UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-K/A
(Amendment
No. 1)
(Mark
One)
(X) |
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
For
the
fiscal year ended December
31, 2006
OR
(
) |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
|
For
the
transition period from __________ to
__________
Commission
file number 1-9341
iCAD,
Inc.
(Exact
name of registrant as specified in its charter)
Delaware
|
|
02-0377419
|
(State
or other
jurisdiction
|
|
(I.R.S.
Employer Identification
No.)
|
of
incorporation or
organization)
|
|
|
|
|
|
98
Spit Brook Road, Suite 100, Nashua, New
Hampshire
|
|
03062
|
(Address
of principal executive
offices)
|
|
(Zip
Code)
|
Registrant's
telephone number, including area code: (603)
882-5200
Securities
registered pursuant to Section 12(b) of the Act:
Title
of Class
|
|
Name
of each exchange on which
registered
|
Common
Stock, $.01 par
value
|
|
The
Nasdaq Stock Market
LLC
|
Securities
registered pursuant to Section 12 (g) of the Act:
None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined
in
Rule 405 of the Securities Act. Yes o No x
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes o No x
Indicate
by check mark whether the registrant (1) has filed all reports required to
be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirement
for
the past 90 days. Yes x No
o
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this
Form 10-K. o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.
Large Accelerated filer o |
Accelerated
filer o
|
Non-accelerated
filer x
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act.) Yes o No x
The
aggregate market value of the voting stock held by non-affiliates of the
registrant, based upon the closing price for the registrant's Common Stock
on
June 30, 2006 was
$47,369,481.
As
of
April 25, 2007, the registrant had 38,026,591 shares of Common Stock
outstanding.
Documents
Incorporated by Reference: None
EXPLANATORY
NOTE
This
Amendment No. 1 on Form 10-K/A (the “Amendment”) amends the Annual Report
on Form 10-K of iCAD, Inc. for the fiscal year ended December 31, 2006,
originally filed with the Securities and Exchange Commission on March 22,
2007 (the “Original Filing”). We are filing this Amendment to amend
Part III of the Original Filing to include the information required by and
not included in Part III of the Original Filing because we no longer intend
to
file our definitive proxy statement within 120 days of the end of our fiscal
year ended December 31, 2006 and the cover page of the Amendment reflects
this fact. In connection with the filing of this Amendment and pursuant to
the
rules of the Securities and Exchange Commission, we are including with this
Amendment certain new certifications by our principal executive officer and
principal financial officer. Accordingly, Item 15 of Part IV has also been
amended to reflect the filing of these new certifications.
Except
as
described above, no other changes have been made to the Original Filing. The
Original Filing continues to speak as of the date of the Original Filing, and
we
have not updated the disclosures contained therein to reflect any events which
occurred at a date subsequent to the filing of the Original Filing other than
as
expressly indicated in this Amendment. In this Amendment, unless the context
indicates otherwise, the terms “Company,” “we,” “us,” and “our” refer to iCAD,
Inc. and its subsidiaries. Other defined terms used in this Amendment but not
defined herein shall have the meaning specified for such terms in the Original
Filing.
PART
III
Item
10. Directors,
Executive Officers and Corporate Governance.
The
following is information with respect to our executive officers and
directors.
Name
|
|
|
Age
|
|
|
Position
with iCAD
|
|
|
Since
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert
Howard #
|
|
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83
|
|
|
Chairman
of the Board, and Director
|
|
|
1984
|
|
Kenneth
Ferry+
|
|
|
53
|
|
|
President,
Chief Executive Officer, and
Director
|
|
|
2006 |
|
Darlene
Deptula-Hicks
|
|
|
49
|
|
|
Executive
Vice President of Finance, Chief
Financial Officer and Treasurer
|
|
|
2006 |
|
Jeffrey
Barnes
|
|
|
44
|
|
|
Senior
Vice President of Sales
|
|
|
2006
|
|
Stacey
Stevens
|
|
|
38
|
|
|
Senior
Vice President of Marketing and Strategy
|
|
|
2006 |
|
Jonathan
Go
|
|
|
44
|
|
|
Senior
Vice President of Research
and Development
|
|
|
2006 |
|
Rachel
Brem#
|
|
|
48
|
|
|
Director
|
|
|
2004
|
|
George
Farley+
|
|
|
68
|
|
|
|
|
|
2004 |
|
James
Harlan*
|
|
|
55
|
|
|
Director
|
|
|
2000
|
|
Lawrence
Howard#
|
|
|
54
|
|
|
Director
|
|
|
2006
|
|
Steven
Rappaport +
|
|
|
58
|
|
|
Director
|
|
|
2006
|
|
Maha
Sallam*
|
|
|
40
|
|
|
Director
|
|
|
2002
|
|
Elliot
Sussman*
|
|
|
55
|
|
|
Director
|
|
|
2002
|
|
+
Class I Director, current term expires in 2009
*
Class II Director, current term expires in 2007
#
Class III Director, current term expires in 2008
The
Company’s Certificate of Incorporation provides that the Company’s Board of
Directors is divided into three classes (Class I, Class II and Class III).
At each Annual Meeting of stockholders, directors constituting one class are
elected for a three-year term.
Robert
Howard, the
founder and Chairman of the Board of Directors of the Company, a non-executive
position, is the co-founder and has served since March 2007 as the Chairman
of
the Board and Chief Executive Officer of America Hears, Inc., a manufacturer
and
distributor of digital hearings aids. Mr. Howard was Chief Executive Officer
of
the Company from its establishment in 1984 until December of 1993. He was the
founder, and from 1969 to April 1980 he served as President and Chairman of
the
Board, of Centronics Data Computer Corp. ("Centronics"), a manufacturer of
a
variety of computer printers, including the first impact dot matrix printer,
which was invented by Mr. Howard. He resigned from Centronics’ board of
directors in 1983. From April 1980 until 1983, Mr. Howard was principally
engaged in the management of his investments. Commencing in mid-1982, Mr.
Howard, doing business as R.H. Research, developed the ink jet technology upon
which the Company was initially based and he contributed this technology,
without compensation, to the Company.
Mr.
Howard was Chairman of the Board of Presstek, Inc. (“Presstek”), a public
company which has developed proprietary imaging and consumables technologies
for
the printing and graphic arts industries, from July 1988 to September 1998
and
served as Chairman Emeritus of the Board of Presstek from September 1998 to
December 2000. Mr.
Howard was Chairman of the Board of Ionatron, Inc. (“Ionatron”), a public
company involved in the development and marketing of directed energy weapon
technology and products that include direct energy weapons for defense and
security customers primarily in the U.S. Government, from
its
inception in 2002 until he resigned as its Chairman and a director in March
2006.
Mr.
Howard is the father of Lawrence Howard, a member of the Company’s
Board.
Kenneth
Ferry has
served as a Director and the Company’s President and Chief Executive Officer
since May 2006. He has over 25 years of experience in the healthcare technology
field, with more than 10 years experience in senior management positions. Prior
to joining the Company, from October 2003 to May 2006, Mr. Ferry was Senior
Vice
President and General Manager for the Global Patient Monitoring business for
Philips Medical Systems, the market leader in a $2.5 billion industry. In this
role he was responsible for Research & Development, Marketing, Business
Development, Supply Chain and Manufacturing, Quality and Regulatory, Finance
and
Human Resources. From August 2001 to October 2003, Mr. Ferry served as Senior
Vice President for Philips Medical Systems Division. From 1983 to 2001, Mr.
Ferry served in a number of management positions with Hewlett Packard and
Agilent Technologies, Inc.
Darlene
Deptula-Hicks
has
served as the Company’s Executive Vice President of Finance and Chief Financial
Officer and Treasurer since September 2006. She has more than 25 years
experience in financial management within the medical device and high technology
industries. Prior to joining the Company, from January 2002 to February 2006,
Ms. Deptula-Hicks served as Executive Vice President and Chief Financial Officer
and Treasurer of ONI Medical Systems, Inc., a venture capital-backed designer
and manufacturer of high-field diagnostic imaging systems. From 1998 to 2001,
Ms. Deptula-Hicks was Executive Vice President and Chief Financial Officer
and
Treasurer of Implant Sciences Corporation, an early stage medical device company
that had its initial public offering in June of 1999. Ms. Deptula-Hicks led
the
pre-IPO and post-IPO activities for the company. Ms. Deptula-Hicks has also
held
various senior financial and accounting positions at Abiomed, Incorporated;
GCA
Corporation; Edwards High Vacuum International and Puritan Bennett Corporation.
Ms. Deptula-Hicks also currently serves on the Board of Directors and as Chair
of the Audit Committees of Technest Holding, Inc., a public defense and homeland
security company and IMCOR Pharmaceutical Company, a public biotech company.
Jeffrey
Barnes
has
served as the Company’s Senior Vice President of Sales since May 2006. For the
17 years prior to joining the Company Mr. Barnes served in a variety of sales
and marketing management positions with Philips Medical Systems, Agilent
Technologies, Inc. and Hewlett Packard Healthcare Solutions Group (which was
acquired in 2001 by Philips Medical Systems). From November 2002 to April 2006
he was Vice President Sales and National Sales Manager for Cardiac Resuscitation
Solutions at Philips Medical Systems, where he worked closely with iCAD’s Chief
Executive Officer, Kenneth Ferry. Mr. Barnes was responsible for sales and
service operations at Philips’ market-leading defibrillation field organization.
From May 2000 to November 2002, Mr. Barnes served as Vice President of
Marketing, Americas, for the Cardiac and Monitoring Systems unit of
Hewlett-Packard /Agilent and Philips Medical Systems. He was responsible for
all
marketing activities and certain direct sales activities for the North and
South
American field operation.
Stacey
Stevens
has
served as the Company’s Senior Vice President of Marketing and Strategy since
June 2006. During the past 16 years, Ms. Stevens has served in a variety of
sales, business development, and marketing management positions with Philips
Medical Systems, Agilent Technologies, Inc. and Hewlett Packard's
Healthcare Solutions Group (which was acquired in 2001 by Philips Medical
Systems). From February 2005 until joining the Company she was Vice President,
Marketing Planning at Philips Medical Systems, where she was responsible for
the
leadership of all global marketing planning functions for Philips' Healthcare
Business. From 2003 to January 2005, she was Vice President of Marketing for
the
Cardiac and Monitoring Systems Business Unit of Philips where she was
responsible for all marketing and certain direct sales activities for the
America's Field Operation. Prior to that, Ms. Stevens held several key marketing
management positions in the Ultrasound Business Unit of Hewlett-Packard/Agilent
and Philips Medical Systems.
Jonathan
Go has
served as the Company’s Senior Vice President of Research and Development since
October 2006. Mr. Go brings more than twenty years of software development
experience in the medical industry to his position with the Company. From
February 1998 to May 2006, Mr. Go served as Vice President of Engineering at
Merge eMed, a provider of RIS/PACS solutions for imaging centers, specialty
practices and hospitals. At Merge eMed, Mr. Go was responsible for software
development, product management, testing, system integration and technical
support for all of eMed's products. From July 1986 to January 1998, Mr. Go
held
various development roles at Cedara Software in Toronto culminating as Director
of Engineering. Cedara Software is focused on the development of custom
engineered software applications and development tools for the medical imaging
OEMs. At Cedara Mr. Go built the workstation program, developing multiple
specialty workstations that have been adopted by a large number of OEM
partners.
Dr.
Rachel Brem
is
currently the Director of Breast Imaging and Intervention, Professor of
Radiology and the Vice-Chairman in the Department of Radiology at The George
Washington University Medical Center, positions she has held since 2000. From
1991 to 1999 Dr. Brem was previously the Director of Breast Imaging at the
John
Hopkins Medical Institution. Dr. Brem’s research includes Minimally Invasive
Breast Biopsy, New Technologies for the Earlier Diagnosis of breast cancer
including Computer Aided Detection, as well as Nuclear Medicine Imaging of
the
Breast and Electrical Impedance Imaging of the Breast.
