plan and are in all respects limited by and subject to the terms of the Plan.
      All decisions of the Plan Administrator with respect to any question or issue
      arising under the Plan or this Agreement shall be conclusive and binding on
      all
      persons having an interest in this Option.

     

    11.    Governing
      Law.
      The
      interpretation, performance and enforcement of this Agreement shall be governed
      by the laws of the State of Texas without resort to that State's
      conflict-of-laws rules.

     

    12.    Excess
      Shares.
      If the
      Option Shares covered by this Agreement exceed, as of the Grant Date, the number
      of shares of Common Stock which may without stockholder approval be issued
      under
      the Plan, then this Option shall be void with respect to those excess shares,
      unless stockholder approval of an amendment sufficiently increasing the number
      of shares of Common Stock issuable under the Plan is obtained in accordance
      with
      the provisions of the Plan.

     

    13.    Optionee
      Undertaking.
      Optionee hereby agrees to take whatever additional action and execute whatever
      additional documents the Corporation may deem necessary or advisable in order
      to
      carry out or effect one or more of the obligations or restrictions imposed
      on
      either Optionee or the Option Shares pursuant to the provisions of this
      Agreement.

     

    14.    Representation
      by Counsel.
      Each
      party hereby agrees and acknowledges that (i) such party has had the
      opportunity to consult with independent legal, tax and financial counsel of
      each
      party's choice, in order to be advised with respect to the effect of this
      Agreement, the Notice of Exercise and the Purchase Agreement and (ii) neither
      the Corporation nor its attorneys have provided legal, tax or financial advice
      of any nature to Optionee.

     

    15.    Additional
      Terms Applicable to an Incentive Option.
      In the
      event this Option is designated an Incentive Option in the Grant Notice, the
      following terms and conditions shall also apply to the grant: 

     

    (a)    This
      option shall cease to qualify for favorable tax treatment as an Incentive Option
      if (and to the extent) this Option is exercised for one or more Option Shares:
      (i) more than three (3) months after the date Optionee ceases to be an
      Employee for any reason other than death or Permanent Disability; or (ii) more
      than twelve (12) months after the date Optionee ceases to be an Employee by
      reason of death or Permanent Disability.

     

    
      
         

      

      
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    (b)    No
      installment under this Option shall qualify for favorable tax treatment as
      an
      Incentive Option if (and to the extent) the aggregate Fair Market Value
      (determined at the Grant Date) of the Common Stock for which such installment
      first becomes exercisable hereunder would, when added to the aggregate value
      (determined as of the respective date or dates of grant) of the Common Stock
      or
      other securities for which this option or any other Incentive Options granted
      to
      Optionee prior to the Grant Date (whether under the Plan or any other option
      plan of the Corporation or any Parent or Subsidiary) first become exercisable
      during the same calendar year, exceed One Hundred Thousand Dollars ($100,000.00)
      in the aggregate. Should such One Hundred Thousand Dollar ($100,000.00)
      limitation be exceeded in any calendar year, this Option shall nevertheless
      become exercisable for the excess shares in such calendar year as a
      Non-Statutory Option.

     

    (c)    Should
      the exercisability of this Option be accelerated upon a Change in Control
      transaction, then this Option shall qualify for favorable tax treatment as
      an
      Incentive Option only to the extent the aggregate Fair Market Value (determined
      at the Grant Date) of the Common Stock for which this Option first becomes
      exercisable in the calendar year in which the Change in Control occurs does
      not,
      when added to the aggregate value (determined as of the respective date or
      dates
      of grant) of the Common Stock or other securities for which this Option or
      one
      or more other Incentive Options granted to Optionee prior to the Grant Date
      (whether under the Plan or any other option plan of the Corporation or any
      Parent or Subsidiary) first become exercisable during the same calendar year,
      exceed One Hundred Thousand Dollars ($100,000.00) in the aggregate. Should
      the
      applicable One Hundred Thousand Dollar ($100,000.00) limitation be exceeded
      in
      the calendar year of such Change in Control, the Option may nevertheless be
      exercised for the excess shares in such calendar year as a Non-Statutory
      Option.

     

    (d)    Should
      Optionee hold, in addition to this Option, one or more other options to purchase
      Common Stock which become exercisable for the first time in the same calendar
      year as this Option, then the foregoing limitations on the exercisability of
      such options as Incentive Options shall be applied on the basis of the order
      in
      which such options are granted.

     

    
      
         

      

      
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    APPENDIX

     

     

    The
      following definitions shall be in effect under the Agreement:

     

    A.    Agreement
      shall
      mean this 2005 Stock Option Agreement.

     

    B.    Board
      shall
      mean the Corporation's Board of Directors.

     

    C.    Change
      in Control
      shall
      mean a change in ownership or control of the Corporation effected through any
      of
      the following transactions:

     

    (i)    a
      merger,
      consolidation or reorganization approved by the Corporation's stockholders,
      unless securities representing more than fifty percent (50%) of the total
      combined voting power of the successor corporation are immediately thereafter
      beneficially owned, directly or indirectly and in substantially the same
      proportion, by the persons who beneficially owned the Corporation's outstanding
      voting 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.

