Document:

Exhibit 10.3

Exhibit 10.3

iCAD, INC.

NON-QUALIFIED STOCK OPTION AGREEMENT

AGREEMENT, entered into on April 26, 2011 (the “Date of Grant”), by and between
iCAD, Inc. (the “Company”) and Kevin C. Burns (“Optionee”).

WHEREAS, the Company and Optionee are entering into an employment agreement (the
“Employment Agreement”) on the date hereof;

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”);

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

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 500,000 shares of its Common Stock (the “Shares”),
on the terms and conditions and subject to all the limitations set forth herein.

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 $1.12.

3. WHEN OPTIONS ARE EXERCISABLE

The Option shall become exercisable as to one third or 166,667 shares commencing
twelve months from the Date of Grant, one third or 166,667 shares commencing twenty
four months from the Date of Grant and one third or 166,666 shares commencing thirty
six months from the Date of Grant. The option expires at midnight (Nashua, New
Hampshire USA time) ten 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 (as
defined below), Death or Disability (as defined below) or for Cause (as defined in the
Employment Agreement), 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. The term “Early
Retirement” means retirement with the approval of the Company’s Board of Directors or
Compensation Committee from active employment with the Company prior to age 65.

 

 

 

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 (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 Internal Revenue Code of 1986, as amended (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.

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 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.

 

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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 the Committee 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. “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. “Fair Market Value” shall mean, as of
any given date: (i) if the principal market for the Stock is a national securities
exchange or the Over The Counter Bulletin Board, the closing sale price of the
Stock on such day as reported by such exchange or market system or quotation
medium. Or on a consolidated tape reflecting transactions on such exchange or market
system or quotation medium, or (ii) if the principal market for the Stock is not a
national securities exchange and the Stock is not quoted on the over The Counter
Bulletin Board, the mean between the closing bid sale price for the Stock on such day
as reported by the National Quotation Bureau, Inc.; provided that if clauses (i) and
(ii) of this paragraph are both inapplicable, or if no trades have been made or no
quotes are available for such day, the Fair Market Value of the Stock shall be
determined by the Board of Directors of the Company or the Committee, as the case may
be, which determination shall be conclusive as to the Fair Market Value of the Stock.

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 Board or
Committee, as the case may be; (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 Board
of Directors or the Committee 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.

 

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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
Board of Directors or the Committee (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.

 

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13. GOVERNING LAW

This Agreement and all rights and obligations in it shall be construed in
accordance with, 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, other than Section
5.4.4(ii) of the Employment 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. SEVERABILITY

This Agreement may only be amended by written agreement signed by both parties.

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

	 	 	 	 	 	 	 	 	 
	 	 	ICAD, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BY:	 	/s/ Kenneth Ferry	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Kenneth Ferry	 	 
	 

	 	 	 	ITS:
	 	President and Chief Executive Officer	 	 

	 	 	 	 	 	 	 	 	 
	 	 	OPTIONEE:	 	/s/ Kevin C. Burns	 	 
	 	 	 	 	 	 	 
	 

	 	 	 	Name Printed:
	 	Kevin C. Burns	 	 

 

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iCAD Inc.

INCENTIVE STOCK OPTION AGREEMENT

EXHIBIT 1

NAME OF OPTIONEE: Kevin C. Burns

DATE OF GRANT: April 26, 2011

NUMBER OF OPTION SHARES ISSUABLE UPON FULL OPTION EXERCISE: 500,000

EXERCISE
PRICE: $1.12

EXERCISE SCHEDULE

	 	 	 	 	 
	 	 	Number of Shares with respect to which Option	 
	Initial Date of Exercisability	 	Is initially exercisable	 
	 
	 	 	 	 
	April 26, 2012
	 	 	166,667	 
	 
	 	 	 	 
	April 26, 2013
	 	 	166,667	 
	 
	 	 	 	 
	April 26, 2014
	 	 	166,666	 

 

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(SUNAMERICA(R) LOGO)   Mailing Address:            Overnight Address:
                       Annuity Service Center      Annuity Service Center
                       P.O. Box 54299              21650 Oxnard Street
www.sunamerica.com     Los Angeles, CA 90054-0299  Woodland Hills, CA 91367-4901
(800) 445-7862

EXTENDED LEGACY PROGRAM GUIDE

WHAT IS THE EXTENDED LEGACY PROGRAM?

The Extended Legacy Program is a death claim settlement program that provides
claimants of SunAmerica variable annuities the opportunity to defer the
distribution of claim proceeds while retaining full discretionary access to
them.

EXTENDED LEGACY PROGRAM

There are two options for this program.

OPTION 1 This option enables the claimant to defer taking a full distribution
until December 31st of the year containing the fifth anniversary of the
deceased's death. Any amounts remaining in the account as of that date will
automatically be distributed to the claimant. The claimant may take
discretionary distributions of up to 100% of the current value of the death
claim proceeds at any time during the five year period.