George
Farley, a
Certified Public Accountant, is currently a financial consultant, a position
he
has held since August 1999. From November 1997 to August 1999 Mr. Farley served
as Chief Financial Officer and Director for Talk America, Inc (formerly
Talk.com, Inc.), a communications services provider. He previously held the
position as National Director, Managing Partner of BDO Seidman, LLP, where
he
specialized in Capital Formation and Mergers and Acquisitions. In addition
to
his service as director at Talk America, he has held directorships at Preserver
Insurance Company, Inc., and Acorn Holding Corp., and is
currently a director of Ionatron.
James
Harlan was
the
founder and has been the Executive Vice President and Chief Financial Officer
of
HNG Storage Company, a natural gas storage, development and operations company
since 1998. From 1991 to 1997 Mr. Harlan served as General Manager and Chief
Financial Officer of Pacific Resources Group where he was responsible for the
planning and financial development of various manufacturing and distribution
businesses in Asia. He also served as operations research and planning analyst
for the White House Office of Energy Policy and Planning from 1977 to 1978,
the
Department of Energy from 1978 to 1981, and U.S. Synthetic Fuels Corporation
from 1981 to 1984. Mr. Harlan is also a director of Ionatron.
Dr.
Lawrence Howard
has been
since March 1997 a general partner of Hudson Ventures, L.P. (formerly known
as
Hudson Partners, L.P.), a limited partnership that is the general partner of
Hudson Venture Partners, L.P. (“HVP”), a limited partnership that is qualified
as a small business investment company. Since March 1997, Dr. Howard has
also been a managing member of Hudson Management Associates LLC, a limited
liability company that provides management services to HVP. Since November
2000,
Dr. Howard has been a General Partner of Hudson Venture Partners II,
and a limited partner of Hudson Venture II, L.P. He was a founder and has
been since November 1987, and continues to be, a director of Presstek and served
in various officer positions at Presstek from October 1987 to June 1993, lastly
as its Chief Executive Officer. Dr. Howard is the son of Robert Howard, the
Chairman of the Company’s Board of Directors.
Steven
Rappaport
has been
a partner of RZ Capital, LLC since July 2002, a private investment firm that
also provides administrative services for a limited number of clients. From
March 1995 to July 2002, Mr. Rappaport was Director, President and
Principal of Loanet, Inc., an online real-time accounting service used by
brokers and institutions to support domestic and international securities
borrowing and lending activities. Loanet, Inc. was acquired by SunGard Data
Systems in May 2001. From March 1992 to December 1994, Mr. Rappaport was
Executive Vice President of Metallurg, Inc. (“Metallurg”) and President of
Metallurg’s subsidiary, Shieldalloy Corporation. He served as Director of
Metallurg from 1985 to 1998. From March 1987 to March 1992, Mr. Rappaport
was Director, Executive Vice President and Secretary of Telerate,
Inc.(“Telerate”), an electronic distributor of financial information. Telerate
was acquired by Dow Jones over a number of years commencing in 1985 and
culminating in January 1990, when it became a wholly-owned subsidiary.
Mr. Rappaport practiced corporate and tax law at the New York law firm of
Hartman & Craven from August 1974 to March 1987. He became a partner in
the firm in 1979. Mr. Rappaport is currently serving as an independent director
of Presstek and a number of open and closed end American Stock Exchange funds
of
which Credit Suisse serves as the investment adviser.
Maha
Sallam, PhD
has been
a Vice President of the Company since July 2002. From 1997 until the Company’s
acquisition of Intelligent Systems Software, Inc. (“ISSI”) in July 2002, Ms.
Sallam served as President, and then Director and Vice President of Regulatory
Affairs and Clinical Testing at ISSI. She was one of ISSI’s founders and has
over fourteen years of experience in the medical industry. Ms. Sallam has a
strong background in image analysis research including a doctoral dissertation,
conference presentations and several publications.
Dr.
Elliot Sussman
is
currently President and Chief Executive Officer of Lehigh Valley Hospital and
Health Network, a position he has held since 1993. Dr. Sussman is the Leonard
Parker Pool Professor of Health Systems Management, Professor of Medicine,
and
Professor of Health Evaluation Sciences at Pennsylvania State University’s
College of Medicine. Dr. Sussman served as a Fellow in General Medicine and
a
Robert Wood Johnson Clinical Scholar at the University of Pennsylvania, and
trained as a resident at the Hospital of the University of Pennsylvania. Dr.
Sussman is a director and the Chairperson of the compensation committee of
the
Board of Directors of Universal Health Realty Income Trust, a public company
involved in real estate investment trust primarily engaged in investing in
healthcare and human service-related facilities. Dr. Sussman is also a director
of the Board of Directors of VIASYS Healthcare, Inc., a healthcare technology
company.
Audit
Committee and Audit Committee Financial Expert
Our
Board
of Directors maintains an Audit Committee which is comprised of Mr. Rappaport
(Chair), Mr. Harlan and Dr. Sussman. Our Board has determined that each member
of the Audit Committee meets the definition of an “Independent Director” under
applicable NASDAQ Marketplace Rules. In addition, the Board has determined
that
each member of the Audit Committee meets the independence requirements of
applicable Securities and Exchange Commission (“SEC”) rules and that Mr.
Rappaport qualifies as an audit committee financial expert under applicable
SEC
rules.
Section
16(a) Beneficial Ownership Reporting Compliance
Section
16(a) of the Securities Exchange Act of 1934 (“Exchange Act”) requires our
officers and directors, and persons who own more than 10 percent of a registered
class of our company's equity securities, to file reports of ownership and
changes in ownership with the SEC. Officers, directors, and greater than 10
percent stockholders are required by SEC regulation to furnish the us with
copies of all Section 16(a) forms they file.
Based
solely on our review of copies of such forms received by us, we believe that
during the year ended December 31, 2006, all filing requirements applicable
to
all of our officers, directors, and greater than 10% beneficial stockholders
were timely complied with, except
for Robert Howard, Dr. Elliot Sussman and Dr. Herschel Sklaroff (a former
director) who filed late Forms 4 with respect to a stock option grant made
to
each of them on November 14, 2006.
Code
of Ethics
We
have
developed and adopted a comprehensive Code of Business Conduct and Ethics to
cover all of our employees. Copies of the Code of Business Conduct and Ethics
can be obtained, without charge, upon written request, addressed
to:
iCAD,
Inc.
98
Spit
Brook Road, Suite 100
Nashua,
NH 03062
Attention:
Assistant Corporate Secretary
Item
11. Executive
Compensation.
EXECUTIVE
COMPENSATION
The
following discussion covers the compensation arrangements of our current
principal executive officer, our current principal financial officer and our
current three other executive officers (the “Named Executive Officers’) and our
directors and includes a general discussion and analysis of our compensation
program for our executive officers as well as a series of tables containing
specific compensation information for our Named Executive Officers and directors
as well as certain former executive officers. This discussion contains forward
looking statements that are based upon our current executive compensation
program, policies and methodologies. We may make changes in this program and
these policies and methodologies in the future, and if made, we could have
materially different compensation arrangements in the future
Compensation
Discussion and Analysis
This
Compensation Discussion and Analysis is intended to provide information about
our compensation objectives, policies and practices for our Named Executive
Officers. The Compensation Committee of our Board of Directors oversees and
approves all compensation decisions relating to our Named Executive
Officers.
While
our
compensation program includes short-term elements, such as annual base salary,
and generally annual incentive cash bonuses, a significant aspect of our
compensation program includes longer term elements such as equity-based
incentive awards through grants of stock options or other stock-based
awards.
We
believe that our compensation program provides an overall level of compensation
that is competitive to that offered in our industry and with executives in
other
companies of similar size within the healthcare industry.
The
Compensation Committee intends to continue its strategy of compensating
executives through programs that are linked to our achievement of our business
goals and objectives, including certain financial goals, such as revenue and
pre-tax profitability, and individual executives are further rewarded for
exceeding those goals. The Compensation Committee believes that the total
compensation of executive officers should reflect their leadership abilities,
initiative, the scope of their responsibilities and our success and the past
and
expected future contribution of each executive to that success. The Committee
seeks to foster a performance-oriented environment by tying certain compensation
components to the achievement of performance targets that are important to
us
and to our efforts to increase stockholder value. We believe that our
compensation program contributes to our employees’
and
Named Executive Officers’ incentive to execute on our goals.
Objectives
of our Executive Compensation Program
The
Compensation Committee strives to ensure that our executive compensation
programs will enable us to attract and retain superior executive talent and
motivate our executives to execute our business strategy and to assist us in
achieving our short-term and long-term growth and earnings goals. The primary
objectives of our executive compensation program are to:
|
·
|
attract,
retain and fairly compensate highly talented and experienced executives
in
the healthcare industry for us to achieve and expand our business
goals
and objectives;
|
|
·
|
ensure
executive compensation is aligned with specific performance
objectives;
|
|
·
|
promote
the achievement of strategic and financial performance measures by
tying
cash and equity incentives to the achievement of measurable corporate
and
individual performance goals; and
|
|
·
|
align
executives’ incentives with the creation of stockholder
value.
|
The
Compensation Committee and the Board of Directors evaluate the performance
of
our president/chief executive officer and rely on input from our president/chief
executive officer as it relates to other senior management executives. Our
goal
is to compensate at levels we believe are competitive with executives in other
companies of similar size within the healthcare industry.
Although
the Compensation Committee did not retain a compensation consultant for 2006
it
did utilize the services of Diversified Search, Inc., (“Diversified”) an
executive search firm for the recruitment of our president and chief executive
officer and our executive vice president and chief financial officer and senior
vice president of research and development. In connection with these recruitment
efforts, Diversified provided the Compensation Committee with compensation
comparables for all of our executive positions. In January 2007 the Compensation
Committee retained the consulting firm Pearl Meyer and Partners (“Pearl Meyer”)
as its independent compensation consultant to review our executive compensation
programs and to advise it on matters relating to chief executive officer and
other executive officer compensation.
Forms
of Compensation Paid to Executive Officers During
2006
During
the fiscal year ending December 31, 2006 we hired an entire new executive
management team and we provided these executive officers with the following
forms of compensation:
|
·
|
Annual
Incentive Bonus Compensation
|
|
·
|
Severance
and Change of Control Benefits; and
|
|
·
|
Retirement
and other Employee Benefits.
|
Base
Salary
Base
salary represents amounts paid during the fiscal year to Named Executive
Officers as direct guaranteed compensation under their employment agreements
for
their services to us. Base salaries are an important element of compensation
and
are used to provide a fixed amount of compensation for the executive’s regular
work. The base salaries of executive officers are reviewed on an annual basis,
as well as at the time of a promotion or other change in responsibilities.
Increases in salary are based on an evaluation of the individual’s performance
and level of pay compared to comparable companies pay levels for similar
positions.
The
effective date of merit increases typically is June 1st of each year. Increases
in base salaries are based upon individual performance. Base salary increases
can also occur upon promotion.
The
base
salary of each of our Named Executive Officers is fixed pursuant to the terms
of
their respective employment agreements with us and, when a contract is up for,
or otherwise considered for, renewal, may be increased upon a review of the
executive’s abilities, experience and performance, as well as a review of
salaries for executives for comparable positions at corporations which either
compete with us in its business or of comparable size and scope of operations.
The recommendations to the Board of Directors by the Compensation Committee
with
respect to base salary are based primarily on informal judgments reasonably
believed to be in our best interests. Base salaries are used to reward
individual performance of each Named Executive Officer on a day-to-day basis
during the year, and to encourage them to perform at their highest levels.
We
also use our base salary as an incentive to attract top quality executives
and
other management employees from other companies. Moreover, base salary (and
increases to base salary) are intended to recognize the overall experience,
position within our company and expected contributions of each Named Executive
Officer to us and our goals.
Employment
Contracts
Between
May 2006 and October 2006 we hired and entered into employment contracts with
our five current Named Executive Officers. We did not have employment agreements
with any other executive officer during 2006. In
determining base salary the Compensation Committee, utilizing information
obtained from Diversified and elsewhere, utilized a number of criteria,
including executives’ qualifications, experience, responsibility and comparison
to other companies of similar size in the healthcare industry. The material
provisions of these contracts are discussed in the narrative following the
Summary Compensation Table.
Auto
Allowance
During
2006 and as part of their employment agreements, we agreed to pay to our Named
Executive Officers an executive automobile allowance in the amount of $1,500
per
month for Mr. Ferry and $1,000 per month for each of Ms. Deptula-Hicks, Mr.
