Exhibit 10.11
VIRTUAL RADIOLOGIC CORPORATION
EQUITY INCENTIVE PLAN
NON-INCENTIVE STOCK OPTION AGREEMENT
     THIS AGREEMENT (“Agreement”), made and entered into effective this
                    , by and between VIRTUAL RADIOLOGIC CORPORATION, a Delaware
corporation (hereinafter referred to as the “Corporation”) and
                     (“Director”) a Director of the Corporation.
     WHEREAS, Corporation desires to provide the Director with an additional
inducement to advance the interests of the Corporation and the Corporation, by
possessing an option to purchase common shares of the Corporation in accordance
with the Virtual Radiologic Corporation Equity Incentive Plan (the “Plan”).
     WHEREAS, Director is a Contractor, as defined in the Plan.
     NOW THEREFORE, on the basis of the premises and of the mutual
considerations provided herein, the parties agree as follows:

1.   Definitions. Words and phrases not otherwise defined herein shall have the
meanings ascribed to them, respectively, in the Plan.   2.   Grant of Option.
The Corporation grants to Director an Option (the “Option”) to purchase all or
any part of an aggregate of                      shares of the Corporation’s
common stock, par value $0.001 per share (the “Shares”) at the exercise price of
$          per share, in the manner and subject to the conditions provided
herein and in the Plan. The Option hereby granted shall be treated as a
non-incentive stock option within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”) and as provided in the Plan.   3.
  Time of Vesting and Exercise of Option.

  a.   This Option shall vest for, and Director may first exercise the Option
with respect to [INSERT VESTING TERMS].     b.   In the event of Director’s
death or termination of engagement by the Corporation due to Disability, the
Option shall vest and become exercisable as to the greater of: (i) the number of
Shares for which the Option was otherwise, in accordance with this Option
Agreement, vested and exercisable (or previously exercised) on the date of death
or Disability, or (ii) that percentage of the total number of Shares subject to
the Option (including any Shares for which the Option may have been previously
exercised) which is determined by dividing the Director’s number of complete
months of engagement by the Corporation, by the total number of months of
engagement which would otherwise be required for the Option to fully vest under
the terms of the Option agreement (to a maximum of 100%)

 

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  c.   Notwithstanding any provision of this Agreement to the contrary, in no
case may the Option be exercised to any extent by anyone after
                    .

4.   Method of Exercise. The Option may be exercised in whole or in part from
time to time by (i) written notice to the Corporation of intent to exercise the
Option with respect to a specified number of Shares; (ii) tendering to the
Corporation this original Option agreement (or a replacement Option agreement
satisfactory to the Board of Directors or the Compensation Committee thereof
(the “Committee”)); and (iii) payment to the Corporation of the exercise price
for the number of Shares with respect to which the Option is then exercised.
Except as set forth in the next sentence, payment of the exercise price may be
made in any of the following manners:

  (1)   cash, including certified check, bank draft or postal or express money
order;     (2)   personal check (provided that if payment of the exercise price
is made by personal check and such personal check is not timely paid by the
drawer’s bank, such payment shall be deemed not to have been made and any Shares
issued upon such exercise shall be deemed void and never issued);     (3)   by
surrender for cancellation of Shares of Stock which:

  (a)   were acquired by the Director (or person exercising the Option) other
than by exercise of an Option;     (b)   were acquired by the Director (or
person exercising the Option) upon exercise of an Option where the Option Shares
being surrendered have been held by the Director (or person exercising the
Option) for at least six months after such exercise; or     (c)   were acquired
by the Director (or person exercising the Option) upon exercise of an Option
where the Option Shares being surrendered have been held by the Director (or
person exercising the Option) for six months or less after such exercise but
only if the Director (or person exercising the Option) has obtained prior
approval of the specific surrender (such approval to specify at least the date
of grant of the Option being exercised, the dates of grant and exercise of the
Option pursuant to which Shares to be surrendered were acquired, and the number
of Option Shares to be surrendered) by the Committee; and which have a Fair
Market Value equal to the exercise price of the Options being exercised (if the
Shares surrendered have a Fair Market Value in excess of the exercise price of
the Options being exercised, the Corporation shall promptly pay to the Director
or person exercising the Option an amount equal to the excess of such Fair
Market Value over the exercise price, not to exceed the Fair Market Value of one
Share); or

  (4)   by delivery of a notice of “net exercise” to the Corporation, pursuant
to which Director shall receive the number of Shares underlying the Options so
exercised reduced

2.

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      by the number of Shares equal to the aggregate exercise price of the
Options divided by the Fair Market Value on the date of exercise; or

  (5)   by any other method of payment which the Committee shall approve before,
at, or after the date of grant of such Options.

     An Option shall be deemed to have been exercised immediately prior to the
close of business on the date the Corporation is in receipt of the original
Option agreement, written notice of intent to exercise the Option, and payment
for the number of Shares being acquired upon exercise of the Option. Director
shall be treated for all purposes as the holder of record of the Option Stock as
of the close of business on such date, except where Shares are held for unpaid
withholding taxes. As promptly as practicable on or after such date, the
Corporation shall issue and deliver to Director a certificate or certificates
for the Option Stock issuable upon such exercise; provided, however, that such
delivery shall be deemed effected for all purposes when the Corporation, or the
stock transfer agent for the Corporation, shall have deposited such certificates
in the United States mail, postage prepaid, addressed to the Director at the
address specified in the written notice of exercise.
     Notwithstanding the foregoing listing of permissible manners of payment of
exercise price, the Committee shall have the right from time to time to cancel,
limit or suspend as to any one, some, or all Option(s) and as to any one, some,
or all Directors, the right to make payment under any one or more manners of
payment (other than the payment by cash, certified check, bank draft or postal
or express money order), including other methods of payment previously approved
by the Committee. There shall be no exercise at any one time for fewer than one
hundred (100) Shares (or such lesser number of Shares as the Committee may from
time to time determine in its discretion) or all of the remaining Shares then
purchasable by Director or person exercising the Option.