OPTION 2 This option enables the claimant to receive annual required minimum
distributions, generally over the claimant's life expectancy, beginning no later
than December 31st of the year following the year of the deceased's death. The
claimant may take discretionary distributions of up to 100% of the current value
of the death claim proceeds at any time.

Both options have tax implications that should be considered before making a
decision. We recommend that you discuss your situation with a tax professional.

PROGRAM AVAILABILITY

The Extended Legacy Program is available to claimants of products listed on page
2. One or both options referenced above may not be available to certain
claimants. Please review the Variable Annuity Death Claim form (SA2200POS,
F2200POS in NY) for additional information. Contact our Annuity Service Center
at (800) 445-7862 for information regarding availability.

HOW DO I USE THIS GUIDE?

If you elect the Extended Legacy Program, the applicable fees, features and
investment options available to you may differ from the fees, features and
investment options available to the original deceased Owner.

To review the APPLICABLE FEES, FEATURES AND INVESTMENT OPTIONS available to you:

     1.   IDENTIFY THE PRODUCT TO WHICH YOU ARE A CLAIMANT. The product name can
          be found in the upper-right corner of the deceased's last quarterly
          statement. If this same product name is in the list of products on
          page 2 of this guide, you are eligible for the Extended Legacy
          Program. If this product name is not in this list, this program is not
          available to you. Contact our Annuity Service Center if you need
          assistance.

     2.   REVIEW THE VARIABLE PORTFOLIO INVESTMENT OPTIONS AVAILABLE TO YOU.
          Refer to the product prospectus you received with this Guide that
          lists the investment options available to you. Additional information
          regarding the investment options can be found in the fund prospectus
          available at www.sunamerica.com or through our Annuity Service Center.
          You will be mailed a copy of the fund prospectus for the available
          investment options if you elect the Extended Legacy Program.

     3.   WRITE YOUR INVESTMENT ALLOCATION INSTRUCTIONS ON THE DEATH CLAIM FORM.
          Indicate your investment allocation instructions on page 10, Section
          I, of the Variable Annuity Death Claim form.

     4.   REVIEW THE PRODUCT PROSPECTUS DISCLOSURE. The product prospectus you
          received with this Guide includes important information about the
          administrative features available to you. Please review the sections
          of the prospectus related to Investment Options, Transfers, Dollar
          Cost Averaging, Systematic Withdrawal, Automatic Asset Rebalancing
          Program, Extended Legacy Program, Separate Account Expenses, Taxes and
          Other Information.

Variable annuities issued by SunAmerica Annuity and Life Assurance Company or,
in New York, by First SunAmerica Life Insurance Company, New York, NY.

<PAGE>

EXTENDED LEGACY PROGRAM GUIDE                              EXTLEGGEN Page 2 of 2

FEES ASSOCIATED WITH THE EXTENDED LEGACY PROGRAM

<TABLE>
<CAPTION>
                                                                                          SEPARATE     CONTRACT
                                                                                          ACCOUNT    MAINTENANCE
PRODUCT ISSUED TO DECEASED                                                               CHARGE(1)      FEE(2)
--------------------------                                                               ---------   -----------
<S>                                                                                      <C>         <C>
For all of the following products listed below, refer to the product prospectus sent
to you with this Guide for a list of available investment options.

American Pathway       Polaris Choice NY              Seasons
Polaris                Polaris Choice II              Seasons Advantage
Polaris NY             Polaris Choice III             Seasons Advisor
Polaris Rewards NY     Polaris Choice III NY          Seasons Advisor II
Polaris II             Polaris Platinum               Seasons Advisor III
Polaris II NY          Polaris Platinum Rewards       Seasons Elite
Polaris II Rewards     Polaris Platinum II            Seasons Preferred Solution           1.15%           $35
Polaris II Rewards NY  Polaris Platinum II Rewards    Seasons Select
Polaris Advantage      Polaris Platinum III           Seasons Select II
Polaris Advantage NY   Polaris Platinum III NY        Seasons Select II Rewards
Polaris Advisor        Polaris Preferred Solution     Seasons Triple Elite
Polaris Advisor III    Polaris Preferred Solution NY  WM Diversified Strategies
Polaris America        Polaris Protector              WM Diversified Strategies III
Polaris Choice         Polaris Protector Rewards      WM Diversified Strategies III NY
                                                      FSA Advisor
</TABLE>

(1)  The Separate Account Charge is deducted from the average daily ending net
     asset value allocated to the Variable Portfolios. For more information,
     please see the product prospectus.

(2)  A $30 contract maintenance fee applies to certain contracts originally
     issued in New Mexico, New York and/or North Dakota. The contract
     maintenance fee will be waived if your account value exceeds $50,000 on
     each anniversary following your election of the Extended Legacy program.

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