Barnes, Ms. Stevens and Mr. Go. The executives are responsible for paying all
the expenses of maintaining, insuring and operating their automobiles. The
purpose of providing the allowance is to defray the Named Executive Officer’s
cost of owning and operating an automobile often used for business purposes;
while preventing us from having to own and maintain a fleet of automobiles
and
is a taxable benefit for the Named Executive Officer.
Signing
Bonus
During
2006, to help attract a talented and experienced management team we offered
signing bonuses to our Named Executive Officers. We agreed to pay to signing
bonus in the amount of $35,000 to Mr. Ferry, and $20,000 to each of Ms.
Deptula-Hicks, Mr. Barnes, Ms. Stevens and Mr. Go. All signing bonuses were
paid
after commencement of their employment.
Annual
Incentive Bonus Compensation
We
have
an Executive Incentive Bonus Plan for our Named Executive Officers.
Our
Named
Executive Officers each have a contractual right specified in their respective
employment agreements to receive an annual cash bonus, based upon goals and
objectives mutually agreed by the Board of Directors and the executive, with
a
minimum contractual bonus for 2006. The purpose of such cash bonuses is to
provide a direct financial incentive to the Named Executive Officers to achieve
the goals and objectives of our company. In 2006, the following measures were
taken into consideration by the Compensation Committee in evaluating the payment
of cash bonuses:
|
1.
|
The
strong performance of our company in the third and fourth quarters
of 2006
as a direct result of the new management
team;
|
|
2.
|
Positive
changes in revenue and operating income compared to prior first and
second
quarters of 2006;
|
|
3.
|
Individual
performance; and
|
In
January 2007 the Compensation Committee engaged Pearl Meyer, to provide a
competitive assessment of our executive compensation program. They assessed
the competitiveness of our executive compensation program utilizing a peer
group
of nine companies, including AFP Imaging Corporation, Amicas, Inc., Bio Imaging
Technologies, Inc., Clarient, Inc., CSP, Inc., Emageon, Inc., Hologic, Inc.,
Tripath Imaging, Inc., and Vital Images, Inc., supplemented by three published
surveys. As a result of the Pearl Meyer compensation assessment and our
financial results for 2006, the Board of Directors, upon recommendation of
the
Compensation Committee, approved 2006 bonus payments in the amounts of $175,000
for Mr. Ferry, $35,000 for Ms. Deptula-Hicks, $90,000 for Mr. Barnes, $70,000
for Ms. Stevens and $15,000 for Mr. Go. These
bonuses were in lieu of any bonuses for 2006 that the Named Executive Officer’s
would otherwise have been entitled to under their respective employment
agreements. In
addition, the amount of the incentive bonus that Ms. Stevens is eligible to
receive under her employment agreement during the year ending December 31,
2007
was increased to an amount equal to 40% of her annual base salary.
Equity
Incentives
The
Named Executive
Officers’ and our other employees are eligible to receive equity incentive
awards under our equity incentive plans. On occasion, we
grant options outside of a formal stockholder approved plan to new
employees, including new executive officers, as an inducement to their
employment with us. The primary goal of the use of these incentives is to create
long-term value for stockholders by providing the Named Executive Officers
with
an additional incentive to work towards maximizing stockholder value. The
Compensation Committee views equity incentive awards as one of the more
important components of our long-term, performance-based compensation
philosophy. The grant of equity incentive awards to executive officers
encourages equity ownership in iCAD and closely aligns the Named Executive
Officers’ interests to the interests of all the stockholders.
Equity
awards may take the form of stock options, restricted stock, unrestricted stock,
stock units including restricted stock units, performance awards and other
stock-based awards. The mix of cash and equity-based awards, as well as the
types of equity-based awards, granted to our Named Executive Officers may vary
in the future from year to year. Consideration may be given to various factors,
such as the relative merits of cash and equity as a device for retaining and
motivating the Named Executive Officers, the practices of other companies,
individual performance, an individual’s pay relative to others, contractual
commitments pursuant to employment or other agreements, and the value of
already-outstanding grants of equity in determining the size and type of future
equity-based awards that may be granted in the future to each Named Executive
Officer.
These
awards are generally
provided through initial grants at or near the date of hire and through
subsequent periodic grants. Equity incentive awards granted to the Named
Executive Officers’ and other employees in the form of stock options have
exercise prices not less than the fair market value of the stock on the date
of
the grant or award. Equity incentive awards vest and become exercisable at
such
time as determined by the Compensation Committee or Board of Directors. The
initial grant is designed for the level of the job that the executive holds
and
is designed to motivate the executive to make the kind of decisions and
implement strategies and programs that will contribute to an increase in our
stock price over time. Periodic additional equity incentive awards within the
comparable range for the job are expected to be granted to reflect the
executives’ ongoing contributions to us, to create an incentive to remain in our
employ and to provide a long-term incentive to achieve or exceed the our
financial goals.
Severance
and Change of Control Benefits
We
have
entered into employment agreements with each of the Named Executive Officers.
Each of these agreements provides for certain payments and other benefits if
the
executive’s employment terminates under certain circumstances, including, in the
event of a “change in control”. See “Executive Compensation - Narrative
Disclosure to Summary Compensation Table - Employment Contracts for our Named
Executive Officers” and “Severance and Change of Control Benefits” appearing
after the Outstanding Equity Awards At Fiscal Year-end table for a description
of the severance and change in control benefits.
Retirement
and Other Employee Benefits
We
provide various employee benefit programs to all employees, including medical,
dental, life insurance, short and long term disability and a 401k plan to which
in early 2007 we added an employer matching contribution. Executives are
eligible to participate in all our employee benefit programs, in each case
on
the same basis as other employees. In addition, we paid a $2,140 life insurance
premium on behalf of Mr. Ferry during 2006.
Executive
Compensation Tables
The
following table provides information on the compensation provided during 2006
to
(i) those persons who served in the capacity as our Chief Executive Officer,
(ii) those persons who served in the capacity as our Chief Financial Officer,
and (iii) the three highest paid executive officers other than persons who
served in the capacities as our Chief Executive Officer or Chief Financial
Officer, who served in such capacity during 2006 and at the end of 2006 whose
total compensation exceeded $100,000 (collectively “the Named Persons”).
SUMMARY
COMPENSATION TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary
|
|
Bonus (1)
|
|
Option
Awards (9)
|
|
All
Other Compensation(10)
|
|
Total
|
|
Name
and Principal Position
|
|
Year
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Kenneth
Ferry (4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President,
Chief Executive Officer, Director
|
|
|
2006
|
|
|
190,385
|
|
|
210,000
|
|
|
361,536
|
|
|
13,563
|
|
|
775,484
|
|
W.
Scott Parr (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
President,
Chief Executive Officer, Director
|
|
|
2006
|
|
|
257,885
|
|
|
-
|
|
|
258,000
|
|
|
-
|
|
|
515,885
|
|
Darlene
Deptula-Hicks (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
Vice President of Finance, Chief Financial Officer
|
|
|
2006
|
|
|
58,423
|
|
|
55,000
|
|
|
90,438
|
|
|
3,462
|
|
|
207,323
|
|
Annette
Heroux (3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vice
President of Finance, Chief Financial Officer
|
|
|
2006
|
|
|
154,904
|
|
|
20,000
|
|
|
2,623
|
|
|
-
|
|
|
177,527
|
|
Jeffrey
Barnes (6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior
Vice President of Sales
|
|
|
2006
|
|
|
113,846
|
|
|
110,000
|
|
|
101,682
|
|
|
7,385
|
|
|
332,913
|
|
Stacey
Stevens (7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior
Vice President of Marketing and Strategy
|
|
|
2006
|
|
|
90,462
|
|
|
90,000
|
|
|
83,246
|
|
|
5,379
|
|
|
269,087
|
|
Jonathan
Go (8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior
Vice President of Research and Development
|
|
|
2006
|
|
|
32,019
|
|
|
35,000
|
|
|
63,212
|
|
|
2,077
|
|
|
132,308
|
|
(1) |
The
amounts include (i) signing bonuses paid to the following Named Persons
under the terms of their respective employment agreements -Kenneth
Ferry
($35,000), Darlene Deptula-Hicks ($20,000), Jeffrey Barnes ($20,000),
Stacey Stevens ($20,000) and Jonathan Go ($20,000) and (ii) bonuses
earned
for 2006 and paid in 2007 that were awarded to the following Named
Persons
in lieu of any incentive bonus to which they were otherwise entitled
to
under the terms of their respective employment agreements: Kenneth
Ferry
($175,000); Darlene Deptula-Hicks ($35,000), Jeffrey Barnes ($90,000),
Stacey Stevens ($70,000) and Jonathan Go
($15,000).
|
(2) |
Mr.
Parr resigned from the position of President and Chief Executive
Officer
and employee of our company in May 2006.
|
(3) |
Ms.
Heroux resigned from the position of Vice President of Finance and
Chief
Financial Officer of our company in September 2006 although she continues
to be employed by us as Vice President of Administration.
|
(4) |
Mr.
Ferry joined our company on May 15,
2006.
|
(5) |
Ms.
Deptula-Hicks joined our company on September 11,
2006.
|
(6) |
Mr.
Barnes joined our company on May 15,
2006.
|
(7) |
Ms.
Stevens joined our company on June 1,
2006.
|
(8) |
Mr.
Go joined our company on October 23, 2006.
|
(9) |
The
amounts included in the “Option Awards” column represent the compensation
cost recognized by us in 2006 related to stock option awards granted
in
2006 to our Named Executive Officers or, with respect to Mr. Parr’s
options, cost recognized by us resulting from the modification
of Mr.
Parr’s options pursuant to his separation agreement with us , computed
in
accordance with Statement of Financial Accounting Standards No.
123R. For
a discussion of valuation assumptions, see Note 6(b) to our consolidated
financial statements.
|
(10) |
The
amounts shown in the “All Other Compensation” column for Mr. Ferry
consists of an automobile allowance of $11,423 and $2,140 of life
insurance premiums paid by us. For the other Named Executive Officers
the
amounts represent payments of an automobile
allowance.
|
Narrative
Disclosure to Summary Compensation Table
Employment
Contracts for our Named Executive Officers
During
2006 we negotiated and entered into the following employment agreements with
our
Named Executive Officers and their compensation is determined based upon these
employment agreements. A description of provisions of these agreements providing
for certain post-termination payments upon termination of their employment
are
described following the “Outstanding
Equity Awards At Fiscal Year-End table under the caption “Severance and Change
of Control Benefits- Termination
for Cause, without Cause, or due to a Change in Control”.
The
base
salary agreed to for Mr. Ferry was $300,000, effective his date of hire of
May
8, 2006. While no compensation consultant was utilized in establishing Mr.
Ferry’s base salary and incentive pay, based on input from Diversified and his
past professional experience and credentials we believed that the compensation
package provided to Mr. Ferry was comparable to that of chief executive officers
for companies of similar size in the healthcare sector.
Ms.
Darlene Deptula-Hicks, our Executive Vice President of Finance and Chief
Financial Officer.
We
entered into an employment agreement with Ms. Deptula-Hicks in September 2006
that provides for her employment as our Executive Vice President of Finance
and
Chief Financial Officer for a term commencing on September 11, 2006 and expiring
on December 31, 2008 subject to automatic one year renewals at the end of
the initial term, subject to certain conditions, at an annual base salary of
$205,000. The agreement also provided for Ms. Deptula-Hicks to receive a
signing bonus of $20,000 and for her eligibility to receive during each
employment year during the term of the Agreement an annual incentive bonus
in
each calendar year of up to $82,000 (except for the 2006 fiscal year where
the
incentive bonus would not be less than $27,000) if we achieve goals and
objectives mutually agreed upon by the Board and Ms. Deptula-Hicks. Ms.
Deptula-Hicks is also entitled to customary benefits, including participation
in
employee benefit plans and reasonable travel and entertainment expenses as
well
as a monthly automobile allowance.
The
base
salary agreed to for Ms. Deptula-Hicks was $205,000, effective her date of
hire
of September 11, 2006. While no compensation consultant was utilized in
establishing Ms. Deptula-Hicks’ base salary and incentive pay, based input from
Diversified and on her past professional experience and credentials we believed
that the compensation package provided to Ms. Deptula-Hicks was comparable
to
that of chief financial officers for companies of similar size in the healthcare
sector.