     

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

     

    E.    Common
      Stock
      shall
      mean shares of the Corporation's common stock.

     

    F.    Corporation
      shall
      mean Positron Corporation, a Texas corporation.

     

    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 Option shall have been exercised in accordance with
      Section 4 of the Agreement.

     

    
      
         

      

      
        
          APPENDIX
            

          -1-

        

        
          

        

      

      
         

      

    

     

    I.    Exercise
      Price
      shall
      mean the exercise price per Option Share as specified in the Grant
      Notice.

     

    J.    Expiration
      Date
      shall
      mean the date on which the Option expires as specified in the Grant
      Notice.

     

    K.    Fair
      Market Value
      per
      share of Common Stock on any relevant date shall be determined in accordance
      with the Plan.

     

    L.    Grant
      Date
      shall
      mean the date of grant of the Option as specified in the Grant
      Notice.

     

    M.    Grant
      Notice
      shall
      mean the Notice of Grant of Stock Option accompanying the Agreement, pursuant
      to
      which Optionee has been informed of the basic terms of the Option evidenced
      hereby.

     

    N.    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.

     

    O.    Incentive
      Option
      shall
      mean an option which satisfies the requirements of Code Section
      422.

     

    P.    Involuntary
      Termination
      shall
      mean the termination of Optionee's Service by reason of:

     

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

     

    (ii)    Optionee's
      voluntary resignation following (A) a change in Optionee's position with the
      Corporation (or Parent or Subsidiary employing Optionee) which materially
      reduces Optionee's duties and responsibilities or the level of management to
      which Optionee reports, (B) a reduction in Optionee's level of compensation
      (including base salary, fringe benefits and target bonus under any corporate
      performance based bonus or incentive programs) by more than fifteen percent
      (15%) or (C) a relocation of Optionee'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 Optionee's consent.

     

    Q.    Misconduct
      shall
      mean the commission of any act of fraud, embezzlement or dishonesty by Optionee,
      any unauthorized use or disclosure by Optionee of confidential information
      or
      trade secrets of the Corporation (or any Parent or Subsidiary), or any
      intentional wrongdoing by Optionee, whether by omission or commission, which
      adversely affects the business or affairs of the Corporation (or any Parent
      or
      Subsidiary) in a material manner. This shall not limit the grounds for the
      dismissal or discharge of Optionee or any other individual in the Service of
      the
      Corporation (or any Parent or Subsidiary).

     

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

     

    
      
         

      

      
        
          APPENDIX
            

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    S.    Non-Statutory
      Option
      shall
      mean an option not intended to satisfy the requirements of Code Section
      422.

     

    T.    Notice
      of Exercise
      shall
      mean the notice of exercise in the form attached hereto as Exhibit
      I.

     

    U.    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.

     

    V.    Option
      shall
      mean the Option granted pursuant to this Agreement.

     

    W.    Option
      Shares
      shall
      mean the number of shares of Common Stock subject to the Option as specified
      in
      the Grant Notice.

     

    X.    Optionee
      shall
      mean the person to whom the Option is granted as specified in the Grant
      Notice.

     

    Y.    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.

     

    Z.    Permanent
      Disability
      shall
      mean the inability of Optionee to engage in any substantial gainful activity
      by
      reason of any medically determinable physical or mental impairment which can
      be
      expected to result in death or has lasted or can be expected to last for a
      continuous period of twelve (12) months or more.

     

    AA.    Plan
      shall
      mean the Corporation's Amended and Restated 2005 Stock Incentive
      Plan.

     

    BB.    Plan
      Administrator
      shall
      mean either the Board or a committee of the Board acting in its capacity as
      administrator of the Plan.

     

    CC.    Service
      shall
      mean the Optionee's performance of services for the Corporation (or any Parent
      or Subsidiary) in the capacity of an Employee, an Officer, a member of the
      board
      of directors or a consultant or independent advisor.

     

    DD.    Stock
      Exchange
      shall
      mean the American Stock Exchange or the New York Stock Exchange.

     

    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.

     

    
      
         

      

      
        
          APPENDIX
            

          -3-

        

        
          

        

      

      
         

      

    

     

    EXHIBIT
      I

     

    NOTICE
      OF EXERCISE

     

    I
      hereby
      notify Positron Corporation (the "Corporation") that I elect to purchase
      _____________________ shares of the Corporation's Common Stock (the "Purchased
      Shares") at the option exercise price of _____________ per share (the "Exercise
      Price") pursuant to that certain option (the "Option") granted to me under
      the
      Corporation's Amended and Restated 2005 Stock Incentive Plan on
      _____________________, 200_.

     

    Concurrently
      with the delivery of this Notice of Exercise to the Corporation, I shall hereby
      pay to the Corporation the Exercise Price for the Purchased Shares in accordance
      with the provisions of my agreement with the Corporation (or other documents)
      evidencing the Option and shall deliver whatever additional documents may be
      required by such agreement as a condition for exercise. Alternatively, I may
      utilize the special broker-dealer sale and remittance procedure specified in
      my
      agreement to effect payment of the Exercise Price. 