5.   Termination of Option. Except as herein otherwise provided, the Option
granted under this Agreement, to the extent not heretofore exercised, shall
terminate upon the first to occur of the following events:

  a.   The date on which Director ceases to be a contractor to the Corporation
by reason of a voluntary termination by election of the Director, or by reason
of an involuntary termination for Cause by election of the Corporation;     b.  
The expiration of twelve months after the date on which the Director ceases to
be a contractor to the Corporation by reason of death;     c.   The expiration
of three months after the date on which the Director ceases to be a Contractor
to the Corporation by reason of Disability; or     d.   The expiration of three
months after the date on which Director ceases to be a Contractor to the
Corporation by reason of an involuntary termination by election of the
Corporation without Cause.     e.   Midnight on                     .

3.

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6.   Reclassification, Consolidation or Merger.

  a.   If and to the extent that the number of issued common shares of
Corporation shall be increased or reduced by change in par value, split up,
reverse split, reclassification, distribution of a dividend payable in stock, or
the like, the number of common shares subject to the Option and the option price
per share shall be proportionately adjusted in accordance with the Plan.     b.
  If Corporation is reorganized or consolidated or merged with another
Corporation, Director shall be entitled to receive an option (the “New Option”)
covering common shares of such reorganized, consolidated or merged Corporation
in the same proportion, at an equivalent price, and subject to the same
conditions as the Option. For purposes of the preceding sentence, the excess of
the fair market value of the common shares subject to the Option immediately
after the reorganization, consolidation or merger over the aggregate option
price of such common shares shall not be more than the excess of the aggregate
fair market value of all common shares subject to the Option immediately before
such reorganization, consolidation or merger over the aggregate option price of
such common shares, and the New Option or assumption of the Option shall not
give Director additional benefits which he does not have under this Option, or
deprive him of benefits which he has under this Option. In the event of such
reorganization, consolidation or merger, the Committee may also elect to cash
out any awards as described in the Plan.

7.   Rights Prior to Exercise of Option. This Option is non-transferable by
Director, except in the event of his or her death, and during his or her
lifetime is exercisable only by Director; provided, however, that this Option
may be transferred by Director for estate planning purposes subject to prior or
other written approval by the Corporation, in its sole discretion or pursuant to
any policy and requirements concerning such transfers as may then be in effect.
In the event of death, this Option may be exercised by Director’s personal
representative or the party inheriting the Option. No person shall have any
rights as a stockholder with respect to any common shares purchasable hereunder
until payment of the option price and delivery to him of such common shares as
herein provided.   8.   Restriction on Disposition.

  a.   All common shares acquired by Director pursuant to this Agreement shall
be subject to the restrictions on sale, encumbrance and other disposition
contained in the Corporation’s Bylaws, or imposed by applicable laws or
regulations of the State of Delaware or the United States of America regarding
the registration or qualification of such acquisition of common shares. The
Corporation may require a prior opinion of its counsel, which the Corporation
shall use its best efforts to obtain, that the transfer or other disposition of
common shares acquired pursuant to this Agreement will not violate the
Securities Act of 1933 or any applicable state law regulating the sale of
securities.     b.   All common shares acquired pursuant to this Agreement shall
be subject to reacquisition by the Corporation upon the terms and conditions set
forth in the Plan.

4.

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9.   Merger and Supersession. This Agreement merges and supersedes all prior
negotiations or agreements between the Corporation and the Director with respect
to the subject matter hereof, and sets forth in their entirety all rights
Director has or may claim for any reason to receive options, shares or other
equity rights in the Corporation hereunder.   10.   Binding Effect; Plan
Governs; Survival.   10.1   This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective heirs, executors,
administrators, successors and assigns.   10.2   This Agreement shall be
construed in accordance with and shall be governed by the terms of the Plan as
adopted and approved by the Corporation within the meaning of Section 422 of the
Code, as the Plan may be amended from time to time by the Corporation. Director
acknowledges receipt of a copy of the Plan prior to the execution hereof and
agrees to be bound by the terms of the Plan. If possible, this Agreement shall
be construed along with and in addition to any other agreement which the
Corporation and Director may enter into, but any provision in this Agreement
which contradicts any provision of any other agreement shall take precedence and
be binding over such other provision. In order to provide the Corporation with
the opportunity to claim the benefit of any income tax deduction which may be
available to it upon the exercise of the Option and in order to comply with all
applicable federal or state income tax laws or regulations, the Corporation may
take such action as it deems appropriate to insure that, if necessary, all
applicable federal or state withholding, income or other taxes are withheld or
collected from Director.   10.3   The provisions of this Agreement, the Plan or
other documents incorporated therein, shall be governed by, interpreted and
enforced in accordance with the laws of the State of Delaware, unless and to the
extent they are pre-empted by the laws of the United States of America.   10.4  
Sections 8, 9 and 10 of this Agreement shall survive the exercise or termination
of the Option, the delivery of any Option shares, or termination of this
Agreement.

5.

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This Agreement shall be effective as of the date first written above.

                      DIRECTOR   CORPORATION
 
                    [NAME]   VIRTUAL RADIOLOGIC CORPORATION
 
                   
 
      By:                              
 
                   
Dated:
      Dated:            
 
 
 
     
 
       

6.