Mr.
Jeffrey Barnes, our Senior Vice President of Sales.
We
entered into an employment agreement with Mr. Barnes in April 2006 that provides
for his employment as our Senior Vice President of Sales for a term commencing
on May 15, 2006 and expiring on December 31, 2008 subject to automatic
one year renewals at the end of the initial term, subject to certain conditions,
at an annual base salary of $185,000. The agreement also provided for
Mr. Barnes to receive a signing bonus of $20,000 and for his eligibility to
receive during each employment year during the term of the Agreement an annual
incentive bonus in each calendar year of up to $74,000 (except for the 2006
fiscal year where the incentive bonus would not be less than $37,000) if we
achieve goals and objectives mutually agreed upon by the Board and Mr. Barnes.
Mr. Barnes is also entitled to customary benefits, including participation
in
employee benefit plans and reasonable travel and entertainment expenses as
well
as a monthly automobile allowance.
The
base
salary agreed to for Mr. Barnes was $185,000, effective his date of hire of
May
15, 2006. While no compensation consultant was utilized in establishing Mr.
Barnes base salary and incentive pay, based on input from Diversified and his
past professional experience and credentials we believed that the compensation
package provided to Mr. Barnes was comparable to that of Senior Vice President
of Sales for companies of similar size in the healthcare sector.
Ms.
Stacey Stevens, our Senior Vice President of Marketing and
Strategy.
We
entered into an employment agreement with Ms. Stevens in May 2006 that provides
for her employment as our Vice President of Marketing and Strategy for a term
commencing on June 1, 2006 and expiring on December 31, 2008 subject to
automatic one year renewals at the end of the initial term, subject to certain
conditions, at an annual base salary of $160,000. The agreement also provided
for Ms. Stevens to receive a signing bonus of $20,000 and for her
eligibility to receive during each employment year during the term of the
Agreement an annual incentive bonus in each calendar year of up to $48,000
(except for the 2006 fiscal year where the incentive bonus would not be less
than $24,000) if we achieve goals and objectives mutually agreed upon by the
Board and Ms. Stevens. Ms. Stevens is also entitled to customary benefits,
including participation in employee benefit plans and reasonable travel and
entertainment expenses as well as a monthly automobile allowance.
The
base
salary agreed to for Ms. Stevens was $160,000, effective her date of hire of
June 1, 2006. While no compensation consultant was utilized in establishing
Ms.
Stevens base salary and incentive pay, based on input from Diversified and
her
past professional experience and credentials we believed that the compensation
package provided to Ms. Stevens was comparable to that of chief marketing
officers for companies of similar size in the healthcare sector.
Mr.
Jonathan Go, our Senior Vice President of Research and
Development.
We
entered into an employment agreement with Mr. Go in October 2006 that provides
for his employment as our Senior Vice President of Research and Development
for
a term commencing on October 23, 2006 and expiring on December 31, 2008
subject to automatic one year renewals at the end of the initial term, subject
to certain conditions, at an annual base salary of $185,000. The agreement
also
provided for Mr. Go to receive a signing bonus of $20,000 and for his
eligibility to receive during each employment year during the term of the
Agreement an annual incentive bonus in each calendar year of up to $74,000
(except for the 2006 fiscal year where the incentive bonus would be determined
on a pro rata basis by the Company’s Board of Directors) if we achieve
goals and objectives mutually agreed upon by the Board and Mr. Go. Mr. Go is
also entitled to customary benefits, including participation in employee benefit
plans and reasonable travel and entertainment expenses as well as a monthly
automobile allowance.
The
base
salary agreed to for Mr. Go was $185,000, effective his date of hire of October
23, 2006. While no compensation consultant was utilized in establishing Mr.
Go’s
base salary and incentive pay, based on input from Diversified and his past
professional experience and credentials we believed that the compensation
package provided to Mr. Go was comparable to that of Senior VP’s of Research and
Development for companies of similar size in the healthcare sector.
GRANTS
OF PLAN-BASED AWARDS
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Grant
Date
|
|
Estimated
Future Payouts Under Non-Equity Incentive Plan Awards Target
(1)
($)
|
|
Estimated
Future Payouts Under Non-Equity Incentive Plan Awards Maximum
(1)
($)
|
|
All
Other Option Awards: Number of Securities Underlying Options
(2)
(#)
|
|
Exercise
or Base Price of Option Awards ($/Sh)
|
|
Kenneth
Ferry
|
|
|
|
|
|
100,000
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
5/15/2006
|
|
|
|
|
|
|
|
|
800,000
|
|
|
1.59
|
|
Darlene
Deptula-Hicks
|
|
|
|
|
|
82,000
|
|
|
82,000
|
|
|
|
|
|
|
|
|
|
|
9/11/2006
|
|
|
|
|
|
|
|
|
275,000
|
|
|
1.80
|
|
Jeffrey
Barnes
|
|
|
|
|
|
74,000
|
|
|
74,000
|
|
|
|
|
|
|
|
|
|
|
5/15/2006
|
|
|
|
|
|
|
|
|
225,000
|
|
|
1.59
|
|
Stacey
Stevens
|
|
|
|
|
|
64,000
|
|
|
64,000
|
|
|
|
|
|
|
|
|
|
|
6/1/2006
|
|
|
|
|
|
|
|
|
150,000
|
|
|
1.98
|
|
Jonathan
Go
|
|
|
|
|
|
74,000
|
|
|
74,000
|
|
|
|
|
|
|
|
|
|
|
11/3/2006
|
|
|
|
|
|
|
|
|
200,000
|
|
|
2.27
|
|
(1) |
The
Estimated Future Payouts under Non-Equity Incentive Plan Awards column
represents the eligibility of the Named Executive Officers listed
in the
table to receive an annual incentive bonus in each calendar year
pursuant
to their respective employment agreements if we achieve goals and
objectives established by the Board or Compensation Committee. According
to the terms of their employment agreements these Named Executive
Officers
are eligible to receive, for each employment year, during the term
of
their employment agreement the following annual incentive bonus each
calendar year (i) up to $100,000 for Mr. Ferry (which represents
33% of
his base salary at December 31, 2006), (ii) up to $82,000 for Ms.
Deptula-Hicks (which represents 40% of her base salary at December
31,
2006), (iii) up to $74,000 for Mr. Barnes (which represents 40% of
his
base salary at December 31, 2006), and (iv) up to $74,000 for Mr.
Go
(which represents 40% of his base salary at December 31, 2006). With
respect to Ms Stevens, the amount of incentive bonus that she is
eligible
to receive under her employment agreement was increased in January
2007 to
an amount equal to 40% of her annual base salary (or a bonus of up
to
$64,000 based upon 40% of her base salary at December 31, 2006).
As set
forth in note (1) to the Summary compensation Table, in January 2007
the
Named Executive Officers were awarded bonuses for 2006 in lieu of
any
contractual bonus they otherwise were entitled to receive under the
terms
of their respective employments agreements. Additional terms of these
employment contracts are discussed in the narrative following the
Summary
Compensation Table, on page 12.
|
(2) |
Pursuant
to their respective employment agreements and in consideration of
their
employment with us we granted our Named Executive officers, outside
of a
formal stock option plan, five-year non-qualified stock options to
purchase the following number of shares of our common stock: Kenneth
Ferry:-800,000; Darlene Deptula-Hicks-275,000; Jeffrey Barnes-225,000;
Stacey Stevens-150,000 and Jonathan Go-200,000. A description of
the
vesting provision of these options is set forth in footnote (1) to
the
Outstanding Equity Awards at Fiscal Year-End table on page
16.
|
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
The
following table sets forth information regarding stock options held by each
of
the Named Persons at December 31, 2006.
|
|
|
|
|
|
|
|
|
|
Name
|
|
Number
of Securities Underlying Unexercised Options (#) Exercisable
(1)
|
|
Number
of Securities Underlying Unexercised Options (#) Unexercisable
(1)
|
|
Option
Exercise Price ($)
|
|
Option
Expiration Date
|
|
Kenneth
Ferry
|
|
|
320,000
|
|
|
480,000
|
|
|
1.59
|
|
|
5/15/2011
|
|
W.
Scott Parr
|
|
|
125,000
|
|
|
-
|
|
|
0.81
|
|
|
9/1/2009
|
|
|
|
|
4,000
|
|
|
-
|
|
|
0.95
|
|
|
10/2/2011
|
|
|
|
|
1,125
|
|
|
-
|
|
|
1.00
|
|
|
9/11/2008
|
|
|
|
|
1,125
|
|
|
-
|
|
|
1.00
|
|
|
12/23/2008
|
|
|
|
|
272,931
|
|
|
-
|
|
|
1.13
|
|
|
5/12/2008
|
|
|
|
|
2,337
|
|
|
-
|
|
|
1.13
|
|
|
10/7/2009
|
|
|
|
|
25,000
|
|
|
-
|
|
|
1.75
|
|
|
1/16/2012
|
|
|
|
|
250,000
|
|
|
-
|
|
|
2.07
|
|
|
10/23/2008
|
|
Darlene
Deptula-Hicks
|
|
|
55,000
|
|
|
220,000
|
|
|
1.80
|
|
|
9/11/2011
|
|
Annette
Heroux
|
|
|
6,600
|
|
|
-
|
|
|
0.81
|
|
|
7/7/2009
|
|
|
|
|
3,000
|
|
|
-
|
|
|
0.95
|
|
|
10/2/2011
|
|
|
|
|
15,000
|
|
|
-
|
|
|
1.13
|
|
|
5/12/2008
|
|
|
|
|
8,317
|
|
|
-
|
|
|
1.13
|
|
|
10/7/2009
|
|
|
|
|
20,183
|
|
|
-
|
|
|
1.55
|
|
|
11/4/2012
|
|
|
|
|
15,000
|
|
|
-
|
|
|
1.75
|
|
|
9/21/2010
|
|
|
|
|
20,000
|
|
|
-
|
|
|
1.75
|
|
|
1/16/2012
|
|
|
|
|
35,000
|
|
|
-
|
|
|
2.07
|
|
|
10/23/2008
|
|
|
|
|
25,000
|
|
|
-
|
|
|
2.69
|
|
|
11/29/2012
|
|
-
|
|
|
|
|
|
20,000
|
|
|
1.54
|
|
|
6/26/2011
|
|
Jeffrey
Barnes
|
|
|
90,000
|
|
|
135,000
|
|
|
1.59
|
|
|
5/15/2011
|
|
Stacey
Stevens
|
|
|
60,000
|
|
|
90,000
|
|
|
1.98
|
|
|
6/1/2011
|
|
Jonathan
Go
|
|
|
40,000
|
|
|
160,000
|
|
|
2.27
|
|
|
11/3/2011
|
|
(1) |
The
foregoing options (except Ms. Heroux’s) vest in five installments at
various times between May 15, 2006 and October 23, 2009. The
first
installment vest on the grant date of the option, the second
installment
vest 6 months following the grant date and the remaining three
installments vest annually on the grant date of each option.
Vesting of
the options accelerates as to the shares to which the options
become
exercisable at the latest date (to the extent any such shares
remain
unvested at the time), upon the closing sale price of our common
stock for
a period of twenty (20) consecutive trading days exceeding
(i) 200% of the exercise price of the per share of the options;
(ii) 300% of the exercise price per share of the options or (iv) 400%
of the exercise price per share of the options.
|
SEVERANCE
AND CHANGE OF CONTROL BENEFITS
As
noted
in the Compensation Discussion and Analysis under the subheading “Employment
Contracts for our Named Executive Officers” in 2006 we entered into
substantially similar employment agreements with each of our Named Executive
Officers. These agreements provide for certain payments and other benefits
if a
Named Executive Officer’s employment with us is terminated under circumstances
specified in his or her respective agreement, including a “change in control” of
iCAD. A Named Executive Officer’s rights upon the termination of his or her
employment will depend upon the circumstances of the termination.