    
      	 	 
	
              _____________________________,
                200_

              Date

            	
            
	 	________________________________
	 	
              Optionee

            
	 	
              Address:______________________________

            
	
              Print
                name in exact manner it is to appear on the stock
                certificate:

            	_________________________________
	
              Address
                to which certificate is to be sent, if different from address
                above:

            	_________________________________
	
              Social
                Security Number:

            	_________________________________
	
              Employee
                Number

            	_________________________________

    

     

     

    
      
         

      

        EXHIBIT
          IEX 10.3

    EXHIBIT
      10.3

    

    POSITRON
      CORPORATION

     

    NOTICE
      OF GRANT OF STOCK OPTION 

     

    Notice
      is
      hereby given of the following stock option grant (the "Option") to purchase
      shares (the "Option Shares") of Common Stock of Positron Corporation, a Texas
      corporation (the "Corporation"):

    
      	 	 	 
	
              Option
                Number:

            	
              2005-5

            	 
	 	 	 
	
              Optionee:

            	
              Joseph
                G. Oliverio

            	 
	 	 	 
	
              Grant
                Date:

            	
              December
                27, 2005

            	 
	 	 	 
	
              Number
                of Option Shares:

            	
              7,500,000

            	 
	 	 	 
	
              Date
                Exercisable:

            	
              Immediately
                Exercisable*

            	 
	 	 	 
	
              Expiration
                Date:

            	
              December
                27, 2010

            	 
	 	 	 
	
              Exercise
                Price:

            	
              $0.05
                per share

            	 
	 	 	 
	
              Type
                of Option:

            	
              x 
Incentive
                Stock Option

            	
              o 
Non-Statutory
                Stock Option

            
	 	 	 
	
              Vesting
                Schedule:

            	
              This
                option may be exercised in whole or in part, in accordance with the
                following vesting schedule:

            

    

     

    
      	
              Date
                of Vesting(1)

            	 	
              Number
                of Shares

            	 	
              Total
                Vested

            	 
	
              December
                27, 2005

            	 	 	
              2,000,000

            	 	 	
              2,000,000

            	 
	
              December
                27, 2006

            	 	 	
              2,000,000

            	 	 	
              4,000,000

            	 
	
              December
                27, 2007

            	 	 	
              3,500,000

            	 	 	
              7,500,000

            	 

    

     

    (1)    Should
      Optionee's Service be terminated "Without Cause" (as defined in Optionee's
      Employment Agreement dated December 27, 2005), Optionee shall be credited with
      the additional vesting he would have enjoyed had his Service continued through
      the end of the calendar year in which such termination occurred.

     

    *In
      no
      event shall the Option become exercisable until the Corporation shall have
      amended its articles of incorporation to increase its authorized shares of
      Common Stock to account for the shares of Common Stock reserved under the
      Amended and Restated 2005 Stock Incentive Plan (the "Plan").

     

    The
      Optionee understands and agrees that the Option is granted subject to and in
      accordance with the terms of the Plan. The Optionee further agrees to be bound
      by the terms of the Plan and the terms of the Option as set forth in the Stock
      Option Agreement attached hereto as Exhibit A (the "Stock Option
      Agreement"). Optionee hereby acknowledges receipt of a copy of the official
      prospectus for the Plan in the form attached hereto as Exhibit B. A copy of
      the Plan is available upon request made to the Corporate Secretary at the
      Corporation's principal offices.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    No
      Employment or Service Contract.
      Nothing
      in this Notice or in the attached Stock Option Agreement or in the Plan shall
      confer upon the Optionee 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 the
      Optionee) or of the Optionee, which rights are hereby expressly reserved by
      each, to terminate Optionee's Service at any time for any reason whatsoever,
      with or without cause.

     

    Definitions.
      All
      capitalized terms in this Notice shall have the meanings assigned to them in
      this Notice or in the attached Stock Option Agreement. 

    
      	 
	
              If
                the spousal consent below is not signed, the Optionee represents
                and
                warrants that he or she is not
                married.

            

    

     

    
      	Dated:
              December 27, 2005	 
	 	 
	POSITRON
              CORPORATION,	 
	a
              Texas corporation	 
	 	 
	 	 
	
              By: 
                /s/
                Patrick G. Rooney

              
                

              

              Patrick
                G. Rooney

              Chairman
                of the Board

               

               

            	
              /s/
                Joseph G. Oliverio

              
                

              

              Name:
                 
                Joseph G. Oliverio

              Address:_____________________________

                             
                _____________________________

                             
                _____________________________

            
	 
	 
	
              By
                his or her signature below, the spouse of the Optionee acknowledges
                that
                he or she has read the Stock Option Agreement and the Plan and is
                familiar
                with the terms and provisions thereof, and agrees to be bound by
                all the
                terms and conditions of said Agreement and said
                Plan.

            

    

     

    
      	    
	 	     

	
              Spouse

            	 	
              Date

            

    

     

    ATTACHMENTS

     

    EXHIBIT
      A
      - STOCK OPTION AGREEMENT

    EXHIBIT
      B
      - PLAN SUMMARY AND PROSPECTUS

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