Under
the
employment agreements, a Change in Control would include any of the following
events:
· any
“person” as defined in Sections 13(d) and 14(d) of the Exchange Act (other than
(i) the executive, iCAD or its subsidiaries or affiliates or, (ii) any fiduciary
holding securities under an employee benefit plan of iCAD or its subsidiaries)
becomes the “beneficial owner” of 50% or more of our voting outstanding
securities;
· our
stockholders approve the sale of iCAD through a merger or a sale of our assets
or otherwise; or
· a
majority of our directors are replaced in certain circumstances during any
period of twelve (12) consecutive months (but only with respect to Mr. Ferry’s
agreement).
Termination
by Reason of Death or Disability
The
executive’s employment under the employment agreements may be terminated without
breach in the event of death or disability. In the event of the termination
of
the executive’s employment by reason of death or disability, we will pay the
executive’s base salary though the date of termination, at the rate then in
effect, and all expenses and accrued benefits arising prior to termination
which
are payable to the executive pursuant to his or her employment agreement through
the date of termination.
Termination
for Cause, without Cause, or due to a Change in Control
If
a Named Executive Officer’s employment is terminated for “cause”, we will pay
the executive his or her base salary through the date of termination at the
rate
then in effect, and all expenses and accrued benefits arising prior to such
termination which are payable to the executive pursuant to his or her employment
agreement through the date of termination.
If
a Named Executive Officer’s employment is terminated “without cause” prior to
the expiration of his or her employment agreement, we will pay to the executive
all expenses and accrued benefits arising prior to the date of termination
and
we will continue to pay the executives base salary as then in effect for the
greater of (i) the remainder of the term of the employment agreement or (ii)
a
period of one year from the date of termination. No later than 15 calendar
days
from the date that we file our Form 10-K, we are also required to pay a pro
rata
portion of the incentive bonus, if any, earned for that employment year through
the date of termination in the discretion of the Board of Directors.
Additionally, the executive will be entitled to continue to participate in
all
employee benefit plans that we provide generally to our senior
executives.
The
following table quantifies the estimated maximum amount of payments and benefits
under our employment agreements to which the Named Executive Officers would
be
entitled if they were terminated without cause on December 31, 2006, but not
in
connection with a “change in control” of iCAD.
|
|
Estimated
Net Present Value of Remaining Salary Payments
($)
|
|
Estimated
Net Present Value of Prorata Bonus ($)
|
|
Estimated
Net Present Value of Continuing Health Benefits
($)
|
|
Total
Termination Benefits ($)
|
|
Kenneth
Ferry
|
|
|
564,933
|
|
|
172,348
|
|
|
8,453
|
|
|
745,734
|
|
Darlene
Deptula-Hicks
|
|
|
386,038
|
|
|
34,470
|
|
|
26,463
|
|
|
446,970
|
|
Jeffrey
Barnes
|
|
|
348,375
|
|
|
88,636
|
|
|
26,463
|
|
|
463,475
|
|
Stacey
Stevens
|
|
|
301,298
|
|
|
68,939
|
|
|
-
|
|
|
370,237
|
|
Jonathan
Go
|
|
|
348,375
|
|
|
14,773
|
|
|
26,463
|
|
|
389,611
|
|
In
the
event a named executive officers employment is terminated within six months
(for
Mr. Ferry, Ms. Deptula-Hicks and Mr. Go) or three months (for Mr. Barnes and
Ms.
Stevens) following a change in control by us without cause (for all Named
Executive Officers) or by the executive for good reason (for Mr. Ferry, Ms,
Deptula-Hicks and Mr. Go), then we shall pay to the executive as severance
pay
and as liquidated damages an amount equal to (i) (a) his or her base salary
as
then in effect for the greater of (x) the remainder of the original term of
the
employment agreement or (y) for Mr. Ferry a period of two years from the date
of
termination and for all other executives a period of one year from the date
of
termination plus (b) an amount equal to the incentive bonus which would
otherwise been payable for the employment year in which the date of termination
occurs in monthly installments commencing 30 days following the date of
termination or (ii) a lump sum cash payment equal to the present value of the
payment otherwise due under clause (i); provided that if such severance payment,
either alone or together with other payments or benefits, either cash or
non-cash, that the Named Executive Officer has the right to receive from us,
including, but not limited to, accelerated vesting or payment of any deferred
compensation, options, stock appreciation rights or any benefits payable to
the
executive under any plan for the benefit of employees, which would constitute
an
“excess parachute payment” (as defined in Section 280G of the Internal Revenue
Code of 1986), then such severance payment or other benefit shall be reduced
to
the largest amount that will not result in receipt by the executive of a
parachute payment.
If
within six months (for Mr. Ferry, Ms. Deptula-Hicks and Mr. Go) or three months
(for Mr. Barnes and Ms. Stevens) after the occurrence of a change in control,
we
terminate the executive's employment without cause (for
all Named Executive Officers) or the executive terminates his or her employment
for good reason (for Mr. Ferry, Ms. Deptula-Hicks and Mr. Go), then
notwithstanding the vesting and exercisability schedule in any stock option
agreement between us and the executive, all unvested stock options shall
immediately vest and become exercisable and shall remain exercisable for not
less than 180 days.
The
receipt of the payments and benefits to the Named Executive Officers under
their
employment agreements are generally conditioned upon their complying with
customary non-solicitation, non-competition, confidentiality, non-interference
and non-disparagement provisions. By the terms of such agreements, the
executives acknowledge that a breach of some or all of the covenants described
in their employment will entitle us to injunctive relief restraining the
commission or continuance of any such breach, in addition to any other available
remedies.
The
following table provides the term of such covenants following the termination
of
employment as it relates to each Named Executive Officer:
Covenant
|
|
Kenneth
Ferry
|
|
Darlene
Deptula-Hicks
|
|
Jeffrey
Barnes
|
|
Stacey
Stevens
|
|
Jonathan
Go
|
|
|
|
|
|
|
|
|
|
|
|
Confidentiality
|
|
Infinite
duration for trade secrets and five years otherwise
|
|
Infinite
duration for trade secrets and five years otherwise
|
|
Infinite
duration for trade secrets and five years otherwise
|
|
Infinite
duration for trade secrets and five years otherwise
|
|
Infinite
duration for trade secrets and five years otherwise
|
|
|
|
|
|
|
|
|
|
|
|
Non-solicitation
|
|
Two
Years
|
|
Two
Years
|
|
Two
Years
|
|
Two
Years
|
|
Two
Years
|
|
|
|
|
|
|
|
|
|
|
|
Non-competition
|
|
Two
Years
|
|
Two
Years
|
|
Two
Years
|
|
Two
Years
|
|
Two
Years
|
|
|
|
|
|
|
|
|
|
|
|
Non-interference
|
|
Two
Years
|
|
Two
Years
|
|
Two
Years
|
|
Two
Years
|
|
Two
Years
|
|
|
|
|
|
|
|
|
|
|
|
Non-disparagement
|
|
Infinite
duration
|
|
Infinite
duration
|
|
Infinite
duration
|
|
Infinite
duration
|
|
Infinite
duration
|
The
following table quantifies the estimated maximum amount of payments and benefits
under our employment agreements and agreements relating to awards granted under
our equity incentive and stock option plans to which the Named Executive
Officers would be entitled upon termination of employment if we terminated
their
employment without cause within three or six months following a “change in
control” of iCAD that (by assumption) occurred on December 31,
2006.
|
|
|
|
|
|
|
|
Name
|
|
Present
Value of Salary & Bonus Payment ($)
|
|
Value
of Accelerated Vesting of Equity Awards (1)
($)
|
|
Total
Termination Benefits ($)
|
|
Kenneth
Ferry
|
|
|
729,705
|
|
|
217,082
|
|
|
946,787
|
|
Darlene
Deptula-Hicks
|
|
|
418,992
|
|
|
93,777
|
|
|
512,769
|
|
Jeffrey
Barnes
|
|
|
433,115
|
|
|
61,054
|
|
|
494,169
|
|
Stacey
Stevens
|
|
|
367,206
|
|
|
42,503
|
|
|
409,709
|
|
Jonathan
Go
|
|
|
362,499
|
|
|
65,074
|
|
|
427,573
|
|
(1) |
This
amount represents the unrealized value of the unvested portion of
the
respective Named Executive Officer’s stock options based upon a closing
price of $2.95 of our common stock on December 29, 2006 and calculated
in
accordance with Section 280G of the Internal Revenue Code and the
regulations promulgated thereunder.
|
Retirement
and Other Employee Benefits
We
provide various employee benefit programs to all employees, including medical,
dental, life insurance, short and long term disability and a 401k plan which
in
early 2007 we added an employer matching contribution. Executives are eligible
to participate in all our employee benefit programs, in each case on the same
basis as other employees. In addition, we paid a $2,140 life insurance premium
on behalf of Mr. Ferry.
Separation
Agreements with Former Officer
On
April 19, 2006 we entered into a separation agreement and release with W.
Scott Parr, our then Chief Executive Officer and President, providing for his
resignation from those positions with us effective May 15, 2006. Pursuant
to the agreement Mr. Parr received his salary through May 15, 2006 and
will receive a total separation payment equal to $480,000 less applicable taxes
and withholding, payable in 24 monthly installments. In addition, the agreement
provides Mr. Parr the ability to exercise his options to purchase common stock
through the then existing term of the options. Mr. Parr also receives benefits
under of our healthcare plans.
COMPENSATION
OF DIRECTORS
Compensation
of Directors is determined by the Board in conjunction with recommendations
made
by the Compensation Committee. The following is the 2006 compensation that
was
paid and the 2007 compensation to be paid to those members of the Board who
are
not employees of iCAD or any or any of its subsidiaries and have not been
employed by iCAD or any of its subsidiaries at any time since December 31,
2005
(the “Non-Employee Directors”).
2006
Compensation:
For
2006,
each Non-Employee Director received an annual retainer of $18,000 except for
the
Chairperson of the Board of Directors who received an annual retainer of
$35,000. In addition to the annual $18,000 retainer the Chairperson of the
Audit
Committee received an annual fee of $7,500; the Chairperson of the Compensation
Committee received an annual fee of $5,000 and the Chairperson’s of other Board
committees received an annual fee of $3,000. iCAD’s “financial expert” received
an additional annual fee of $5,000.
With
respect to Board or Board Committee meetings held after October 20, 2006 but
prior to January 1, 2007, each Non-Employee Directors received $1,000 for each
Board or Board Committee meeting attended in person, $1,000 for each Board
meeting attended telephonically and $500 for each Board Committee meeting
attended telephonically. These amounts were paid in January 2007.
In
November 2006 each Non-Employee Director was granted a five-year, immediately
exercisable non-qualified options to purchase 15,000 shares of common stock
at
an exercise price equal to the fair market value of the Common Stock on the
date
of issuance. These options are not subject to forfeiture as a result of the
director ceasing to act as a director of iCAD.
2007
Compensation:
Cash
Compensation
a)
Amounts.
For
2007, each Non-Employee Director will receive an annual retainer of $18,000
except for the Chairperson of the Board who will receive an annual retainer
of
$35,000. In addition to the $18,000 retainer, the Chairperson of the Audit
Committee will also receive an annual fee of $7,500; the Chairperson of the
Compensation Committee will also receive an annual fee of $5,000 and the
Chairperson’s of other Board committees will also receive an annual fee of
$3,000. iCAD’s designated “financial expert” will also receive an additional
annual fee of $5,000 unless the financial expert was also the Chairperson of
the
Audit Committee and received the $7,500 fee for acting as such Chairperson.
Additionally,
for each Board or Board Committee meeting attended in person, each Non-Employee
Director will receive $1,000. For each Board meeting attended telephonically,
each Non-Employee Director will receive $1,000. For each Board Committee meeting
attended telephonically, each Non-Employee Director will receive $500.
b)
Payment
Dates.
The
Non-Employee Director annual board retainer, Committee Chair retainer and the
designated financial expert retainer is paid quarterly, in arrears on the 20th
day of April, July, October and January of each year (or if such date is not
a
business day on the next following business day). The $1,000 and/or $500 fees
for attendance at Board or Board Committee meetings is also to be paid in
arrears on the 20th day of April, July, October and January of each year (or
if
such date is not a business day on the next following business day) for meetings
attended in the immediately preceding quarter (each a “payment date”).
c)
Election
to receive options in lieu of cash fees.
In
lieu
of receiving the cash payments set forth in 2(a) above, each Non-Employee
Director was entitled to choose to receive five-year non-qualified stock options
to purchase that number of shares of Common Stock that has a Black Sholes value
(as determined by us using the same methodology as it uses to calculate options
for purposes of its audited financial statements) on a given Payment Date equal
to the value of the cash fees the director would otherwise be entitled to.
Any
such election must be made by the director for an ensuing year during the “open
window” period (as determined under our Insider Trading Policy) during the
fourth quarter of the preceding year. The election must be made in writing
and
delivered to our Chief Executive Officer or Chief Financial Officer at our
principal executive offices. The date of the open window period is the thirty
calendar day period beginning three days after we release our third quarter
financial results. An election, once made, is irrevocable and covers all of
the
cash fees for the ensuing year. Any option issued under this election will
vest
immediately upon the date of issuance and will have an exercise price equal
to
the fair market value of the Common Stock on the applicable payment date
and
will not be subject to forfeiture as a result of the director ceasing to act
as
a director of iCAD.
Equity
Compensation
a.)
Initial
Awards of Options for New Directors.
Any
person who is elected or appointed as an Non-Employee Director and who has
not
served as a director of iCAD in the prior calendar year automatically receives,
on the date of election or appointment to the Board, an award of five-year
immediately exercisable non-qualified stock options to purchase 25,000 shares
of
Common Stock at an exercise price equal to the fair market value of Common
Stock
on the date of grant and
will not be subject to forfeiture as a result of the director ceasing to act
as
a director of iCAD.
b.)
Quarterly
Option Awards.
On
each
payment date, each Non-Employee Director will be granted five-year immediately
exercisable non-qualified options to purchase shares of Common Stock. The
options shall be payable in arrears for Board or Board Committee services
rendered by the Non-Employee Director in the three month period immediately
preceding the date of the award (the “Service Period”). The exercise price of
these options will be equal to the fair market value of the Common Stock on
the
applicable quarterly payment date and will not be subject to forfeiture as
a
result of the director ceasing to act as a director of iCAD. A total of 3,750
options will be granted to each director who served for the entire Service
Period. Any Non-Employee Director who served for only a portion of the Service
Period will receive proportionately fewer options.
The
following table provides information on director compensation paid by us during
2006.
DIRECTOR
COMPENSATION
|
|
|
|
|
|
|
|
|
Name
|
|
Fees
earned or paid in cash ($)
|
|
Option
Awards (1) ($)
|
|
Total
($)
|
|
Robert
Howard
|
|
|
35,000
|
|
|
15,781
|
|
|
50,781
|
|
Dr.
Rachel Brem
|
|
|
18,000
|
|
|
26,302
|
|
|
44,302
|
|
George
Farley
|
|
|
26,000
|
|
|
26,302
|
|
|
52,302
|
|
James
Harlan
|
|
|
25,500
|
|
|
26,302
|
|
|
51,802
|
|
Dr.
Lawrence Howard
|
|
|
2,250
|
|
|
26,302
|
|
|
28,552
|
|
Steven
Rappaport
|
|
|
-
|
|
|
29,638
|
|
|
29,638
|
|
Dr.
Herschel Sklaroll
|
|
|
18,000
|
|
|
15,781
|
|
|
33,781
|
|
Dr.
Elliot Sussman
|
|
|
23,000
|
|
|
15,781
|
|
|
38,781
|
|
(1) |
The
amounts included in the “Option Awards” column represent the compensation
cost recognized by us in 2006 related to stock option awards to
directors,
computed in accordance with Statement of Financial Accounting Standards
No. 123R. For a discussion of valuation assumptions, see Note 6
to our
Consolidated Financial Statements. All options granted to directors
in
2006 vested immediately.
|
The
table above does not reflect the grant to Mr. Farley on October 23, 2006 of
two-year options to purchase 45,000 shares of Common Stock with an exercise
price of $2.07 in exchange for an equal number of options with an exercise
price
of $3.35 pursuant to iCAD’s option exchange offer.
Compensation
Committee Interlocks and Insider Participation
The
Compensation Committee of the Board of Directors is responsible for, among
other
things, assisting the Board in overseeing our executive compensation strategy
and reviewing and approving the compensation of our executive officers. During
2006 there were no interlock relationships between our executive officers and
the members of our Compensation committee. As noted under Item 13-“Certain
Relationships and Related Transactions and Director Independence”, in September
2006 we entered into a Note Purchase Agreement with Mr. Harlan with respect
to
his purchase from us of a total of $300,000 principal amount of our 7.25%
Convertible Promissory Notes.
Compensation
Committee Report
The
Compensation Committee has reviewed and discussed with management the
Compensation Discussion and Analysis contained in this Annual Report on Form
10-K. Based on the review and discussion, the Compensation Committee has
recommended to our Board of Directors that the Compensation Discussion and
Analysis be included in our Annual Report on Form 10-K for the fiscal year
ended
December 31, 2006, as amended.
By
the
Compensation Committee: Elliot Sussman, M.D. (Chairperson) and Rachel Brem,
M.D
Item
12. Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
The
following table sets forth certain information regarding our Common Stock and
Series A Convertible Preferred Stock owned on April 25, 2007 by (i) each person
who is known to us to own beneficially more than 5% of the outstanding shares
of
our Common Stock (ii) each person named in the Summary Compensation Table,
(iii)
each of our directors and (iv) all current executive officers and directors
as a
group. The table also provides information regarding beneficial owners of more
than 5% of the outstanding shares of our Series A Convertible Preferred Stock.
Unless otherwise indicated below, the address of each beneficial owner is c/o
iCAD, Inc. 98 Spit Brook Road, Suite 100, Nashua, New Hampshire 03062.
BENEFICIAL
OWNERSHIP TABLE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
of Shares
|
|
|
|
|
|
Title
|
|
Name
and Address of
|
|
Beneficially
|
|
|
|
Percentage
|
|
of
Class
|
|
Beneficial
Owner
|
|
Owned
(1) (2)
|
|
|
|
of
Class
|
|
Common
|
|
|
Robert
Howard
|
|
|
5,706,037
|
|
|
(3
|
)
|
|
14.1
|
%
|
Common
|
|
|
Donald
Chapman
|
|
|
1,938,205
|
|
|
(4
|
)
|
|
5.0
|
%
|
Preferred
Series A
|
|
|
|
|
|
4,600
|
|
|
|
|
|
100.0
|
%
|
Common
|
|
|
Maha
Sallam
|
|
|
1,752,071
|
|
|
(5
|
)
|
|
4.6
|
%
|
Common
|
|
|
Dr.
Lawrence Howard
|
|
|
1,269,657
|
|
|
(6
|
)
|
|
3.3
|
%
|
Common
|
|
|
Kenneth
Ferry
|
|
|
900,000
|
|
|
(7
|
)
|
|
2.3
|
%
|
Common
|
|
|
W.
Scott Parr
|
|
|
384,127
|
|
|
(8
|
)
|
|
1.0
|
%
|
Common
|
|
|
Dr.
Rachel Brem
|
|
|
70,000
|
|
|
(9
|
)
|
|
*
|
|
Common
|
|
|
George
Farley
|
|
|
70,000
|
|
|
(10
|
)
|
|
*
|
|
Common
|
|
|
James
Harlan
|
|
|
386,471
|
|
|
(11
|
)
|
|
1.0
|
%
|
Common
|
|
|
Steven
Rappaport
|
|
|
201,471
|
|
|
(12
|
)
|
|
*
|
|
Common
|
|
|
Dr.
Elliot Sussman
|
|
|
121,824
|
|
|
(13
|
)
|
|
*
|
|
Common
|
|
|
Jeffrey
Barnes
|
|
|
209,412
|
|
|
(14
|
)
|
|
*
|
|
Common
|
|
|
Jonathan
Go
|
|
|
80,000
|
|
|
(15
|
)
|
|
*
|
|
Common
|
|
|
Darlene
Deptula-Hicks
|
|
|
165,000
|
|
|
(16
|
)
|
|
*
|
|
Common
|
|
|
Stacey
Stevens
|
|
|
149,412
|
|
|
(17
|
)
|
|
*
|
|
Common
|
|
|
Annette
Heroux
|
|
|
189,179
|
|
|
(18
|
)
|
|
*
|
|
Common
|
|
|
All
current executive officers and directors
as a group (13 persons)
|
|
|
11,081,355
|
|
|
(3),
(5), (6
|
)
|
|
25.8
|
%
|
|
|
|
|
|
(7)
& (9) through (17)
|
1)
|
A
person is deemed to be the beneficial owner of securities that
can be
acquired by such person within 60 days from April 25, 2007, upon
the
exercise of options, warrants or rights; through the conversion
of a
security; pursuant to the power to revoke a trust, discretionary
account
or similar arrangement; or pursuant to the automatic termination
of a
trust, discretionary account or similar arrangement. Each beneficial
owner’s percentage ownership is determined by assuming that the options
or
other rights to acquire beneficial ownership as described above,
that are
held by such person (but not those held by any other person)
and which are
exercisable within 60 days from April 25, 2007, have been
exercised.
|
2) |
Unless
otherwise noted, we believe that the persons referred to in the table
have
sole voting and investment power with respect to all shares reflected
as
beneficially owned by them.
|
3) |
Includes
options
to purchase 75,000 shares of Common Stock at $2.76 per share and
15,000
shares at $2.82 per share, 1,427,257 shares of the Common Stock
pursuant
to convertible notes issued to Mr. Howard pursuant to the Loan
Agreement
with us and 794,118 shares pursuant to a convertible note issued
to Mr.
Howard in September 2006 and 20,000 shares beneficially owned by
Mr.
Howard’s wife.
|
4) |
Includes
28,000 shares owned by Mr. Chapman’s wife, 460,000 shares of Common Stock
issuable upon conversion of 4,600 shares of Series A Convertible
Preferred
Stock and 340,000 shares of Common Stock issuable upon conversion
of 680
shares of Series B Convertible Preferred Stock owned by Mr.
Chapman.
|
5)
|
Includes
options to purchase 56,250 shares of Common Stock at $0.80 per share,
100,000 shares at $3.49 per share and also includes 183,625 shares
beneficially owned by Dr. Sallam’s
husband.
|
6)
|
Includes
options to purchase 25,000 shares of Common Stock at $2.82 per share,
192,157 shares of Common Stock pursuant to convertible notes issued
to Dr.
Howard in 2006 and also includes 52,500 shares beneficially owned
by Dr.
Howard’s children.
|
7)
|
Includes
options to purchase 640,000 shares of Common Stock at $1.59 per share
and
200,000 shares of Common Stock pursuant to a convertible note issued
to
Mr. Ferry in 2006.
|
8)
|
Includes
options to purchase 250,000 shares at $2.07 per share and also includes
11,000 shares beneficially owned by Mr. Parr’s
wife.
|
9)
|
Includes
options to purchase 45,000 shares of Common Stock at $3.35 per share
and
25,000 shares at $2.82 per share.
|
10)
|
Includes
options to purchase 45,000 shares of Common Stock at $2.07 per share
and
25,000 shares at $2.82 per share.
|
11)
|
Includes
options to purchase 25,000 shares of Common Stock at $1.75 per share,
75,000 shares at $1.55 per share, 25,000 shares at $2.82 per share,
and
also includes 176,471 shares of Common Stock pursuant to a convertible
note issued to Mr. Harlan in 2006.
|
12)
|
Includes
options to purchase 25,000 shares of Common Stock at $3.18 per share
and
176,471 shares of Common Stock pursuant to a convertible note issued
to
Mr. Rappaport in 2006.
|
13)
|
Includes
options to purchase 15,000 shares of Common Stock at $1.55 per share,
15,000 shares at $2.82 per share and also includes 58,824 shares
of Common
Stock pursuant to a convertible note issued to Dr. Sussman in
2006.
|
14)
|
Includes
options to purchase 180,000 shares of Common Stock at $1.59 per share
and
29,412 shares of Common Stock pursuant to a convertible note issued
to Mr.
Barnes in 2006.
|
15)
|
Includes
options to purchase 80,000 shares of Common Stock at $2.27 per
share.
|
16)
|
Includes
options to purchase 165,000 shares of Common Stock at $1.80 per
shares.
|
17)
|
Includes
options to purchase 120,000 shares of Common Stock at $1.98 per share
and
29,412 shares of Common Stock pursuant to a Convertible note issued
to Ms.
Stevens in 2006.
|
18)
|
Includes
options to purchase 6,600 shares of Common Stock at $0.81 per share,
3,000
shares at $0.95 per share, 23,317 shares at $1.13 per share, 20,183
shares
at $1.55 per share, 6,667 shares at $1.54 per share, 35,000 shares
at
$1.75 per share, 25,000 shares at $2.69 per share, and 35,000 shares
at
$3.92 per share, and also includes 29,412 shares of Common Stock
pursuant
to a convertible note issued to Ms. Heroux in
2006.
|
Equity
Compensation Plans
The
following table provides certain information with respect to all of our equity
compensation plans in effect as of December 31, 2006.
|
|
Number
of securities to be issued upon exercise of outstanding options,
warrants
and rights
|
|
Weighted-average
exercise price of outstanding options, warrants and rights
|
|
Number
of securities remaining available for issuance under equity compensation
plans (excluding securities reflected in column (a))
|
|
Plan
Category:
|
|
|
|
|
|
|
|
|
|
|
Equity
compensation plans approved by security holders:
|
|
|
3,978,730
|
|
$
|
2.22
|
|
|
317,362
|
|
Equity
compensation plans not approved by security holders (1):
|
|
|
2,653,311
|
|
$
|
3.18
|
|
|
-0-
|
|
Total
|
|
|
6,632,041
|
|
$
|
2.60
|
|
|
317,362
|
|
(1)
|
Represents
the aggregate number of shares of common stock issuable upon exercise
of
individual arrangements with warrant and non-plan option holders.
These
warrants and options are five years in duration, expire at various
dates
between November 24, 2008 and November 11, 2010, contain anti-dilution
provisions providing for adjustments of the exercise price under
certain
circumstances and have termination provisions similar to options
granted
under stockholder approved plans. See Note 6 of Notes to the Consolidated
Financial Statements for a description of our Stock Option and Stock
Incentive Plans and certain information regarding the terms of the
non-plan options.
|
Item
13. Certain
Relationships and Related Transactions, and Director
Independence.
Review,
Approval or Ratification of Transactions with related
persons
Our
Audit
Committee is responsible for reviewing and approving or ratifying
related-persons transactions. A related person is any executive officer,
director, nominee for director or more than 5% stockholder of iCAD, including
any of their immediate family members, and any entity owned or controlled by
such persons. In addition, pursuant to our Code of Business Conduct and Ethics,
all of our employees and directors who have become aware of a conflict or
potential conflict of interest, are required to notify our Chief Executive
Officer.
Certain
Transactions
On
June
13, 2006, we borrowed $2,000,000 from Mr. Robert Howard, the Chairman of the
Company’s Board of Directors, pursuant to the Loan Agreement (“Loan Agreement”).
At December 31, 2006, $2,258,906 was owed by us to Mr. Howard pursuant to the
Loan Agreement with $2,741,094 available for future borrowings under the Loan
Agreement. Notwithstanding the current expiration date of Loan Agreement, Mr.
Howard has agreed not to request repayment of the principal amount due to him
under the Loan Agreement prior to March 31, 2008. Mr. Howard has also agreed
that while the Loan Agreement exists not to convert any outstanding advances
under the Loan Agreement into shares of our common stock that would exceed
the
available shares for issuance defined as the authorized shares of iCAD’s common
stock less issued and outstanding common shares less any reserved shares for
outstanding convertible preferred stock, non-employee warrants and non-employee
stock options.
On
June
19, 2006, Dr. Lawrence Howard, who is currently a Director of iCAD, entered
into
a Note Purchase Agreement with respect to the purchase from us by Dr. Howard
of
an aggregate of $200,000 principal amount of a 7% Convertible Note due June
19,
2008 (the “Howard Note”) at a purchase price of $200,000. Interest on the Howard
Note is payable on the due date. Principal and accrued and unpaid interest
under
the Howard Note can be converted by the holder into shares of the Company’s
common stock at $1.50 per share. Payment of principal under the Howard Note
can
be accelerated by the holder if we file for, or are found by a court to be,
bankrupt or insolvent and we can prepay the Howard Note prior to the due date.
Dr. Howard has also agreed that he will not convert any principal amount or
accrued and unpaid interest outstanding under the Howard Note into shares of
iCAD common stock that would exceed the number of shares of common stock then
available for issuance defined as the authorized shares of common stock less
issued and outstanding common shares less any reserved shares for outstanding
convertible preferred stock, non-employee warrants and non-employee stock
options.
On
June
20, 2006, Mr. Kenneth Ferry, our Chief Executive Officer, entered into a Note
Purchase Agreement with respect to the purchase from us by Mr. Ferry of an
aggregate of $300,000 principal amount of a 7% Convertible Note due June 20,
2008 (the “Ferry Note”) at a purchase price of $300,000. Interest on the Ferry
Note is payable on the due date. Principal and accrued and unpaid interest
under
the Ferry Note can be converted by the holder into shares of iCAD common stock
at $1.50 per share. Payment of principal under the Ferry Note can be accelerated
by the holder if we file for, or are found by a court to be, bankrupt or
insolvent and we can prepay the Ferry Note prior to the due date. Mr. Ferry
has
also agreed that he will not convert any principal amount or accrued and unpaid
interest outstanding under the Ferry Note into shares of common stock that
would
exceed the number of shares of common stock then available for issuance defined
as the authorized shares of common stock less issued and outstanding common
shares less any reserved shares for outstanding convertible preferred stock,
non-employee warrants and non-employee stock options.
On
September 12, 14, and 19, 2006 we entered into Note Purchase Agreements with
respect to the purchase of a total of $3,000,000 principal amount of 7.25%
Convertible Promissory Notes (“Notes”) by a total of ten accredited investors
including the following: Mr. Robert Howard (as to $1,350,000), Mr. James Harlan
(as to $300,000), Mr. Steven Rappaport (as to $300,000) Dr. Elliott Sussman
(as
to $100,000) and Dr. Lawrence Howard (as to $100,000), all of whom are currently
directors of iCAD, a total of $700,000 from two non-affiliated investors, and
$50,000 by each of the following of our employees and/or executive officers;
Mr.
Jeffrey Barnes, Ms. Stacey Stevens and Ms. Annette Heroux. The Notes are due
two
years from the date of issue. Interest on the Notes is payable on the due date.
Principal and accrued and unpaid interest under the Notes can be converted
by
each holder into shares of common stock at $1.70 per share. Payment of principal
under the Notes can be accelerated by the holder if we file for, or are found
by
a court to be, bankrupt or insolvent and we can prepay the Notes prior to the
due date. The Notes issued on September 19, 2006 in the aggregate principal
amount of $1,000,000 were issued with a conversion price below the market price
of $1.80 per share and we recorded on our financial statements a discount to
Notes Payable of $58,824 to reflect the beneficial conversion feature.
On
April 19, 2006 we entered into a separation agreement and release with W.
Scott Parr, our Chief Executive Officer and President, providing for his
resignation from those positions effective May 15, 2006. Pursuant to the
agreement Mr. Parr will receive his current salary through May 15,
2006 and a separation payment equal to $480,000 less applicable taxes and
withholding, payable in 24 monthly installments. Mr. Parr also receives benefits
under our healthcare plans.
Independence
of the Board of Directors
Our
Board
of Directors has three standing committees: an Audit Committee, a Compensation
Committee and a Nominating and Corporate Governance Committee. The Board of
Directors has determined that each current member of each committee meets the
applicable rules and regulations regarding independence for such committee,
including those set forth in pertinent Nasdaq Marketplace Rules.
Consistent
with these considerations, the Board has determined that Messrs. Harlan, Farley
and Rappaport and Drs. Brem and Sussman, meet the director independence
requirements under the applicable Marketplace Rule of The Nasdaq Stock Market
LLC. In reaching this conclusion the Board reviewed the definition of
independence under the applicable Nasdaq Marketplace Rule and the answers to
annual questionnaires completed by each of the independent directors and also
considered the investments in convertible notes of the Company made by certain
of the independent directors during 2006 Furthermore, Mr. .Scott Parr and Mr.
Herschel Sklarof, both served on our of Board of Directors during a portion
of
2006. During the time of his service on the board Mr. Parr was not deemed to
be
an independent director but Mr. Sklaroff was deemed to be an independent
director under this standard.
Item
14. Principal
Accounting Fees and Services
The
following is a summary of the fees billed to the Company by its independent
registered public accountants, BDO Seidman, LLP for professional services
rendered for the years ended December 31, 2006 and 2005:
Audit
Fees.
The aggregate fees billed by BDO Seidman, LLP for professional services rendered
for the audit of the Company's annual financial statements for the years ended
December 31, 2006 and 2005, the review of the financial statements included
in
the Company's Forms 10-Q and consents issued in connection with the Company’s
filings on Form S-3 and S-8 for 2006 and 2005 totaled $322,000 and $366,077,
respectively.
Audit-Related
Fees.
The
aggregate fees billed by BDO Seidman, LLP for assurance and related services
that are reasonably related to the performance of the audit or review of the
Company's financial statements, for the years ended December 31, 2006 and 2005,
and
are
not disclosed in the paragraph captions “Audit Fees” above, were $30,400 and
$10,335, respectively.
No
tax fees or other fees were paid to BDO Seidman, LLP for the years ended
December 31, 2006 and 2005.
Pre-Approval
Policies and Procedures
The
Audit Committee has established its pre-approval policies and procedures,
pursuant to which the Audit Committee approved the foregoing audit services
provided by BDO Seidman, LLP in 2006. Consistent with the Audit
Committee's responsibility for engaging the Company’s independent auditors, all
audit and permitted non-audit services require pre-approval by the Audit
Committee. The full Audit Committee pre-approves proposed services and fee
estimates for these services. The Audit Committee chairperson or their
designee has been designated by the Audit Committee to pre-approve any services
arising during the year that were not pre-approved by the Audit Committee.
Services pre-approved by the Audit Committee chairperson are communicated to
the
full Audit Committee at its next regular meeting and the Audit Committee reviews
services and fees for the fiscal year at each such meeting. Pursuant to
these procedures, the Audit Committee pre-approved the foregoing audit services
provided by BDO Seidman, LLP.
PART
IV
Item
15. Exhibits,
Financial Statements, Schedules.
a)
(1)-(2) The financial statements or required financial statement schedules
are
included in the Original Filing.
(3) Exhibits
- the following documents are filed as exhibits to this Annual Report on Form
10-K:
|
2(a)
|
Plan
and Agreement of Merger dated February 15, 2002, by and among the
Registrant, ISSI Acquisition Corp. and Intelligent Systems Software,
Inc.,
Maha Sallam, Kevin Woods and W. Kip Speyer. [incorporated by reference
to
Annex A of the Company’s proxy statement/prospectus dated May 24, 2002
contained in the Registrant’s Registration Statement on Form S-4, File No.
333-86454]
|
|
2(b)
|
Amended
and Restated Plan and Agreement of Merger dated as of December 15,
2003
among the Registrant, Qualia Computing, Inc., Qualia Acquisition
Corp.,
Steven K. Rogers, Thomas E. Shoup and James Corbett.[Incorporated
by
reference to Exhibit 2(a) to the Registrant's Current Report on Form
8-K
for the event dated December 31,
2003]
|
|
3(a)
|
Certificate
of Incorporation of the Registrant filed with the Secretary of State
of
the State of Delaware on February 24, 1984 [incorporated by reference
to
Exhibit 3.1 to the Registrant's Registration Statement on Form S-18
(Commission File No. 2-94097 NY), filed on October 31,
1984]
|
|
3(b)
|
Certificate
of Amendment of Certificate of Incorporation of the Registrant, filed
with
the Secretary of State of the State of Delaware on May 31, 1984
[incorporated by reference to Exhibit 3.1(a) to the Registrant's
Registration Statement on Form S-18 (Commission File No. 2-94097-NY),
filed on October 31, 1984]
|
|
3(c)
|
Certificate
of Amendment of Certificate of Incorporation of the Registrant filed
with
the Secretary of State of the State of Delaware on August 22, 1984
[incorporated by reference to Exhibit 3.1(b) to the Registrant's
Registration Statement on Form S-18 (Commission File No. 2-94097-NY),
filed on October 31, 1984].
|
|
3(d)
|
Certificate
of Amendment of Certificate of Incorporation of the Registrant filed
with
the Secretary of State of the State of Delaware on October 22, 1987
[incorporated by reference to Exhibit 3(d) to the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1988].
|
|
3(e)
|
Certificate
of Amendment of Certificate of Incorporation of the Registrant filed
with
the Secretary of State of the State of Delaware on September 28,
1999
[incorporated by reference to Exhibit 3(d) to the Registrant’s Annual
Report on Form 10-K for the year ended December 31,
2001].
|
|
3(f)
|
Certificate
of Amendment of Certificate of Incorporation of the Registrant filed
with
the Secretary of State of the State of Delaware on June 28, 2002
[incorporated by reference to Exhibit 3.1 of the Registrant’s Quarterly
report on Form 10-Q for the quarter ended June 30,
2002].
|
|
3(g)
|
Amended
By-laws of Registrant [incorporated by reference to Exhibit 3 to
the
Registrant's Quarterly report on Form 10Q for the quarter ended March
31,
2006].
|
|
10(a)
|
Revolving
Loan and Security Agreement, and Convertible Revolving Credit Promissory
Note between Robert Howard and Registrant dated October 26, 1987
(the
"Loan Agreement") [incorporated by reference to Exhibit 10 to the
Registrant's Report on Form 10-Q for the quarter ended September
30,
1987].
|
|
10(b)
|
Letter
Agreement dated June 28, 2002, amending the Revolving Loan and Security
Agreement, and Convertible Revolving Credit Promissory Note between
Robert
Howard and Registrant dated October 26, 1987 [incorporated by reference
to
Exhibit 10(b) to the Registrant's Report on Form 10-K for the year
ended
December 31, 2002].
|
|
10(c) |
Form
of Secured Demand Notes between the Registrant and Mr. Robert Howard.
[incorporated by reference to Exhibit 10(e) to the Registrant's Report
on
Form 10-K for the year ended December 31, 1998].
|
|
10(d)
|
Form
of Security Agreements between the Registrant and Mr. Robert Howard
[incorporated by reference to Exhibit 10(f) to the Registrant’s Report on
Form 10-K for the year ended December 31, 1998].
|
|
10(e)
|
Certificate
of Designation of 7% Series A Convertible Preferred Stock dated December
22, 1999. [incorporated by reference to Exhibit 10(i) to the Registrant’s
Report on Form 10-K for the year ended December 31, 1999].
|
|
10(f)
|
Certificate
of Designation of 7% Series B Convertible Preferred Stock dated October
16, 2000 [incorporated by reference to Exhibit 10(j) to the Registrant’s
Report on Form 10-K for the year ended December 31, 2000].
|
|
10(g)
|
Separation
agreement dated September 24, 2002 between the Registrant and W.
Kip
Speyer [incorporated by reference to Exhibit 10.1 to the Registrant’s
quarterly report on Form 10-Q for the quarter ended September 30,
2002].*
|
|
10(h)
|
1993
Stock Option Plan [incorporated by reference to Exhibit A to the
Registrant’s proxy statement on Schedule 14-A filed with the Securities
and Exchange Commission on August 24,
1999].*
|
|
10(i)
|
2001
Stock Option Plan [incorporated by reference to Annex A of the
Registrant’s proxy statement on Schedule 14-A filed with the Securities
and Exchange Commission on June 29,
2001].*
|
|
10(j)
|
2002
Stock Option Plan [incorporated by reference to Annex F to the
Registrant’s Registration Statement on Form S-4 (File No.
333-86454)].*
|
|
10(k)
|
Addendum
No. 16, extending the Revolving Loan and Security Agreement, and
Convertible Revolving Credit Promissory Note between Robert Howard
and
Registrant dated October 26, 1987.
|
|
10(l)
|
License
Agreement between Scanis, Inc. and the Registrant dated February
18, 2003
[incorporated by reference to Exhibit 10(m) to the Registrant’s Report on
Form 10-K for the year ended December 31,
2002].**
|
|
10(m) |
2004
Stock Incentive Plan [incorporated by reference to Exhibit B to
the
Registrant’s definitive proxy statement on Schedule 14A filed with the SEC
on May 28, 2004].*
|
|
10(n)
|
Form
of Option Agreement under the Registrant’s 2001 Stock Option Plan
[incorporated by reference to Exhibit 10.1 to the Registrant’s quarterly
report on Form 10-Q for the quarter ended September 30,
2004].*
|
|
10(o)
|
Form
of Option Agreement under the Registrant’s 2002 Stock Option Plan
[incorporated by reference to Exhibit 10.2 to the Registrant’s quarterly
report on Form 10-Q for the quarter ended September 30,
2004].*
|
|
10(p)
|
Form
of Option Agreement under the Registrant’s 2004 Stock Incentive Plan
[incorporated by reference to Exhibit 10.3 to the Registrant’s quarterly
report on Form 10-Q for the quarter ended September 30,
2004].*
|
|
10(q) |
Form
of warrant issued to investors in connection with the Registrant’s
December 15, 2004 private financing. [incorporated by reference to
Exhibit
10(q) to the Registrant’s Report on Form 10-K for the year ended December
31, 2004].
|
|
10(r)
|
Separation
agreement dated February 16, 2005 between the Registrant and Steven
Rogers
[incorporated by reference to Exhibit 10.1 to the Registrant’s report on
Form 8-K filed with the SEC on February 23,
2005].*
|
|
10(s)
|
2005
Stock Incentive Plan [incorporated by reference to Exhibit 10.1 to
the
Registrant’s report on Form 8-K filed with the SEC on June 28,
2005].*
|
|
10(t)
|
Form
of Option Agreement under the Registrant’s 2005 Stock Incentive Plan
[incorporated by reference to Exhibit 10.2 to the Registrant’s report on
Form 8-K filed with the SEC on June 28,
2005].*
|
|
10(u)
|
Lease
Agreement dated October 31, 2002 between the Registrant and 4 Townsend
West, LLC of Nashua, NH [incorporated by reference to Exhibit 10(u)
to the
Registrant’s Report on Form 10-K for the year ended December 31,
2005].
|
|
10(v)
|
Lease
Agreement dated October 9, 2000 between the Registrant and Mills-Morgan
Development, LTD, of Beavercreek, OH [incorporated by reference to
Exhibit
10(v) to the Registrant’s Report on Form 10-K for the year ended December
31, 2005].
|
|
10(w)
|
Lease
Agreement dated October 9, 2000 between the Registrant and Mills-Morgan
Development, LTD, of Beavercreek, OH [incorporated by reference to
Exhibit
10(w) to the Registrant’s Report on Form 10-K for the year ended December
31, 2005].
|
|
10(x)
|
Addendum
No. 18 to the Revolving Loan and Security Agreement, and Convertible
Revolving Credit Promissory Note between Robert Howard and the registrant
dated October 26, 1987 [incorporated by reference to Exhibit 10.1
of
Registrant’s Quarterly report on Form 10-Q for the quarter ended March 31,
2006].
|
|
10(y)
|
Employment
Agreement dated April 19, 2006 between the Registrant and Kenneth
Ferry
[incorporated by reference to Exhibit 10.1 of Registrant’s Quarterly
report on Form 10-Q for the quarter ended June 30,
2006].*
|
|
10(z)
|
Employment
Agreement dated April 19, 2006 between the Registrant and Jeffrey
Barnes
[incorporated by reference to Exhibit 10.1 of Registrant’s Quarterly
report on Form 10-Q for the quarter ended June 30,
2006].*
|
|
10(aa)
|
Employment
Agreement dated April 28, 2006 between the Registrant and Stacey
Stevens
[incorporated by reference to Exhibit 10.1 of Registrant’s Quarterly
report on Form 10-Q for the quarter ended June 30,
2006].*
|
|
10(bb)
|
Separation
agreement dated April 19, 2006 between the Registrant and W. Scott
Parr
[incorporated by reference to Exhibit 10.1 of Registrant’s Quarterly
report on Form 10-Q for the quarter ended June 30,
2006].
|
|
10(cc)
|
Note
Purchase Agreement between Ken Ferry, the Registrant’s Chief Executive
Officer, and the Registrant dated June 19, 2006 [incorporated by
reference
to Exhibit 10.1 of Registrant’s Quarterly report on Form 10-Q for the
quarter ended June 30, 2006].
|
|
10(dd)
|
Form
of Indemnification Agreement with each of the Registrant’s directors and
officers [incorporated by reference to Exhibit 10.1 of Registrant’s
Quarterly report on Form 10-Q for the quarter ended June 30,
2006].
|
|
10(ee)
|
Employment
Agreement September 8, 2006 between the Registrant and Darlene M.
Deptula-Hicks [incorporated by reference to Exhibit 10.1 of Registrant’s
report on Form 8-K filed with the SEC on September 13,
2006].*
|
|
10(ff)
|
Lease
Agreement dated November 22, 2006 between the Registrant and Gregory
D.
Stoyle and John J. Flatley, Trustees of the 1993 Flatley Family Trust,
of
Nashua, NH.
|
|
10(gg)
|
Lease
Agreement dated March 8, 2007 between the Registrant and 4 Townsend
West,
LLC of Nashua, NH.
|
|
10(hh) |
Form
on Note Purchase Agreement between certain investors and the Registrant
dated September 19, 2006 [incorporated by reference to Exhibit 10.4
of the
Registrant’s Quarterly report on Form 10-Q for the quarter ended September
30, 2006].*
|
|
10(ii) |
Option
Agreement dated April 19, 2006 between the Registrant and Kenneth
Ferry
[incorporated by reference to Exhibit 10.5 of the Registrant’s Quarterly
report on Form 10-Q for the quarter ended September 30,
2006].*
|
|
10(jj) |
Option
Agreement dated April 19, 2006 between the Registrant and Jeffrey
Barnes
[incorporated by reference to Exhibit 10.6 of the Registrant’s Quarterly
report on Form 10-Q for the quarter ended September 30,
2006].*
|
|
10(kk) |
Option
Agreement dated April 19, 2006 between the Registrant and Stacey
Stevens
[incorporated by reference to Exhibit 10.7 of the Registrant’s Quarterly
report on Form 10-Q for the quarter ended September 30,
2006].*
|
|
10(ll) |
Addendum
No. 19 dated March 1, 2007, extending the Revolving Loan and Security
Agreement, and Convertible Revolving Credit Promissory Note between
Robert
Howard and the Registrant dated October 26, 1987 [incorporated by
reference to Exhibit 10.1 of the Registrant’s report on Form 8-K filed
with the SEC on March 7, 2007].
|
|
10(mm) |
Lease
Agreement dated November 22, 2006 between the Registrant and Gregory
D.
Stoyle and John J. Flatley, Trustees of the 1993 Flatley Family Trust,
of
Nashua, NH. (1)
|
|
10(nn) |
Employment
Agreement dated October 20, 2006 between the Registrant and Jonathan
Go.*
(1)
|
|
10(oo) |
Option
Agreement dated September 8, 2006 between the Registrant and Jonathan
Go.*
(1)
|
|
23 |
Consent
of BDO Seidman, LLP. (1)
|
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002. (2)
|
|
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002. (2)
|
|
32.1
|
Certification
of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002. (1)
|
|
32.2
|
Certification
of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002. (1)
|
*
Denotes
a management compensation plan or arrangement.
**
Portions of these documents were omitted and filed separately with the
Securities and Exchange Commission pursuant to a request for confidential
treatment of the omitted portions.
|
(1)
|
Filed
with the Original Filing.
|
|
(b) |
Exhibits - See (a) iii
above. |
|
(c) |
Financial Statement Schedule - See (a) ii
above. |
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by
the undersigned, thereunto duly authorized.
|
|
|
|
iCAD,
INC. |
Date:
April 30, 2007 |
|
|
|
By: |
/s/
Kenneth Ferry |
|
Kenneth
Ferry |
|
President,
Chief
Executive Officer, Director |
|
|
|
|
By: |
/s/
Darlene M. Deptula-Hicks |
|
Darlene
M. Deptula-Hicks |
|
Executive
Vice
President of Finance, Chief
Financial Officer |